With continued turmoil, bailouts, and endless new rounds of parliamentary elections taking place almost daily in Europe, investors want to find assets that are not exposed to the economic uncertainty in the region.
We began a search in the retail sector for firms that have exposure solely in the U.S. marketplace and show potential for further growth.
Ultimately we found three companies whose share prices have benefitted from consumer behavior in America as well as consistent and steady dividend distribution.
Our Top Picks
The first of these is Dollar Tree, Inc. (DLTR). Renowned as a center for discount retailing and a place that consumers turn to in difficult economic times, this company has benefitted from the economic stagnation that has become apparent over the past few months. The dollar store franchise’s stock is up over twenty percent this calendar year, and with consumers still unsure as to whether or not the economy is gaining steam, it is likely they will continue to frequent this retailer in large numbers.
Walgreen’s (WAG) is another company in this sector who is presenting itself as an attractive buy right now. After its share price took a decline following a conflict with its prescription provider, Express Scripts (ESRX), at the beginning of this year, the stock now offers itself at an reasonable price point with remaining room for growth. The share price currently hovers just above the fifty-two week low, yet the company still displays a sound balance sheet and pays out a healthy 2.9% dividend yield. Between these factors and because Walgreen’s derives one-hundred percent of their revenue from the United States, average analysts rate it as a moderate buy.
The final retailer we found who is totally reliant on business in the United States is CVS Caremark (CVS). After gaining business from the customers Walgreen’s lost in the early part of 2012, CVS saw a fourteen-percent rise in revenues over the same time. As competitors like RiteAid (RAD) are likely to struggle going forward and Walgreen’s has an unorganized prescription business, it would appear that CVS will maintain a competitive advantage in the mid-price retail business along with freedom from European problems.
Business Section: Investing Ideas
With a lack of exposure to European markets all of the names mentioned above offer different advantages and opportunities to operate in a sound environment.
Listed below in more detail are each of the aforementioned stocks.
Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:
(Written by Dan Connelly)
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Analyze These Ideas: Getting Started
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Dollar Tree, Inc. (DLTR, Chart, Download SEC Filings)
- CVS Caremark Corporation (CVS, Chart, Download SEC Filings)
- Walgreen Co. (WAG, Chart, Download SEC Filings)
- Rite Aid Corp. (RAD, Chart, Download SEC Filings)
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