5 Top-Ranked Consumer Stocks That Crushed the Market in 2017

Consumers, who are the core of all economic activity, have shown profound optimism lately as is evident from the increased consumer confidence, consumer spending and stable job scenario. Consumers’ favorable position also reflects a steady U.S. economy, which is poised for growth.

The commerce department revealed that annual gross domestic product (GDP) rose 3.3% in third-quarter 2017 (second estimate), above the advance reading of 3% and up from 3.1% growth in the preceding quarter. This growth was supported by increases in consumer spending, inventory investment, business investment, and exports.

Consumer spending rose 2.3% in the third quarter. Further, initial holiday period sales data (during the Thanksgiving weekend) suggests that consumers are increasingly spending on restaurants, clothing, electronics, fuel and groceries in November.

Moreover, consumers’ optimism is well reflected in the Consumer Confidence data, which increased for the fifth straight month and remains at a 17-year high in November. The Conference Board’s Consumer Confidence Index surged to 129.5 in November from October’s reading of 126.2.

A major reason for the high consumer confidence is consumers’ expectations of further improvement in labor market. Notably, the labor market remains attractive with a gradual decline in unemployment rate. The unemployment rate has gone down significantly to 4.1% in November from 4.8% in January.

The uptick in the U.S. economy is well supported by the bullish run of the stock markets in 2017. Major stock indices Nasdaq Composite Index, the S&P 500 and the Dow Jones Industrial Average registered year-to-date growths of 15.2%, nearly 20% and 24.3%, respectively. Not surprisingly, investors can make the most of this market momentum by investing in stocks that have crushed these indices in 2017.

Why Consumer Discretionary Sector?

Well, spending on discretionary items which form a part of the Consumer Discretionary sector is largely dependent on consumers’ spending appetite. Given the favorable background discussed above, consumers are currently willing to spend on discretionary items like durable goods, apparel, entertainment and leisure, and automobiles.

The Consumer Discretionary sector growth trends since the start of 2017 have been very appeasing. Markedly, the sector recorded 17.1% growth year to date, slightly lagging the 19.9% upside of the S&P 500. Further, it carries a Zacks Sector Rank of #9 (out of 16).

Hence, there lies an opportunity to invest in Consumer Discretionary stocks that have outpaced major indices, to make the best of the improving economic situation.

5 Consumer Stocks that Outpaced the Market

That said, we bring five Consumer Discretionary stocks that not only outpaced the market in 2017 but are expected to outperform in the coming years. We have taken the help of the Zacks Stock Screener to pick stocks that outpaced the market (especially S&P 500) this year. These stocks have a market cap of $1 billion or more and a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Marriott International Inc. MAR is a leading worldwide hospitality company focused on lodging management and franchising. Shares of Marriott have grown a whopping 61.3% year to date. Further, the Zacks Consensus Estimate for 2017 increased to $4.24 per share from $4.14 per share in the last 60 days, while estimate for 2018 moved up to $4.79 per share from $4.69 per share. With a market cap of $47.3 billion, the stock has a Zacks Rank #2. (Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here.)

Based in Las Vegas, NV, Wynn Resorts Ltd. WYNN is a leading developer, owner and operator of casino resorts. The company owns and operates casino hotel resort properties in Las Vegas, and in Macau Special Administrative Region of the People's Republic of China. So far this year, Wynn Resorts has gained a whopping 90.9%. The Zacks Consensus Estimate for the fourth quarter increased to $1.32 per share from $1.24 per share in the last 60 days. Further, the estimate for 2017 has moved north from $4.94 per share to $5.34 per share. With a market cap of $17.1 billion, the stock currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

PVH Corporation PVH formerly known as Phillips-Van Heusen Corp., specializes in designing and marketing branded dress shirts, neckwear, sportswear, jeanswear, intimate apparel, swim products, footwear, handbags and other related products. Shares of PVH surged 51% year to date, outperforming the S&P 500. With a market cap of $10.3 billion, the stock currently carries a Zacks Rank #2. In fact, estimates for the current year have risen from $7.71 per share to $7.79 per share in the past 30 days, while next year estimates have risen from $8.74 per share to $8.83 per share.

Michael Kors Holdings Limited KORS is a global luxury lifestyle company, founded by designer Michael Kors. The company produces a diverse assortment of products including handbags, watches, accessories, jewelry and fragrance products and footwear under Michael Kors Collection, MICHAEL Michael Kors and Michael Kors Mens. The stock advanced 47% so far this year. It has a market cap of $9.4 billion and sports a Zacks Rank #1. Moreover, the company witnessed upward estimate revisions in the last 60 days. The estimate for the current year moved up 6.7% to $3.96 per share and for the next year it jumped 5.2% to $4.02 per share.

Deckers Outdoor Corporation DECK is a leading designer, producer, and brand manager of innovative, niche footwear and accessories developed for outdoor sports, and other lifestyle-related activities. With a market cap of $2.4 billion, this Zacks Rank #1 stock has grown a solid 39.2% year to date. Moreover, the company’s estimates witnessed an uptrend in the last 60 days. The estimate for the current year moved up 3.6% to $4.27 per share and for the next year it jumped 4.7% to $4.90 per share.

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Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
 
Marriott International (MAR) : Free Stock Analysis Report
 
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
 
PVH Corp. (PVH) : Free Stock Analysis Report
 
Michael Kors Holdings Limited (KORS) : Free Stock Analysis Report
 
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