After a year of macroeconomic and geopolitical challenges, inflation is beginning to ease, and the Fed is expected to slow down the pace of rate hikes. Federal Reserve Chairman Jerome Powell stated that…
smaller interest rate increases are likely ahead and could start as soon as this month.
Despite the high inflation, consumer spending has remained firm. According to the Commerce Department, consumer spending increased 0.8% sequentially in October, posting its highest gain since June, driven by spending on rent, food, and new vehicles. Also, the U.S. Census Bureau reported that the overall retail sales in October rose 1.3% sequentially and 8.3% year-over-year.
The National Retail Federation (NRF) expects holiday retail sales to reach between $942.60 billion and $960.40 billion during November and December, representing an increase of 6% and 8% year-over-year. NRF President and CEO Matthew Shay said, “In the face of the recent challenges, many households will supplement spending with savings and credit to provide a cushion and result in a positive holiday season.”
Given this backdrop, investors could consider buying fundamentally strong retail stocks Walmart Inc. (WMT), The Hershey Company (HSY), Dillard’s, Inc. (DDS), and Movado Group, Inc. (MOV).
Walmart Inc. (WMT)
WMT engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club.
Over the last three years, WMT’s dividend payouts have grown at a 1.9% CAGR. Its four-year average dividend yield is 1.71%, and its forward annual dividend of $2.24 per share translates to a 1.48% yield. It is expected to pay a quarterly dividend of $0.56 per share on January 3, 2023.
On October 31, 2022, Popable, a pop-up shop marketplace platform, and WMT announced a strategic partnership that allows…
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