Best dividend large-cap retail stocks to invest in Q3 2024

In the fast-paced retail sector, large-cap companies with strong dividend policies provide a blend of growth potential and steady income. These retail giants not only offer stability in volatile markets but also deliver reliable returns through consistent dividend payouts, appealing to both income-focused and growth-oriented investors.

Dick's Sporting Goods stands out with its robust dividend yield and focus on athletic apparel and equipment, capturing the consumer's shift toward active lifestyles. Lowe's offers investors a steady dividend alongside its extensive home improvement product range, benefiting from ongoing trends in home renovation and maintenance. TJX Companies provides a unique investment opportunity with its off-price retail model, combining value-driven shopping experiences with regular dividend distributions.

For investors looking to tap into reliable income while capitalizing on the growth of major retail brands, these large-cap stocks present compelling opportunities in Q3 2024. Dive into our detailed analysis to explore the best dividend large-cap retail stocks to watch this quarter.

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Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in top 10 stocks mentioned in this article 5 years ago.

Now, let`s take a closer look at each of the companies:

  • Dick's Sporting Goods (DKS)

    Dick's Sporting Goods is a leading sporting goods retailer in the United States, offering a wide range of athletic apparel, footwear, and equipment. With a strong network of stores and an expanding online presence, Dick's caters to both professional and recreational athletes.

    Dick's Sporting Goods financial statements

    Analysts recommendation: 2.17

    Financial Health

    • Return on assets (ROA): 11.77%
    • Return on equity (ROE): 42.65%
    • Return on investment (ROI): 16.51%

    Profitability

    • Gross margin: 35.74%
    • Operating margin: 11.24%
    • Net profit margin: 8.65%

    Growth

    • EPS (past 5 years): 30.34%
    • EPS (current): 14
    • EPS estimate (next quarter): 3.48
    • EPS growth (this year): 7.61%
    • EPS growth (next year): 6.3%
    • EPS growth (next 5 years): 6%
    • EPS growth (quarter-over-quarter): 15.36%
    • Sales growth (past 5 years): 9.42%
    • Sales growth (quarter-over-quarter): 0.49%

    💡 Why invest in Dick's Sporting Goods?

    Dick's Sporting Goods offers several potential advantages for investors seeking exposure to the retail industry:

    • Essential Products: Sporting goods are essential for athletes and fitness enthusiasts, ensuring a consistent demand for the company's products.
    • Diversified Product Offering: Dick's offers a wide range of products, catering to various sports and activities, reducing reliance on any single category.
    • Strong Brand Recognition: The Dick's Sporting Goods brand is well-established, attracting a loyal customer base.
    • Growth Potential: The increasing popularity of sports and fitness activities presents opportunities for growth and expansion.

    🐌 Key considerations before investing in Dick's Sporting Goods

    However, before investing in Dick's Sporting Goods, it's crucial to consider these potential challenges:

    • Economic Sensitivity: The retail industry can be cyclical, and economic downturns can impact consumer spending on discretionary items like sporting goods.
    • Competition: The sporting goods retail market is competitive, with both traditional retailers and online platforms vying for customers.
    • Evolving Consumer Preferences: Changes in consumer trends and preferences can impact product demand.
    • Supply Chain Disruptions: Global supply chain issues can affect product availability and costs.

    Final thoughts on Dick's Sporting Goods

    Dick's Sporting Goods' strong brand, diverse product offering, and focus on the growing sports and fitness market make it an attractive investment for those seeking exposure to the retail industry. However, economic sensitivity, competition, consumer trends, and supply chain disruptions necessitate careful consideration. Thorough research on Dick's Sporting Goods' expansion plans, financial performance, and the overall retail landscape is crucial before investing.

  • Lowe's (LOW)

    In the vibrant realm where hammers whisper possibilities and paint buckets brim with color, Lowe's reigns supreme. This home improvement titan isn't just slinging lumber and lightbulbs; it's orchestrating a vibrant symphony of convenience, expertise, and innovation, transforming DIY dreams into polished realities. But can this hardware hero translate its home improvement mastery into rewarding returns for your portfolio? Let's explore the hidden currents propelling Lowe's rise, alongside the potential storm clouds to consider before joining this DIY odyssey.

    Lowe's financial statements

    Analysts recommendation: 2.21

    Financial Health

    • Return on assets (ROA): 15.67%
    • Return on equity (ROE): N/A
    • Return on investment (ROI): 29.43%

    Profitability

    • Gross margin: 31.15%
    • Operating margin: 12.31%
    • Net profit margin: 8.16%

    Growth

    • EPS (past 5 years): 35.96%
    • EPS (current): 11.99
    • EPS estimate (next quarter): 1.82
    • EPS growth (this year): -9.18%
    • EPS growth (next year): 4.97%
    • EPS growth (next 5 years): 2.12%
    • EPS growth (quarter-over-quarter): -2.55%
    • Sales growth (past 5 years): 4.52%
    • Sales growth (quarter-over-quarter): -1.47%

    💡 Why invest in Lowe's?

    Lowe's robust profile presents a compelling case for investors seeking exposure to the resilient and evolving home improvement sector. Here's what fuels its formidable toolbox of success:

    • Home Improvement Hegemony: Lowe's boasts a vast network of stores and online presence, securing its leadership in the home improvement landscape. This market dominance translates to consistent customer traffic and predictable revenue streams, laying a solid foundation for future growth.
    • DIY Delight: Beyond basics, Lowe's thrives on its curated selection of tools, appliances, and design inspiration, catering to diverse home improvement projects and budgets. This vast product portfolio keeps customers coming back for more, fostering brand loyalty and driving repeat business.
    • Innovation Alchemist: From smart home technology to sustainable product offerings, Lowe's invests heavily in R&D, staying ahead of the curve with solutions that cater to modern homeowners' evolving needs. This commitment to innovation ensures its offerings remain relevant and future-proofs its operations.
    • Pro Powerhouse: Recognizing the professional market's potential, Lowe's caters to contractors and tradespeople with dedicated services and bulk discounts. This diversification mitigates risk and unlocks a lucrative customer segment with consistent demand.

    🐌 Key considerations before investing in Lowe's

    While Lowe's navigates the DIY aisles with its market dominance and diverse offerings, there are some potential headwinds to consider before joining this home improvement journey:

    • Valuation Concerns: Like many established retail companies, LOW's stock can be volatile, and the current price might reflect expectations of future growth and economic trends. A cautious approach with a patient, long-term perspective is wise.
    • Economic Sensitivity: Economic downturns can impact discretionary spending, potentially hitting Lowe's sales and profitability. Monitoring broader economic trends is crucial for anticipating potential fluctuations.
    • Online Competition: E-commerce giants and online home improvement retailers are vying for market share, requiring Lowe's to constantly adapt its online strategy and leverage its physical store experience to maintain its competitive edge. Stay informed about industry trends and how Lowe's plans to differentiate itself.
    • Housing Market Headwinds: A volatile housing market can impact demand for home improvement projects, potentially affecting Lowe's business volume. Close monitoring of housing market trends is crucial for anticipating potential fluctuations.

    Final thoughts on Lowe's

    Lowe's market dominance, diverse product portfolio, commitment to innovation, and focus on the professional market paint a potentially promising picture for long-term investors seeking exposure to the dynamic home improvement sector. However, the volatile nature of the stock, economic sensitivity, rising online competition, and housing market headwinds warrant a measured approach. Thorough research, analysis of Lowe's future plans and the retail landscape, and a clear understanding of your risk tolerance are crucial before joining this DIY spree. Remember, navigating the intricate terrain of retail stocks requires both a discerning eye for innovative products and a balanced perspective on potential challenges. Choose wisely, and your portfolio might just find itself building a foundation of growth alongside the Lowe's empire.

  • TJX Companies (TJX)

    In the bustling bazaar where deals whisper promises of retail therapy and treasure hunters scour aisles for forgotten gems, TJX Companies reigns supreme. This off-price titan isn't just slinging discounted sneakers and forgotten designer labels; it's orchestrating a treasure map of value, offering savvy shoppers a thrill with every aisle and a smile with every checkout. But can this discount maestro translate its retail mastery into rewarding returns for your portfolio? Let's explore the hidden threads weaving TJX's success, alongside the potential snags to consider before joining this shopping spree.

    TJX Companies financial statements

    Analysts recommendation: 1.75

    Financial Health

    • Return on assets (ROA): 15.51%
    • Return on equity (ROE): 64.89%
    • Return on investment (ROI): 25.3%

    Profitability

    • Gross margin: 30.48%
    • Operating margin: 11.16%
    • Net profit margin: 8.63%

    Growth

    • EPS (past 5 years): 9.7%
    • EPS (current): 4.25
    • EPS estimate (next quarter): 1.16
    • EPS growth (this year): 8.54%
    • EPS growth (next year): 9.52%
    • EPS growth (next 5 years): 9%
    • EPS growth (quarter-over-quarter): 10.52%
    • Sales growth (past 5 years): 9.32%
    • Sales growth (quarter-over-quarter): 6.02%

    💡 Why invest in TJX Companies?

    TJX's dominant position in off-price retail, captivating treasure hunt model, operational efficiency, and global reach create a compelling case for investors seeking exposure to the evolving retail landscape. Here's what fuels its discount symphony:

    • Discount Dominance: TJX dominates the off-price space with iconic brands like T.J. Maxx, Marshalls, and HomeGoods, captivating bargain hunters with a constantly changing treasure trove of discounted designer labels, home goods, and more. This leadership translates to consistent foot traffic and reliable revenue streams.
    • Treasure Hunt Triumphant: Beyond brand names, TJX thrives on the thrill of the find, constantly refreshing its inventory with unique merchandise, creating a dynamic shopping experience that keeps customers coming back for more. This treasure hunt model fosters brand loyalty and customer engagement.
    • Operational Efficiency Maestro: From nimble buying strategies to lean logistics, TJX operates with unmatched efficiency, maximizing profit margins and squeezing value out of every discounted item. This operational prowess ensures financial stability and resilience in a competitive market.
    • Global Expansion Explorer: With operations spanning continents, TJX taps into diverse consumer preferences and unlocks international growth potential. This global reach provides access to emerging markets with rising disposable incomes and a growing demand for affordable luxury.

    🐌 Key considerations before investing in TJX Companies

    While TJX navigates the shopping aisles with its discount magic, there are some potential tripwires to consider before embarking on this retail odyssey:

    • Valuation Concerns: Like many established retail companies, TJX's stock currently sits near multi-year highs. This might limit immediate gains, and a cautious approach with a patient, long-term perspective might be wise.
    • Economic Sensitivity: Economic downturns can impact consumer spending, potentially hitting TJX's sales and profitability. Monitoring broader economic trends is crucial for anticipating potential fluctuations.
    • Online Competition Intensifies: E-commerce giants and online discount platforms are vying for market share, requiring TJX to adapt its strategy and leverage its unique physical store experience to maintain its competitive edge. Keep an eye on online competitor advancements and how TJX plans to differentiate itself.
    • Inventory Management Hurdles: Managing a constantly changing inventory of discounted items can be challenging, and inaccurate predictions can lead to markdowns and lower profit margins. Close monitoring of inventory management strategies and their impact on profitability is crucial.

    Final thoughts on TJX Companies

    TJX's discount dominance, treasure hunt model, operational efficiency, and global reach paint a potentially promising picture for long-term investors seeking exposure to the dynamic retail sector. However, near-peak valuation, economic sensitivity, rising online competition, and inventory management hurdles warrant a measured approach. Thorough research, analysis of TJX's future plans and the retail landscape, and a clear understanding of your risk tolerance are crucial before joining this shopping spree. Remember, navigating the intricate terrain of retail stocks requires both a discerning eye for hidden gems and a balanced perspective on potential obstacles. Choose wisely, and your portfolio might just stumble upon the hidden treasures of value, powered by the strategic scorecard of TJX Companies.

  • Target (TGT)

    Beyond trendy merchandise and affordable prices, Target Corporation reigns as a retail titan with over 1,900 stores across the U.S. It caters to every household with a diverse selection of products, from apparel and home décor to groceries and essentials. Embracing innovation through self-checkout lanes, mobile app, and drive-up services, Target ensures a convenient and personalized shopping experience, solidifying its position as a leader in the modern retail landscape.

    Target financial statements

    Analysts recommendation: 2.28

    Financial Health

    • Return on assets (ROA): 7.62%
    • Return on equity (ROE): 32.37%
    • Return on investment (ROI): 13.55%

    Profitability

    • Gross margin: 26.07%
    • Operating margin: 5.58%
    • Net profit margin: 4.06%

    Growth

    • EPS (past 5 years): 10.17%
    • EPS (current): 9.44
    • EPS estimate (next quarter): 2.15
    • EPS growth (this year): -3.9%
    • EPS growth (next year): 6.95%
    • EPS growth (next 5 years): 8%
    • EPS growth (quarter-over-quarter): -11.84%
    • Sales growth (past 5 years): 7.62%
    • Sales growth (quarter-over-quarter): 1.06%

    💡 Why invest in Target?

    Target's blend of trendy finds and everyday essentials, coupled with its robust omnichannel strategy, makes it a captivating buy for savvy investors. Here's why:

    • Trendsetting Retail: Target consistently wows shoppers with on-point collaborations, curated product lines, and private label brands, fostering brand loyalty and driving consistent sales.
    • Omnichannel Excellence: Seamless integration of online shopping, in-store pickup, and delivery options caters to modern consumer preferences and positions Target as a leader in convenient retail experiences.
    • Financial Prowess: Impressive margins, healthy cash flow, and a growing dividend history showcase Target's financial strength and commitment to rewarding shareholders.
    • Growth Potential: With continued expansion plans, digital initiatives, and a dedicated focus on customer satisfaction, Target's future trajectory appears bright and promising.

    🐌 Key considerations before investing in Target

    While Target's trendsetting appeal and omnichannel prowess are undeniable, some factors warrant investor caution:

    • Profitability Challenges: Despite strong customer loyalty and sales growth, Target's profit margins haven't kept pace. Rising operational costs and investments in expansion could further squeeze profitability, requiring the company to find ways to improve efficiency and maintain its competitive edge.
    • Competition: The retail landscape is fiercely competitive, with giants like Walmart and Amazon vying for market share. Maintaining customer loyalty and navigating competitive pressure will be crucial for Target's future success.
    • Economic Dependence: Consumer spending directly impacts Target's revenue. Economic downturns could weaken sales and profitability, requiring the company to adapt quickly.
    • Limited International Presence: Compared to Walmart, Target's international presence is smaller, potentially limiting its overall growth potential. Expanding its global reach while maintaining its distinct brand identity will be a significant challenge.

    Final thoughts on Target

    Target's trendy finds, strong omnichannel strategy, financial prowess, and growth potential offer a compelling picture for long-term investors. However, profitability challenges, intense competition, economic dependence, and limited international presence warrant careful consideration. Thorough research and analysis of Target's future plans and market dynamics are crucial before making any investment decisions. Remember, navigating the complexities of retail necessitates a judicious approach to maximize your investment journey.

If you are interested in other stock categories, check out my other lists of the best dividend large-cap tech, retail, financial, healthcare, industrial, basic materials, energy, utility stocks.