As Wealthy Consumers Trade Down, 6 ‘Strong Buy’ Dividend Stocks May Be Big Holiday Winners

This has become the ultimate destination for the American consumer regardless of the economy. Costco Wholesale Corp. (NASDAQ: COST) has a unique business model. It operates membership warehouses, and it buys the majority of its merchandise directly from manufacturers, essentially cutting out the middleman. Costco sells in bulk but also at a lower price, thus fueling its rapid growth. With consumers having more free cash to spend as gasoline prices have dropped, this major retailer may continue to see large revenue gains.

Costco remains one of the few conventional retailers where metrics like store traffic, market share gains and a validated model could bode well for international growth and expansion. The company is largely unharmed by e-commerce, and it continues to add stores in strategically mapped out locations.

Costco Wholesale stock investors receive a 0.67% dividend. The Jefferies price target is $610, and the consensus target is $563.03. The shares closed at $530.92 on Monday.

Dollar General

Shares of the low-cost retail store are offering an incredible entry point after dropping 15% since January. Dollar General Corp. (NYSE: DG) provides various merchandise products in the southern, southwestern, Midwestern and eastern United States.

The company offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, and laundry products; packaged food comprising cereals, canned soups and vegetables, condiments, spices, sugar and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer and wine.

Its consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics and dental hygiene and foot care products; pet supplies and pet food; and tobacco products.

In addition, Dollar General offers seasonal products, including holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies. Its home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods. As of February 2022, Dollar General operated 18,190 stores in 47 states in the United States.

Shareholders receive a 0.86% yield. The $285 Jefferies price target compares with a $269.26 consensus target for Dollar General stock. Shares closed on Monday at $253.10.