3 Stocks to Play the Shopping Mall Revival

Wednesday, May 19, 2021 | Sean Sechler
3 Stocks to Play the Shopping Mall RevivalWhile we know that 2020 was a terrible year for most retailers, investors might be surprised to learn that there are some promising signs coming out of the brick-and-mortar retail space at this time. Earlier this week, we saw April U.S. retail sales come in at $619.9 billion, up 51.2% from a year ago. You also have tons of people making their way back to shopping malls thanks to the COVID-19 vaccine rollout. Combine that with all of the stimulus payments that were sent out over the last year and you have a recipe for a rebound in many of the major retail stocks.

It’s tough to determine whether or not this bounce back in shopping mall activity is a long-term trend or simply transitory, especially given the rise of e-commerce. With that said, there are more than a few retail stocks that could rally in the short-term and are worth a look at this time if you are interested in potentially profiting from the trend. Let's take a look at 3 stocks to play the shopping mall revival.

Macy’s (NYSE:M)

Many investors left Macy’s for dead last year, given the fact that people simply were not visiting physical stores with the pandemic going on. Don’t write this iconic retailer off yet, as it’s one of the best ways to play the rebound in retail sales. Macy’s operates retail stores, websites, and mobile applications under well-known brands such as Macy’s, Bloomingdale’s, and Blue Mercury. The company sells a variety of different merchandise such as apparel and accessories, cosmetics, home furnishings, and other consumer goods.

There are certain things that people like to shop for in-person, and many of the goods that Macy’s sells fall under that category. The company also just reported a surprise Q1 profit and raised its full-year outlook, both signs that things are looking up for this beleaguered retailer. Q1 comparable sales were up 62.5% year-over-year and Macy’s also saw digital sales growth of 34% year-over-year, which tells us that the company is seeing positive momentum in its e-commerce sales channel. Macy’s has plenty of questions to answer over the long term, but in 2021 it’s a company that could surprise investors in a good way.

Simon Property Group (NYSE:SPG)

If you are interested in taking advantage of a rebound in foot traffic at shopping malls, why not look at one of the largest retail real estate property owners in the world? Simon Property Group is a real estate investment trust that owns, develops, manages, leases, and acquires regional malls and community shopping centers. Simon owns or has an interest in 235 properties spread over 37 different states. What’s also important to note here is that Simon’s properties are in attractive locations, which is very important in the increasingly competitive retail industry.

Simon Property Group is also interesting because the company has access to lots of capital that allows it to take advantage of potentially lucrative investment opportunities. For example, the company recently acquired the retailer Eddie Bauer at a discount in the company’s joint venture with Authentic Brands. Simon reported decent Q1 results that beat estimates, and the stock offers investors a 4.25% dividend yield at this time that looks to be safe for the time being. Add this one to your shopping list if you want a smart way to play the recovery in malls. 

L Brands (NYSE:LB)

Last on our list is L Brands, one of the best specialty retailers to consider at this time. This company is primarily focused on women’s intimate and other apparel, personal care, and beauty and home fragrance products. With classic brands like Victoria’s Secret and Bath & Body Works, L Brands physical retail stores are found in most shopping malls around the world and could see an uptick in sales as foot traffic picks up again. L Brands plans to spin off Victoria’s Secret and Bath & Body Works into new publicly traded companies in the near future, which should be viewed as a positive that could unlock value for shareholders.

This is a retail stock that has been surprisingly strong in 2021 and is up over 75% year-to-date. The company has been working hard to improve its fundamentals, which should also be applauded by investors. L Brands reports its Q1 earnings after the bell on May 19, and if the company delivers strong results the stock could be heading for new 52-week highs. Keep an eye on this one if you are interested in a retail stock that has been showing a lot of relative strength this year.

Should you invest $1,000 in Macy's right now?

Before you consider Macy's, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Macy's wasn't on the list.

While Macy's currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Macy's (M)2.6$23.17+2.4%2.59%14.39Hold$23.11
L Brands (LB)2.9$0.00-100.0%16.02Buy$71.58
Simon Property Group (SPG)2.9$135.12+1.1%4.44%29.50Hold$137.65
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