Consumer spending makes up 70% of the GDP and is a driving force of the global economy. Without consumer spending, companies go out of business and lay off workers. People spending less money can create a negative feedback loop for the economy until the course reverses.
While fads come and go, some companies continue to generate revenue from consumers. These companies are also in good positions to offer numerous products and raise prices when necessary. Investing in consumer stocks can lead to solid long-term returns and potentially allow you to outperform the stock market. Some consumer stocks also come with diversified revenue streams and steady dividend payouts.
Each consumer stock to buy now has outperformed the S&P 500 year-to-date. They have also delivered rising revenue and profits in recent quarters. Investing in these growth stocks can be a solid move for long-term investors.
Walmart (WMT)
Walmart (NYSE:WMT) offers affordable prices for various consumer goods. It’s the largest grocer and sells various products beyond food. The retailer has been in business for more than 60 years and has navigated various economic cycles during that stretch. Recent quarterly results suggest that Walmart can continue to grow. The company reported 6.0% year-over-year revenue growth in Q1 FY25, while adjusted earnings per share jumped by 22% year-over-year.
While the company had impressive revenue growth, investors should monitor e-commerce and advertising revenue. Both segments were up by more than 20% year-over-year and can strengthen Walmart’s profit margins in the long run. Profits are strong as they are and have contributed to the stock’s 32% year-to-date gain. Furthermore, shares are up by 84% over the past five years.
Walmart stock trades at a 30 P/E ratio and offers a 1.19% yield. Thirty analysts rate Walmart a Buy.
Deckers Outdoor (DECK)
Deckers Outdoor (NYSE:DECK) is the athletic apparel company behind iconic brands like HOKA and UGG. The stock joined the S&P 500 earlier this year and is up 35% year-to-date. The stock has more than quintupled over the past five years. Deckers Outdoor can gain additional momentum due to a 6-for-1 forward stock split. Although stock splits do not increase a company’s intrinsic value, they bring more attention to a stock and make it easier to trade options. Call and put options trading can increase a stock’s volatility.
Wall Street analysts have rated the stock as a Strong Buy and believe it can gain 19% from current levels. It’s easy to give the company’s strong Q4 FY24 results; it’s why analysts are optimistic; given the t quarter, Deckers Outdoor reported a 21.2% year-over-year increase in net sales. Domestic sales were up by 19.4% year-over-year, while national sales jumped by 25.2% year-over-year. Net income surged by 39% year-over-year, resulting in a 13.3% net profit margin for the company.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) makes buying products across various categories easy and convenient. The company’s online marketplace is one of the most recognizable e-commerce sites on the web. The stock has been in the spotlight for many years, first as a FAANG member and now as a member of the Magnificent Seven.
Shares are up by 28% year-to-date and have almost doubled over the past five years. Even with those gains, Wall Street analysts believe that more growth is on the way. The average price target implies a potential 15% upside for the stock. Amazon is currently rated as a Strong Buy among 43 analysts.
The company’s first quarter results have rewarded analysts’ optimism. Revenue increased by 13% year-over-year, featuring double-digit growth rates in domestic and international markets. Amazon Web Services sales increased by 17% year-over-year, while other segments like advertising and groceries also delivered solid gains.
On this date of publication, Marc Guberti held long positions in DECK and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
