We all need to have a little fun when things around the world are getting pretty serious. So let’s talk about some Thanksgiving stocks.
I’m writing this about six weeks before Thanksgiving Day in the United States. With due respect to Christmas, this is the country’s biggest holiday. Every year, investors try to assign meaning to the economic impact of holiday travel, Black Friday and the food and drink itself.
It’s a big deal and likely to be the same in 2023. Despite an inflation rate that’s rising and consumer savings in decline, Thanksgiving finds a way. Much will be written about retail stocks to buy for Black Friday. But for this article, I’m focusing on food, beverage and travel stocks — three staples of Thanksgiving weekend.
So here are three Thanksgiving stocks to consider. All three offer investors some value right now and will likely show some growth for the rest of 2023 into 2024.
Delta Airlines (DAL)
The Wednesday before Thanksgiving is one of the most traveled days in the United States. Whether by car, train or plane, Americans move around the country to gather with loved ones. Delta Air Lines (NYSE:DAL) is well-positioned to capture its fair share of those travelers. The company has one of the most extensive networks of domestic routes in the continental U.S.
DAL stock is down over 32% in the last three months. In July, the airline lowered its forward guidance for the year on an anticipated slowdown precipitated by the rising cost of jet fuel.
However, in the company’s most recent earnings report on October 12, Delta beat the top and bottom lines. Both numbers were higher year-over-year (YoY), and business is well above 2019 levels.
The company is using this as an opportunity to pay down debt. It’s also rewarding shareholders by reinstating the dividend it suspended in 2020. Delta wasn’t the only carrier to suspend its dividend, but it is one of the first to reinstate it.
As you’re considering Thanksgiving stocks to buy, it’s worth noting that DAL stock is trading near its 52-week low and around 5.4x forward earnings. Value now and growth later is an attractive combination.
Kroger (KR)
If you’re not traveling to Thanksgiving dinner, you may be preparing it. And that means shopping for all the staple items that define your holiday tradition. That’s one reason to look at Kroger (NYSE:KR), a pure-play grocery stock that also looks undervalued at this time.
The rate of inflation is still climbing in areas like consumer staples. These are the essential items that people need regardless of their economic situation. Stores like Kroger aren’t immune from the effect of inflation, but they do have pricing power.
Proof of that surfaced in the company’s last earnings report. Revenue missed expectations, but earnings were up. That was true not only for the quarter but YoY. This was confirmation that consumers were cutting back but still paying more. However, at a time like Thanksgiving, consumers are likely to stretch their budgets for that little extra. That’s bullish for KR stock.
Yes, you could argue for Walmart (NYSE:WMT) or Costco (NASDAQ:COST). I won’t argue with either one. But neither of those stocks trades at 9.8x forward earnings like Kroger does.
Constellation Brands (STZ)
Constellation Brands (NYSE:STZ) is last but not least on this list of Thanksgiving stocks. For good reasons and for some not-so-good reasons, the holidays can provide reasons to consume an alcoholic beverage or two. Constellation Brands has a portfolio of beer, wine and spirits it sells in several countries.
Sin stocks are not favored by all investors, but they are some of the best defensive stocks to own. Constellation Brands demonstrated that in its October earnings report when it beat revenue and earnings expectations. And the numbers came in higher on a YoY basis. That means inflation and rising interest rates are still not having much effect on the company’s brands.
One of those brands is Modelo, now the top-selling beer in the United States. That crown used to belong to Anheuser-Busch InBev’s (NYSE:BUD). The latter’s troubles are well documented, and we’ll leave it there in the spirit of the season.
Despite all the positive news, STZ stock is still down about 12% in the last three months which makes it essentially flat in 2023. However, it trades at about 19x earnings, a value compared to other S&P 500 stocks.
On the date of publication, Chris Markoch did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
