Surge in US Retail Sales
On the heels of promising economic data, US Retail Sales experienced a 0.6% surge in December 2023, outpacing the anticipated 0.4% growth. This robust increase, the most significant in three months, was mainly driven by a 1.2% rise in auto sales. Even excluding auto sales, retail activity saw a notable 0.4% uptick.
Resilient US Consumer
The steadfastness of the US consumer amid the trials of the past two years has played a pivotal role in propping up the market with promising economic data.
TJX Companies: A Treasure-Hunt Shopping Experience
The TJX Companies, marked by its off-price retail concept, presents a compelling investment opportunity. The company, home to well-known brands such as T.J. Maxx and Marshalls, has exhibited remarkable stock growth, compounding at an impressive 23% annually over the last 15 years. Notably, the company pays a dividend yield of 1.4% and has consistently bought back its own stock.
Target: A Value Play
Target has faced some stock performance challenges in recent years but offers an enticing prospect with its current depressed stock price, positive earnings trends, and attractive valuation. With analyst-forecasted 38.5% year-over-year earnings growth, Target presents a promising opportunity for investors. Additionally, the company’s generous dividend yield of 3.1% further sweetens the deal for shareholders.
Bottom Line
For investors seeking exposure to the resilience of the US consumer, both The TJX Companies and Target offer distinct investment avenues. While TJX represents a steady compounder, Target presents itself as a value play. With the surge in retail sales, these two stocks are poised to capitalize on the buoyant consumer market.
