Inflationary pressure across a range of products is pinching consumers' pockets who are now flocking to discount stores to cope with the same. Well, the strategy to sell products at discounted prices has helped industry players draw customers who have been seeking both value and convenience amid rising prices.
The consumer price index rose to 8.5% in July 2022 on a year-over-year basis. The Fed’s aggressive rate hikes to tame inflation and cool off an overheated economy are making things tough for consumers by squeezing disposable income.
Under the current circumstances, people in the low-to-middle income groups have been exhibiting a preference for discount stores to get quality products at reasonable prices. Clearly, a differentiated product range resonates well with customers’ spending habits. Shoppers are looking for better deals — be it essentials or other consumer goods — amid the current inflationary environment.
As people look for cheaper alternatives, this has been a tailwind for discount stores. Evidently, discount retailers have emerged as preferred investment options. On that note, investing in high-quality dividend stocks such as Target Corporation (TGT - Free Report) and Big Lots, Inc. (BIG - Free Report) might fetch you promising returns. These two stocks have a dividend yield of greater than 2% and a payout ratio of less than 60, reflecting enough room for future dividend increases.
Our Choices
Target: This general merchandise retailer has been making investments to enhance omni-channel capabilities, develop new brands, refurbish stores and expand same-day delivery options to provide a seamless shopping experience to customers. Target has been making multiple changes to its business model to adapt and stay relevant in the ever-evolving retail landscape. The company is always striving to build on its partnerships, especially with popular and high-profile brands.
Target has an estimated long-term earnings growth rate of 9.9%. This Zacks Rank #3 (Hold) company pays out a quarterly dividend of $1.08 ($4.32 annualized) per share, giving a 2.5% yield at the current stock price. TGT’s payout ratio is 41, with a five-year dividend growth rate of 7.2%. (Check TGT’s dividend history here)
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Inflationary pressure across a range of products is pinching consumers' pockets who are now flocking to discount stores to cope with the same. Well, the strategy to sell products at discounted prices has helped industry players draw customers who have been seeking both value and convenience amid rising prices.
The consumer price index rose to 8.5% in July 2022 on a year-over-year basis. The Fed’s aggressive rate hikes to tame inflation and cool off an overheated economy are making things tough for consumers by squeezing disposable income.
Under the current circumstances, people in the low-to-middle income groups have been exhibiting a preference for discount stores to get quality products at reasonable prices. Clearly, a differentiated product range resonates well with customers’ spending habits. Shoppers are looking for better deals — be it essentials or other consumer goods — amid the current inflationary environment.
As people look for cheaper alternatives, this has been a tailwind for discount stores. Evidently, discount retailers have emerged as preferred investment options. On that note, investing in high-quality dividend stocks such as Target Corporation (TGT - Free Report) and Big Lots, Inc. (BIG - Free Report) might fetch you promising returns. These two stocks have a dividend yield of greater than 2% and a payout ratio of less than 60, reflecting enough room for future dividend increases.
Our Choices
Target: This general merchandise retailer has been making investments to enhance omni-channel capabilities, develop new brands, refurbish stores and expand same-day delivery options to provide a seamless shopping experience to customers. Target has been making multiple changes to its business model to adapt and stay relevant in the ever-evolving retail landscape. The company is always striving to build on its partnerships, especially with popular and high-profile brands.
Target has an estimated long-term earnings growth rate of 9.9%. This Zacks Rank #3 (Hold) company pays out a quarterly dividend of $1.08 ($4.32 annualized) per share, giving a 2.5% yield at the current stock price. TGT’s payout ratio is 41, with a five-year dividend growth rate of 7.2%. (Check TGT’s dividend history here)
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Get the latest research report on TGT - FREE
Get the latest research report on BIG - FREE