DDS to PAG: Five retail stocks to watch amid rising inflation

May 17, 2022 04:16 AM AEST | By Versha Jain
 DDS to PAG: Five retail stocks to watch amid rising inflation
Image source: © Strop7 | Megapixl.com

Highlights 

  • Dillard's, Inc. (NYSE:DDS) has a P/E ratio of 6.5 and a dividend yield of 0.25%.
  • Murphy USA Inc. (NYSE:MUSA) stock has a P/E ratio of 12.97. Its dividend yield is 0.47%, with an annualized dividend is US$1.24.
  • Penske Automotive Group, Inc.'s (NYSE:PAG) P/E ratio is 6.61, and its dividend yield is 1.62%.

The retail industry comprises companies providing durable and non-durable goods, such as apparel, furniture, books, electronics, groceries, auto parts, gardening supplies, etc., to consumers. The sector includes brick-and-mortar retailers and eCommerce companies. 

US retail sales rose 0.8% and 0.5%, MoM, in Feb and March, respectively.

Some of the top retail companies include Costco Wholesale Corp (COST), Walmart (WMT), and Amazon.com (AMZN). Here we discuss five stocks that gave positive one-year and YTD returns.

Dillard's, Inc. (NYSE:DDS)

Market Capitalization: US$5.83 billion
Closing price on May 13, 2022: US$323.69

Dillard's Inc is a cosmetic, fashion apparel, and home furnishings retailer in America. Little Rock, Arkansas-based store offers national and exclusive merchandise and feature products. It also operates a contracting construction company called CDI Contractors.

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The company declared its earnings on May 12 for the quarter ended April 30, 2022. Its net sales were US$1.612 billion compared to US$1.329 billion in the corresponding quarter of 2021. The comparable retail sales grew 23% YoY, and the net income came in at US$251.1 million or US$13.68 per share compared to US$158.2 million or US$7.25 per share in Q1, 2021.

The company declared a share repurchase of US$186.5 million in the Q1 results.

The stock has a P/E ratio of 6.54, and the forward P/E for one year is 13.81. It has a dividend yield of 0.25%, with an annualized dividend of US$0.80. The stock traded in the range of US$416.71 to US$107.52 in the last 52 weeks.

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DDS to PAG: Five retail stocks to watch amid rising inflation

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Murphy USA Inc. (NYSE:MUSA)

Market Capitalization: US$5.99 billion
Closing price on May 13, 2022: US$248.80

El Dorado, Arkansas-based Murphy USA Inc is an American retailer of gasoline products and convenience store merchandise. 

Its stores are 100% company-operated, and most of them are adjacent to Walmart stores. Murphy is positioned as the high volume, low-price fuel retailer in the market, selling through low-cost kiosks and small stores. 

For the quarter ended March 31, 2022, the company earned an operating revenue of US$5.12 billion compared to US$3.54 billion in the same quarter the previous year. The net income of the company was US$152.4 million or US$6.08 per share diluted, compared to US$55.3 million or US$2.01 per share diluted in the same quarter a year ago.  

The stock has a P/E ratio of 12.97, and the forward P/E for one year is 15.51. Its dividend yield is 0.47%, with an annualized dividend is US$1.24.

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Dollar Tree Inc. (NASDAQ:DLTR)

Market Capitalization: US$35.79 billion
Closing price on May 13, 2022: US$159.40

Dollar Tree runs discount stores in the US and Canada. It is headquartered in Chesapeake, Virginia. The company runs 8,647 shops under its namesake banner and 8,016 Family Dollar units as of the fiscal 2021 end.

For the fiscal year ended January 29, 2022, the company reported revenue of US$26.31 billion, an increase of 3.1% YoY from US$25.51 billion in the previous year. Its net income was US$1.33 billion or US$5.80 per share diluted compared to US$1.34 billion or US$5.65 in fiscal 2020.

The company repurchased 9,156,898 shares for US$950 million in fiscal 2021.

The stock has a P/E ratio of 27.41, and the forward P/E for one year is 20.15. 

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Penske Automotive Group, Inc. (NYSE:PAG)

Market Capitalization: US$8.74 billion
Closing price on May 13, 2022: US$115.94

Bloomfield Hills, Michigan-based Penske Automotive Group is a diversified international transportation services company and automotive and commercial truck retailer. It operates in the US and overseas. Besides selling new and used vehicles, its other services include repair, parts, finance, and insurance. 

Its revenue was US$6.98 billion in the quarter ended March 31, 2022, compared to US$5.77 billion in the same quarter a year ago. Its net income came in at US$369.5 million or US$4.76 per share diluted compared to US$182.5 million or US$2.26 per share diluted in the March quarter of 2021. 

The stock has a P/E ratio of 6.61, and the forward P/E for one year is 7.34. PAG’s dividend yield is 1.62%, with an annualized dividend of US$2.0.

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DDS to PAG: Five retail stocks to watch amid rising inflation© Mandritoiu | Megapixl.com

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AutoNation, Inc. (NYSE:AN)

Market Capitalization: US$7.13 billion
Closing price on May 13, 2022: US$123.68

AutoNation is an automotive dealer in the US. Lauderdale, Florida-based company has some 250 dealerships at around 350 locations and 57 collision centers. Besides new vehicles, it also sells used vehicles and parts and provides services like repair and auto financing. 

The company reported revenue of US$6.75 billion for the quarter ended March 31, 2022, compared to US$5.90 billion in the corresponding quarter of 2021. Its net income was US$362.1 million or US$5.78 per share diluted compared to US$239.4 million or US$2.85 per share diluted in the March quarter of the previous year.

The stock has a P/E ratio of 5.66, and the forward P/E for one year is 5.62.

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Bottom line: 

Amid the rising interest rates, US consumer confidence dropped to an 11-year low in early May, Reuters reported last week. The stock market is volatile; hence, investors should carefully analyze the companies before investing in the stock market.


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