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15 Top Consumer Discretionary Stocks for the Remainder of 2023

Key Points

  • Offering growth potential, trend exposure and dividends, these stocks cater to investors seeking dynamic opportunities.
  • The consumer discretionary sector’s resilience, driven by growth and sustained consumer confidence, sets the stage for a promising year-end performance.
  • Despite potential risks like inflation and geopolitical tensions, positive consumer spending trends and future growth paths paint a favorable picture for the sector.
  • 5 stocks we like better than General Motors

Consumer discretionary stocks in 2023 present a captivating blend of potential growth, trend exposure and enticing dividends. As we research the best consumer discretionary stocks for the year’s second half, we find that these stocks appeal to investors seeking dynamic investment opportunities.

Let’s look at the top consumer discretionary stocks for the remainder of 2023. We will unravel the unique narratives behind these stocks while providing insights into their opportunities and challenges. 

Overview of consumer discretionary stocks at the end of 2023

In 2023, the consumer discretionary sector stood resilient and is expected to maintain that hardiness until the end of the year. Essential contributing factors strengthened this display of performance:

  • Economic expansion: During a projected 4.9% real GDP growth in the U.S., heightened disposable incomes fueled a surge in expenditures on non-essential goods and services.
  • Sustained consumer confidence: Despite inflation concerns and potential interest rate hikes, robust labor conditions and higher wages maintained consumers’ optimism.
  • Robust holiday spending: The 2023 holiday season is expected to witness exceptional consumer spending on non-essential items, reflecting both post-pandemic demand and robust retail promotions.

Future prospects

Short-term prospects for consumer discretionary stocks appear promising. With a forecast of continued economic growth, sustained consumer confidence and a robust labor market, consumer spending on non-essentials is expected to persist into 2024.

Moreover, long-term trends, including the burgeoning e-commerce sector landscape, the emphasis on experiential spending and tailored retail experiences, all bode well for the consumer discretionary sector.

Cautionary factors

While the outlook remains positive, several risks warrant your close attention:

  • Inflation: Escalating inflation could erode consumer purchasing power, potentially curbing spending.
  • Interest rates: Anticipated interest rate hikes in 2024 might escalate borrowing costs for consumers and businesses alike.
  • Geopolitical uncertainty: Ongoing geopolitical tensions, like the conflicts in Ukraine and Israel, pose potential threats by the possibility of unsettling consumer sentiment.

The consumer discretionary stocks sector shows promise in the near term, yet investors are advised to weigh these risks against their risk tolerance before making investment decisions.

Benefits of investing in consumer discretionary stocks

What are the benefits of investing in consumer discretionary stocks? Let’s take a look: 

  • Potential for higher returns through growth: Consumer discretionary stocks can offer high growth potential, as the companies that produce non-essential goods and services may see increased demand during periods of economic growth. These cyclical stocks show enhanced returns when the consumer market is strong. As the economy grows and consumers have more disposable income, they tend to spend more on discretionary items.
  • Exposure to consumer trends: Consumer discretionary stocks can expose investors to changing consumer trends and preferences, such as shifts towards sustainable or digital products.
  • May pay dividends: The best consumer discretionary stocks may also pay dividends in addition to providing higher growth rates, providing an attractive return rate to investors. 

Downsides of investing in consumer discretionary stocks

It’s worth noting the downsides of investing in consumer discretionary stocks before you choose this investment option:

  • Economic sensitivity: Consumer discretionary stocks are sensitive to economic and consumer behavior changes. When the economy is weak, or consumers are cutting back on spending, consumer discretionary stocks may suffer. These downturns may happen suddenly, resulting in losses that occur as quickly as any gains you see. 
  • Competition: The consumer discretionary sector is highly competitive, with many companies vying for limited market share. Competition can pressure profit margins and limit your growth potential as an investor.

15 best consumer discretionary stocks

This curated selection showcases fifteen noteworthy consumer discretionary stocks that have made a mark in the investment landscape of 2023. These companies represent diverse sectors within the consumer market, offering unique perspectives and promising trajectories.

From established giants like Amazon and Tesla to esteemed brands such as LVMH Moet Hennessy and Nike, these stocks exemplify the breadth and significance of the consumer discretionary sector. Let’s dig into these 15 stocks, offering you a comprehensive view of the key players in the consumer discretionary landscape of 2023.

Amazon.com Inc. 

The company’s financial performance has been stellar, generating over $514 billion in revenue and $21.3 billion in net income. Amazon’s influence on the consumer discretionary sector is undeniable, setting the standard for e-commerce convenience and customer experience. Its growth prospects are immense, with the e-commerce market expected to continue expanding and AWS well-positioned to maintain its cloud computing leadership. 

Amazon is expanding its international presence, exploring new technologies and continuously expanding its range of services, catering to the growing demand for cloud-based solutions. Its advertising business is also poised for significant growth as businesses shift their advertising budgets online. 

Tesla Inc.

Tesla Inc. NASDAQ: TSLA stands out as a revolutionary force in the automotive industry, pioneering electric vehicle (EV) technology and redefining the future of transportation. Its unwavering commitment to innovation, its expanding product portfolio, and its global reach solidify its position as a top consumer discretionary stock for 2023 and beyond.

At the forefront of the EV revolution, Tesla has captivated consumers with its sleek designs, impressive performance and advanced technology. Its Model S sedan has consistently topped rankings for luxury vehicles, while the Model 3 has set the benchmark for affordable EVs. Tesla’s commitment to sustainability resonates with environmentally conscious consumers, making it a brand of choice for those seeking to reduce their carbon footprint.

Tesla’s global reach is rapidly expanding, with production facilities in the United States, China and Germany. The company is actively expanding its Supercharger network, providing convenient charging infrastructure for its growing EV fleet. This global presence allows Tesla to tap into new markets and cater to the diverse needs of consumers worldwide.

LVMH Moet Hennessy Louis Vuitton SE 

stands as a pinnacle of luxury goods, encompassing renowned brands like Louis Vuitton, Dior and Fendi. Its unwavering commitment to craftsmanship, heritage and brand exclusivity has cemented its position as a top consumer discretionary stock for 2023 and beyond.

LVMH’s allure lies in its ability to blend tradition with innovation, creating timeless products with luxury and sophistication. Its craftsmanship is unparalleled, with artisans meticulously crafting each piece to the highest standards. This commitment to quality ensures that LVMH products remain coveted by discerning clientele worldwide.

LVMH’s heritage plays a pivotal role in its success. Its brands, such as Louis Vuitton and Hennessy, have been synonymous with luxury for generations, establishing an aura of prestige and desirability. LVMH carefully preserves this heritage while embracing innovation to remain relevant and appealing to modern consumers.

LVMH’s brand exclusivity is a key differentiator. Its products are not mass-produced; they are carefully crafted in limited quantities, adding to their allure and appeal. This exclusivity creates a sense of aspiration and desire among consumers, driving demand for LVMH’s products.

The Home Depot Inc. 

The Home Depot Inc. NYSE: HD, the largest home improvement retailer in the United States, is a beacon of resilience and growth in the consumer discretionary sector. Its comprehensive product selection, unwavering commitment to customer satisfaction, and strategic expansion plans solidify its position as a top consumer discretionary stock for 2023 and beyond.

Home Depot’s success hinges on its ability to cater to the diverse needs of homeowners, offering an extensive range of products encompassing everything from tools and hardware to appliances and flooring. Its convenient store locations and robust online presence ensure that customers can easily access the products they need, whether embarking on a major renovation or tackling small DIY projects.

Home Depot is renowned for its exceptional customer service. Its knowledgeable staff is always eager to assist customers, providing expert advice and guidance throughout their home improvement endeavors. This commitment to customer satisfaction has fostered a loyal customer base, driving repeat business and fueling the company’s growth.

Home Depot is actively expanding its footprint, both domestically and internationally. The company is strategically opening new stores in underserved markets, expanding its reach to new customers and tapping into untapped growth potential. Additionally, Home Depot is venturing into new markets, such as Mexico, further diversifying its business and positioning itself for global success.

Nike Inc.

Nike Inc. NYSE: NKE, the iconic sportswear brand, remains a dominant force in the consumer discretionary sector, fueled by its unwavering dedication to innovation, brand strength and global reach. Its ability to seamlessly blend style and performance has captivated athletes and fashion enthusiasts worldwide, solidifying its position as a top consumer discretionary stock for 2023 and beyond.

Nike’s innovation prowess is evident in its cutting-edge footwear and apparel designs, constantly pushing the boundaries of performance and style. Its flagship footwear technologies, such as Air and Zoom Air, have revolutionized athletic performance, while its apparel designs seamlessly transition from the field to the streets. This ability to bridge the gap between athleticism and everyday wear has expanded Nike’s reach beyond traditional sporting boundaries.

Beyond its innovative products, Nike’s brand strength is unparalleled. The iconic swoosh logo is instantly recognizable worldwide, symbolizing athletic excellence and style. Nike’s strategic partnerships with renowned athletes and teams further enhance its brand appeal, creating a sense of aspiration and loyalty among consumers.

Nike’s global reach is extensive, with operations spanning over 190 countries. This global presence allows Nike to cater to the diverse needs of consumers worldwide, adapting its products and marketing strategies to local tastes and preferences. Nike’s expanding presence in emerging markets, such as China and India, also provides significant growth opportunities.

Starbucks Co. 

Starbucks Co. NASDAQ: SBUX, the global coffeehouse giant, epitomizes the enduring power of brands and the resilience of the consumer discretionary sector. Its unwavering commitment to premium coffee, customer experience and global expansion has cemented its position as a top consumer discretionary stock.

Starbucks’ success comes from its ability to elevate the coffee experience, offering customers more than just a cup of caffeine. Its premium coffee beans, crafted with care and expertise, form the foundation of its beverages. This commitment to quality has cultivated a loyal customer base that appreciates Starbucks’s consistent and superior taste.

Starbucks excels in creating a welcoming and engaging customer experience. Its cozy atmosphere, friendly baristas and inviting ambiance have transformed its stores into community hubs where people gather to connect, work, or simply enjoy a moment of respite. This focus on customer experience has fostered a strong emotional connection with its patrons.

Starbucks is actively expanding its global footprint, reaching new markets and establishing itself as a ubiquitous coffee destination. Its strategic partnerships with local companies allow it to tailor its offerings to local tastes and preferences, ensuring relevance in diverse markets. Additionally, Starbucks is leveraging technology to enhance its customer experience, introducing mobile ordering and payment options for added convenience.

McDonald’s Co.

McDonald’s Co. NYSE: MCD, the iconic fast-food giant, showcases the enduring appeal of convenience and value in the consumer discretionary sector. Its unwavering commitment to operational efficiency, menu innovation and global expansion has cemented its position as a top consumer discretionary stock for 2023 and beyond.

McDonald’s success hinges on its ability to provide customers with quick, convenient, affordable meals. Its streamlined operations, standardized processes and efficient supply chain enable it to serve a high volume of customers quickly and consistently. This focus on operational efficiency ensures that McDonald’s remains a go-to destination for those seeking a hassle-free meal option.

McDonald’s constantly innovates its menu, adapting to changing consumer tastes and preferences. Its introduction of healthier options, such as salads and wraps, has broadened its appeal to a wider range of customers. Additionally, McDonald’s is experimenting with new technologies, such as self-ordering kiosks and mobile ordering, to enhance the customer experience and keep pace with evolving trends.

McDonald’s is aggressively expanding its global footprint, reaching new markets and establishing itself as a ubiquitous fast-food destination. Its strategic partnerships with local companies allow it to tailor its menu and marketing strategies to local tastes and preferences, ensuring relevance in diverse markets. Additionally, McDonald’s is leveraging its global scale to negotiate favorable pricing from suppliers, further enhancing its profitability.

The TJX Companies Inc.

The TJX Companies Inc. NYSE:

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