Companies in the consumer discretionary sector sell goods and services that are considered non-essential, such as appliances, cars, and entertainment. Prominent examples include Home Depot Inc. (HD), McDonald's Corp. (MCD), and Nike Inc. (NKE). Consumer discretionary companies tend to be more sensitive to the overall business cycle because consumers are more likely to reduce or postpone their discretionary purchases when times are tough. By contrast, companies in the consumer staples sector focus on essential items such as food and beverages.

Consumer discretionary stocks, as represented by the Consumer Discretionary Select Sector SPDR ETF (XLY), have outperformed the broader market, providing investors with a total return of 12.7% compared to the S&P 500's total return of 9.7% over the past 12 months. These market performance numbers and the statistics in the tables below are as of July 30 before post-market earnings. Because we are in the middle of earnings season, some companies may report their latest quarterly results after this date.

Here are the top 3 consumer discretionary stocks with the best value, the fastest earnings growth, and the most momentum.

Best Value Consumer Discretionary Stocks

These are the consumer discretionary stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Consumer Discretionary Stocks

 

Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
MGM Resorts International (MGM) 16.25 8.0 2.9
eBay Inc. (EBAY) 54.53 38.3 8.2
Mohawk Industries Inc. (MHK) 86.01 6.1 8.5

Source: YCharts

  • MGM Resorts International: MGM is a holding company that, through its subsidiaries, owns and operates casino resorts. The company's resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. After the date the data for our screen was collected, the company reported its latest Q2 2020 results, which were hurt by health protocols and travel restrictions related to COVID-19.
  • eBay Inc.: eBay is a global e-commerce company that connects buyers and sellers from different countries throughout the world. The company offers marketplaces for online auctions and classified ads. Due to COVID-19, eBay said in early May that its marketplaces were seeing rising traffic, but that classified ads were falling. eBay reported surging net income and net revenue in its latest quarter, which is Q2 2020. The company noted that results were better than expected and raised its guidance for the year.
  • Mohawk Industries Inc.: Mohawk Industries designs and manufactures residential and commercial flooring products. The company's products include carpet, ceramic tile, laminate, wood, stone, vinyl, rugs, and more.

Fastest Growing Consumer Discretionary Stocks

These are the consumer discretionary stocks with the highest year-over-year (YOY) earnings per share (EPS) growth the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.

Fastest Growing Consumer Discretionary Stocks

 

Price ($) Market Cap ($B) EPS Growth (%)
MGM Resorts International (MGM)  16.25 8.0 3,180
Aptiv PLC (APTV) 83.67 22.6 567.4
eBay Inc. (EBAY) 54.53 38.3 128.3

Source: YCharts

  • MGM Resorts International: See above for company description.
  • Aptiv PLC: Aptiv PLC is an Ireland-based designer and manufacturer of vehicle components focused on safety features and electrical systems.
  • eBay Inc.: See above for company description.

Consumer Discretionary Stocks with the Most Momentum

These are the consumer discretionary stocks that had the highest total return over the last 12 months.

Consumer Discretionary Stocks with the Most Momentum

 

Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Amazon.com Inc. (AMZN) 3033.53 1,513 58.6
Domino's Pizza Inc. (DPZ) 385.15 15.2 54.0
D.R. Horton Inc. (DHI) 66.60 24.2 53.3
S&P 500 N/A N/A 9.7
Consumer Discretionary Select Sector SPDR ETF (XLY) N/A N/A 12.7

Source: YCharts

  • Amazon.com Inc.: Online retailer Amazon.com offers a range of products across many areas, as well as a platform for buyers and sellers to connect. The company also offers streaming entertainment, cloud computing, and other services. Amazon has benefitted from soaring e-commerce traffic as home-bound consumers worldwide increasingly have shopped online during the COVID-19 health crisis. The company reported net income growth of 99.7% on net sales growth of 40.2% for Q2 2020, which ended June 30, 2020.
  • Domino's Pizza Inc.: Domino’s Pizza, a pizza delivery company with a network of over 17,000 stores, saw same store sales surge 16.1% in Q2 2020 as customers changed their behavior amid COVID-19. The company reported net income growth of 28.5% on revenue growth of 13.4% for Q2, which ended June 14, 2020. Domino's on July 16 announced that Jeffrey D. Lawrence would be retiring from his roles as Executive Vice President and Chief Financial Officer (CFO). The company said Lawrence would stay on as CFO until a successor is found.
  • D.R. Horton Inc.: D.R. Horton is a national homebuilder engaged in the construction and sale of single-family housing. The company also provides mortgage financing and title agency services to homebuyers. Despite disruptions from the coronavirus pandemic, record-low mortgage rates boosted demand for housing. D.R. Horton to reported net income growth of 33.6% on revenue growth of 9.9% for its fiscal Q3 2020, which ended June 30, 2020.