Consumer staples and consumer discretionary stocks tend to do well over different parts of the economic cycle. CHIQ is a targeted play on the Consumer Discretionary Sector in China – the world's second largest economy by GDP. Consumer discretionary companies usually see sales and profits grow when the economy is growing. However, Chipotle’s price-to-earnings ratio of 130x compared to Domino’s 34x makes the latter a better deal. Consumer staples and consumer discretionary … © 2007-2020 Fusion Media Limited. Ross is a discount retailer that satisfies both of those desires. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Regardless of the pandemic, WING stock showed strong YOY performance in Q2. Logos for Yahoo, MSN, MarketWatch, Nasdaq, Forbes, Investors.com, and Morningstar, How to Invest in Timber Stocks for Wealth, What Stocks Benefit From a Drop in Commodities. Your ability to comment is currently suspended due to negative user reports. More specifically. Consumers tend to reduce discretionary spending in tough economic times such as those we currently face. ROST stock has been steadily climbing upward for the past 3 years. Learn to Be a Better Investor. And when you think about it a little longer, it should actually not be too much of a surprise. Both companies have done well. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy. Consumers exercise more discretion during tough times, and less during times of plenty. One may find country-specific consumer discretionary ETFs, like that of China or Colombia, others may have stocks solely focused on Consumer services - like investing … Types of consumer discretionary companies include fast-food restaurants, entertainment products and services, clothing and automobiles. In fact, if you look at the performance of TJX stock more closely, you’ll see that it has followed a very similar upward trend over the past 3 years as ROST stock. Bitcoiners who missed rally express relief and regret, Slowing U.S. labor market, rising COVID-19 cases cast cloud over economic recovery, 3 Stocks Likely To Benefit From A Vaccine-Enabled Return To Normalcy, Chart Of The Day: Exxon Mobil Shares Ignite On Positive Market Themes, SG FTSE MIB Gross TR 5x Daily Short Strategy RT 18, Vontobel 7X Long Fixed Lever on Natural Gas 8.06, To use this feature, make sure you are signed-in to your account, Make sure you are signed-in with the same user profile. A general method by which to judge a given stock sector’s performance is to find its representative exchange-traded fund. Dunkin Brands’ stock sits in the high $60s, but there is reason to believe that it could approach mid-to-high $70s. Shares quickly rose back up to the $80s, and have plateaued there for 4 months. A stock will be classified into one of the these sectors and only one sector. The discretionary products will not sell as well if consumers are worried about the economy. Investors may note that this seems at odds with the notion that discretionary stocks should trade lower in this economic environment. So, investors are curious to know which discretionary stocks are worth buying now. Consumer staples companies are those that either produce or sell products that people buy on a regular basis. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing. Thanks for your comment. %USER_NAME% was successfully added to your Block List. These market sectors are often used as the basis for sector-focused exchange-traded funds for both U.S. and international stocks. People want to shop, and people want bargains. That trend only stopped due to the pandemic. Furthermore, shares traded around $120 before the pandemic hit. For investors who are unnerved by this type of volatile movement, they can look to consumer discretionary and consumer staples exchange-traded funds (ETFs) for some stability. Consumer Discretionary Stock Performance VS. S&P 500. NYSE and AMEX data is at least 20 minutes delayed. Consumer discretionary companies produce products that the public does not need to purchase. Investors can then compare that ETF against a broad market indicator, such as the S&P 500’s performance. ROST stock dipped below $60 a share in the depths of the downturn. Each week, Zack's e-newsletter will address topics such as retirement, savings, loans, mortgages, tax and investment strategies, and more. You can find more details by going to one of the sections under this page such as historical data, charts, technical analysis and others. Consumers tend to reduce discretionary spending in tough economic times such as those we currently face. Please note that all comments are pending until approved by our moderators. Dividend investors will be pleased to know the company will be paying a dividend of 14 cents in September. All of these factors combine to make Wingstop one of the more appealing fast casual food plays on the market today. This company has undergone steady growth over the past few years. Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. There’s a lot of rebound built into this stock, which makes it one of the key consumer discretionary stocks to watch now. Shares were flat for about 18 months prior to the pandemic, but have just about doubled following the trough. Learn everything you need to know about Vanguard Consumer Discretionary ETF (VCR) and how it ranks compared to other funds. Markets are keen to note, On the other hand, Domino’s has marched upward over the past few years just as many others on this list have. All rights reserved. DPZ stock is another food-based discretionary stock that’s worth buying. More specifically, TSCO stock should benefit from its Q2 35% increase in net sales YOY, and triple digit e-commerce growth. For that reason and many of the reasons mentioned above for Ross Stores, TJX should prove to be one of the more appealing consumer discretionary stocks out there as we start to head into the new normal. Targeted Exposure. Investors should look for an opportunity to buy a dip here. On the other hand, Domino’s has marched upward over the past few years just as many others on this list have. within 12-18 months. It operates within the same niche as Ross Stores mentioned above. Dividend investors will be pleased to know the company will be paying a dividend of 14 cents in September. The Consumer Discretionary Select Sector SPDR ETF (NYSEARCA: XLY) is the representative ETF for this sector. Besides consumer discretionary and consumer staples, the other sectors are energy, materials, industrials, health care, financials, information technology, telecommunications services and utilities. Are you sure you want to delete this chart? Since 'Consumer discretionary' is a very generic term and anything and everything under the sun can qualify for inclusion in this category, there is a big variety of Consumer discretionary exchange-traded funds (ETF). Investors may use this logic in choosing to add cyclicals to their respective portfolios. Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. also known as cyclical stocks, are those stocks which represent companies producing non-essential goods and services. Find here information about the Vanguard Consumer Discretionary Index Fund ETF Shares ETF. Avoid profanity, slander or personal attacks. 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