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

Video Credit: The Street - Duration: 03:15s - Published < > Embed
Nordstrom and Macy's V. Kohl's and Discount Retailers: How to Stock Shop In 2019

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

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.

, TJX Companies Inc.

, or Ross Stores Inc.

, and less at full-priced players like Nordstrom Inc.

Or Macy's Inc.

.

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.

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