If you aren’t familiar with the term “big-box retailer”, it refers to a retail store that occupies a large amount of physical space and offers a variety of different products to its customers. These companies can make for great long-term investments thanks to their reliable sales, financial stability, and growth prospects in areas like emerging markets and e-commerce.
Lots of the big-box retail companies benefitted last year thanks to the pandemic-induced panic buying and because they were deemed “essential businesses”. While many of their stock prices got a short-term boost, there's still plenty of things to like about investing in major retailers as the world reopens. Let’s take a look at 3 big-box retail stocks to buy now. Lowe’s Companies Inc (NYSE:LOW)
The first big-box retailer that belongs in your portfolio is Lowe’s, the world’s second-largest home improvement retailer. We are currently witnessing a massive secular shift in consumer spending towards home improvement, and Lowe’s is a company that is directly benefitting. With a red hot housing market, homeowners spending a ton of time at home thanks to remote work and the pandemic, and more people tackling “Do-It-Yourself” projects, there’s plenty of things that are working in the company's favor for the short term and beyond. Lowe’s
stock has rallied over 21% year-to-date and has been a true market leader in the consumer discretionary sector. Customers can find products for maintenance, repair, remodeling, and decorating in the company’s 1,974 stores across the United States and Canada. U.S. comparable sales increased by 28.6% in Q4 while adjusted diluted EPS increased by 41.5% year-over-year to $1.33. With about 70% of homes in the U.S. over 25 years old, it’s safe to say that Lowe’s will be helping tons of homeowners with remodeling and repairs over the next few years. WalMart Inc (NYSE:WMT) Walmart
is the type of big-box retail stock you can add to your portfolio and hold onto it until retirement. As the largest retailer in the world, this company operates a chain of over 11,000 discount department stores, wholesale clubs, supermarkets, and supercenters all over the world. Perhaps one of the most impressive things to note about this company’s reach is that its stores are located within 10 miles of 90% of the U.S. population. It’s also a dividend aristocrat stock that has increased its dividend payment for 43 consecutive years, another truly impressive feat.
This stock is a buy at the moment for several reasons. First, the stock recently reclaimed its 200-day moving average, which can be a great entry point for long-term investors as it typically signifies that a stock is in an uptrend. The company is also seeing huge growth in its domestic e-commerce sales, which increased by 79% year-over-year in 2020. The launch of Walmart+, which is a subscription service that includes unlimited, same-day delivery on over 160,000 grocery and merchandise items, is another promising growth driver. Finally, the company announced that Indian e-commerce giant Flipkart, which is controlled by Walmart, will likely be going public later this year. TJX Companies Inc (NYSE:TJX)
Last on our list of big-box retail stocks to buy now is TJX Companies, which is a leading global off-price retailer of apparel and home fashions. The company operates in a highly competitive apparel retail industry but stands out thanks to the fact that it offers brand name products at 20% to 60% lower than full-price retailers’ prices. The company can offer lower prices by acquiring merchandise later in the purchase cycle than other stores and also take advantage of manufacturer overruns and canceled orders. With many full-price apparel stores struggling lately thanks to the rise of e-commerce, TJX Companies is well-positioned to thrive in a post-pandemic retail world.
The company operates in four main segments, Marmaxx, U.S. Homegoods, TJX Canada, and TJX International. TJX Companies is likely going to benefit from its leverage with its suppliers and from consumers actively seeking lower-priced goods and a “treasure hunt” shopping experience over the long term. The company boosted its dividend up 13% back in November, marking the 25th consecutive year of dividend increases. As people get more comfortable with shopping in person again, TJX Companies
will benefit since 80% of the U.S. lives within 10 miles of one of its physical retail stores.
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If you are looking for the next hot growth market, a market at the intersection of multiple secular trends, look no further than the EV market. Electric vehicles. It may not sound like much, but the days of EV as a fringe market are over.
Think about this. There is an average of 90 million vehicles sold annually. That’s units, not dollars, total sales of vehicles topped $3.1 trillion in 2019, and the number is expected to grow over the long-term.
The EV market is less than 3.% of global vehicle sales, but it’s growing. EV is expected to account for more than 50% of the total auto-fleet by 2050, and that target could be reached much sooner if battery technology advances.
When it comes to the EV market, it’s a “rising tide lifts all ships” kind of market, but there are still some clear winners to focus on.
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