NEW YORK (TheStreet) -- Retail stocks have gotten pummeled this earnings season. As evidenced by April's weak retail sales data, consumers just aren't spending as much money as the market had hoped they would. That slow spending has sent the SPDR S&P Retail ETF (XRT) lower over the past month. But that doesn't mean investors can't make money in the sector -- if they cherry-pick from the retailers poised to buck the downward trend.
Here are three dividend-paying retail companies to keep on your radar: Home Depot (HD), DSW (DSW) and Best Buy (BBY) . Aside from paying the above-average yields income investors love, each of these stocks offers the growth potential craved by aggressive investors. And they're relatively cheap, too, which makes them good fits for value investors.
Let's run down the list, starting with Atlanta-based Home Depot.
The world's largest home improvement retailer, it pays a 59 cent quarterly dividend, yielding 2.10% annually. This compares favorably to the average dividend payer in the S&P 500 (SPX) which has an annual yield of 2.00%.
Home Depot stock is up better than 5% on the year, besting the not only the broader averages, but also the 1.5% gain made by rival Lowe's (LOW). Still, despite this relative outperformance, its shares are reasonably priced at just 22 times earnings, against a P/E of 21 for the S&P 500. Despite April's generally weak retail sales data, consumers continue to spend on home improvement projects, as evidenced by to Home Depot's earnings results: It delivered a 6.1% jump in revenue and an almost 5% increase in volumes.