Nordstrom and Macy's vs Kohl's and Discount Retailers: How to Stock Shop In 2019

From consumer discretionary, to retail, to department stores, to discount department stores, TheStreet takes you through the best values to find in consumer stocks right now.
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The U.S. consumer is currently strong, but likely weakening

Meanwhile, the broad sub-industry of clothing retail can be hard to parse out for investors. 

Let's take a look at department store retailers. Firstly, "If we do go through a slowdown in consumer spending, they {discount retailers} should benefit from a downshift because of the kind of values they offer," said D.A. Davidson & Co. senior brand apparel analyst John D. Morris. Simply put, as consumer spend weakens, consumers will shop more and more at discounters like Kohl's Corp. (KSS) - Get Report , TJX Companies Inc. (TJX) - Get Report , or Ross Stores Inc. (ROST) - Get Report , and less at full-priced players like Nordstrom Inc. (JWN) - Get Report or Macy's Inc. (M) - Get Report

With "concerns of a recession -- if that is something that is on your mind, you're probably also looking for names other than the high-end luxury brands, the Nordstrom's of the world, the Macy's," said Jim Cramer's Action Alerts Plus Research Analyst Zev Fima. 

And Kohl's in particular might be a relatively advantaged stock pick over its discount retail peers. It's forward earnings multiple of 11.28 is at the lower end of the business, and it offers a premium dividend yield at currently 3.74%. 

"You have a company trading at thirteen, fourteen times forward earnings {now 11}, it's paying you a just under 4% dividend yield right now," Fima said. See Cramer and the AAP team's analysis of Kohl's here

Kohl's is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells KSS? Learn more now.