If you're looking to invest in retail stocks listed on the ASX, here's an idea for you. Rather than deciding on just one retailer to add to your portfolio, you could instead take a diversified approach and spread your funds across 5 of the best ASX-listed retailers.
Here's 5 of my top picks in the retail sector – in no particular order…
Premier Investments Ltd (ASX: PMV)
Owner of Just Jeans, Jay Jays, Jacqui.E, Dotti, Portmans, Peter Alexander and Smiggle, and chaired by one of Australia's best retailers – Solomon Lew – Premier has a well-diversified portfolio of brands. Smiggle and Peter Alexander might be the fastest growing businesses, but Just Jeans and Jay Jays still represent half of all retail revenues. Premier also holds 27% Breville Group Ltd (ASX: BRG), worth $272 million and around $300 million in cash.
Greencross Limited (ASX: GXL)
Greencross is most often considered a veterinary play, but the fact is that since the company's merger with Petbarn (and Animates in New Zealand) and acquisition of City Farmers, 75% of revenues come from retail stores, with 25% from traditional Greencross Vets. With huge potential to grow market share in an industry with big tailwinds – more and more families treat their pets as part of the family – Greencross could have many years of strong growth in it.
JB Hi-Fi Limited (ASX: JBH)
The much maligned consumer electronics retailer has survived and prospered while consumer electronics have changed enormously over the past 10 or so years. Remember the boom in car radios and high quality hi-fi systems? Recent expansion into the sale of whitegoods also appears to be a good move. Sporting a fully franked dividend yield of 4.6% and a trailing P/E ratio of 15x is fairly attractive for a quality business.
Nick Scali Limited (ASX: NCK)
The furniture importer and lounge retailer may be small, but it sure has produced the goods, returning shareholders an average of 13.3% each year over the past decade. Shares may not look cheap on a P/E of 17.2x and a dividend yield of 4% (fully franked), but you might want to add Nick Scali to your watchlist and wait for a pullback (as I suggested back in February in this article).
Reject Shop Limited (ASX: TRS)
Ok, this one's a roughy – but I do own it myself. Reject Shop has suffered some temporary setbacks recently, not to mention weak consumer confidence hurting its business. But with a recent massive rollout of stores (double its usual annual rate) and a turnaround in consumer confidence, could see the Reject Shop take off from here. Trading not far off 52-week lows, now might be the perfect time to take a closer look at this discount retailer.
So there you have a mix of strong growth and dividends, some solid stocks as well as one potentially massive turnaround story. And if you want even more…
