5 Top Stocks To Fall For On Valentine's Day

Individuals ramp up purchases of things like candies, chocolates, cologne, greeting cards along with flowers and other such gifts to pamper their loved ones on Valentine’s Day. Demand for dining out also sees an uptick.

This Valentine’s Day won’t be any different. The demand for such discretionary items is likely to shoot up, largely facilitated by record wage growth and higher confidence on household income.

Given the positive trends, it will be prudent to bet on fundamentally-sound companies that could make the most of Valentine’s Day.

Americans to Spend Billions This Valentine’s

As per the recent annual survey by the National Retail Federation and Prosper Insights and Analytics, U.S. consumers are expected to spend a total of $19.6 billion on discretionary items this V-Day, up from $18.2 billion last year. This number will be the second-highest in the survey’s 15-year history, topped only by $19.7 billion witnessed in 2016.

On average, consumers will spend $143.56, up from last year’s $136.57, as nearly 55% of the population celebrates the day. In fact, the survey shows that this year, consumers will spend an average $88.98 on spouses ($21.1 billion), $25.29 on children or parents ($3.5 billion), $7.26 on children’s classmates or teachers ($991 million), $7.19 on friends ($982 million), $4.79 on co-workers ($654 million) and $5.50 on pets ($751 million). Largely, consumers who are in the age group of 25 to 34 will be the biggest spenders, averaging $202.76.

Nearly $4.7 billion will be spent on jewelry (19%), $1.9 billion on clothing (17%), $1.5 billion on gift cards/gift certificates (15%) and $2 billion on flowers (10%). But, most of the spending will come from eating out, around $3.7 billion (35%), while candy purchases will be up 55% from last year to a total of $1.8 billion. In the meantime, tickets to concerts or sporting events, better known as ‘gifts of experience’, continues to be in demand.

And when it comes to shopping venues, much of it remains same as last year. Consumers planning to shop at department stores, discount stores, online, specialty stores, florists and local small business will be around 35%, 32%, 29%, 19%, 17% and 14%, respectively.

Consumer Discretionary Spending on the Rise

Americans are set to splurge on discretionary items this Valentine’s Day, courtesy of fatter paychecks. Wages are growing at the quickest pace since the end of the last decade, which plays a significant role in driving consumer discretionary spending.

Average hourly wages increased 9 cents, or 0.3%, to $26.74 in January. This helped the average year-on-year hourly earnings to rise to 2.9%, the highest since June 2009. Wages grew on a tighter labor market; tax cut policy and a rise in the minimum wage threshold in several states. Minimum wage has been raised in 18 states in January, which had a positive impact on 4.5 million workers, per the Economic Policy Institute (read more: Original post

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Written By: Zacks Investment Research