Thanks to a difficult-to-navigate interest rate environment and continued uncertainty, the housing sector remains as volatile as ever, with sales plunging and consumers pulling back purchases. However, not all of the sector is suffering. Some businesses are thriving amid the chaos – and that includes our latest Best Consumer Discretionary Dividend Stocks List pick! Top notch earnings and steady sales have buoyed the name.
In the search for the Best Consumer Discretionary Dividend Stocks, 16 factors are scored across Consumer Discretionary sector dividend stocks and only the best combination of attractive yield, dividend safety, returns potential and low returns risk receive a Buy rating. Our process is systematic, goal focused and designed for moderate risk investors with a long-term horizon seeking allocation to Consumer Discretionary.
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Our pick is one of the largest home improvement retailers in the nation. With nearly 2,000 stores dotting the country, our pick has continued to profit. The key has been our pick’s focus on suburban and rural middle-class markets. Thanks to trends introduced during the pandemic, these areas remain a hotbed of activity for DIYers and contractors alike. In fact, this activity has only increased as more consumers feel stuck in their homes due to the inability to move to larger or newer properties.
In addition to its niche middle-class-focus, our pick has found plenty of ways to grow as well. Thanks to a strategy unveiled during the pandemic, our pick has continued to boost sales of higher-margined installation services, contractor/pro sales and online/omnichannel revenues. The end result is a steady stream of growth that continues to propel its cash flow.
And it continues to share that excess cash well. Our pick has a long history of buyback and dividend growth under its belt. All in all, our pick makes for a top choice blending the stability needed in today’s market while positioning itself for the future.
This well-covered large-cap Cons. Discr. Retail stock is yielding an unattractive 2.17% with a $4.200/shr forward dividend that is paid quarterly. Its $127.7B market cap ranks 2nd out of 46 dividend stocks in the Cons. Discr. Retail industry, the largest being Home Depot (HD) at $303.6B, and they have $38.3B in debt and $4.0B in cash.
The stock has support from both the sell-side and buy-side. Analysts are overweight-rated on average with expectations for eps to grow a healthy 9% next year. Relative to the 52-week highs, the stock is in line with the S&P 500 at -19% vs -15% and is an average performing Cons. Discr. Retail dividend stocks, which are -16% as a group.
Year-to-date, the stock has returned -2% vs 4% for the S&P 500 and -2% for the Cons. Discr. Retail industry.
