Should I invest in physical stores or e-commerce retail stocks?

There's no perfect answer, as both can be excellent investments. E-commerce currently makes up about 20% of U.S. retail sales, so there's clearly room for long-term growth. On the other hand, many brick-and-mortar retailers have competitive advantages of their own, and some have even successfully leveraged their omnichannel strategies to effectively compete with e-commerce companies.

What are the retail stocks with the highest dividends?

As a general rule, if you're looking for higher dividends, you should look for the more mature companies in an industry, and retail is no exception. However, a dividend yield that seems too good to be true can be a warning sign that something is amiss with a business.

What is the best retail stock?

It's tough to call one retail stock the best. However, Amazon has grown into a dominant force in the retail industry. The company's immense scale, vast logistics network, and popular Prime membership program make it tough to beat.

What is a publicly traded retailer?

A publicly traded retailer is a retail company with shares listed on a major public stock exchange. When a retailer is publicly traded, shares can be bought and sold by investors.

Is investing in retail good?

The retail industry is essential, but not all retailers are created equal. When considering a retail stock, look for those with competitive advantages, like a strong brand or economies of scale.

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Best Retail Stocks to Buy in 2026: Are They Right for Your Portfolio?

Key Points

E-commerce growth boosts Amazon, while Home Depot sees weak big-ticket sales due to high interest rates.
Ulta Beauty thrives with in-store experiences, showing strong sales growth despite economic challenges.
Walmart's revenue grows, supported by its robust e-commerce and omnichannel strategies.

Retail stocks give you exposure to how consumers spend on essentials, discretionary purchases, and everything in between. The past few years have been a stress test for the industry: pandemic-era demand shifts, supply chain issues, and inflation all reshaped the landscape.

Now that conditions have cooled, the biggest winners are the retailers with scale, strong omnichannel operations, and clear competitive advantages.

Here are four retail leaders worth considering, plus what to know before investing.

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Ticker Information Table
Company ticker	Market cap	Dividend yield	Industry
NASDAQ:AMZN	$2.3 trillion	0.00%	Multiline Retail
NYSE:HD	$356.3 billion	2.57%	Specialty Retail
NASDAQ:ULTA	$28.7 billion	0.00%	Specialty Retail
NASDAQ:WMT	$986.7 billion	0.76%	Food and Staples Retailing

Data as of Mar 9, 2026. Showing 4 of 4 tickers.

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1. Amazon

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NASDAQ: AMZN

Amazon

Today's Change

(-2.61%) $-5.71

Current Price

$213.23

Key Data Points

Market Cap

$2.3T

Day's Range

$212.53 - $217.31

52wk Range

$161.38 - $258.60

Volume

2.7K

Avg Vol

48M

Gross Margin

50.29%

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As the preeminent e-commerce retailer, Amazon (AMZN -2.61%) got its start selling books and now operates a marketplace enabling the online buying and selling of almost everything. Amazon also owns Whole Foods Market, which gives it a ready-made network of brick-and-mortar retail stores to further engage customers.

In addition to growing its business, Amazon is focused on boosting productivity and trimming expenses. The bottom line has benefited tremendously. Amazon also has the leading cloud services platform, Amazon Web Services (AWS), which is also the fastest growing (and most profitable) part of its business.

With its immense scale, the online retail giant is well positioned to lead the e-commerce market in the long run. Smaller players without Amazon's scale and logistical muscle have struggled to compete, and that isn't likely to change anytime soon.

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2. Home Depot

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NYSE: HD

Home Depot

Today's Change

(-1.04%) $-3.76

Current Price

$357.92

Key Data Points

Market Cap

$356B

Day's Range

$353.22 - $359.45

52wk Range

$326.31 - $426.75

Volume

702

Avg Vol

4.4M

Gross Margin

31.33%

Dividend Yield

2.57%

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The home improvement retailer is best known for its big box warehouse stores and extensive inventory. Serving both do-it-yourself homeowners and professional contractors, Home Depot (HD -0.93%) is consistently expanding both sales and earnings. The company has done an excellent job with omnichannel retail, featuring options such as ship-to-store and in-store pickup for mobile orders.

Home Depot's sales growth has been weak for several years due to slowing consumer spending after years of surging demand for renovation and remodeling projects during the pandemic. In the third quarter of 2025, comparable sales in the United States increased by just 0.1% year-over-year. Consumers continue to spend on smaller projects, but spending in big-ticket categories is weakening.

Elevated interest rates are a significant contributor to this lull, as they erode household spending power and make it challenging to tap into home equity to fund costly projects. However, in the long run, the company has ample room to grow within a fragmented industry.

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3. Ulta Beauty

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NASDAQ: ULTA

Ulta Beauty

Today's Change

(-1.00%) $-6.53

Current Price

$647.11

Key Data Points

Market Cap

$29B

Day's Range

$638.03 - $651.14

52wk Range

$309.01 - $714.97

Volume

18K

Avg Vol

571K

Gross Margin

39.19%

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Tapping into the trend of providing experiences that lure shoppers into stores, Ulta Beauty (ULTA -1.00%) offers in-store salon treatments to its customers. The concept has taken off, and its stores were attracting a large number of customers before the pandemic struck.

Ulta's sales continue to be strong in a challenging environment for discretionary spending, with net sales up approximately 13% year over year in the latest quarter. Some of the growth stemmed from new store openings, but comparable sales increased by 6.3%, which is impressive given the prevailing economic uncertainty.

Total revenue is expected to exceed $12 billion for 2025, once year-end numbers are available. A recession would likely hurt sales and profits in the short term, but Ulta's long-term growth prospects are very much intact.

With all of that in mind, Ulta could be well-positioned to thrive as inflation continues to cool and interest rates decline. Management appears to believe the stock is a bargain and spent nearly $1 billion on buybacks in 2025.

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4. Walmart

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NASDAQ: WMT

Walmart

Today's Change

(0.40%) $0.49

Current Price

$123.80

Key Data Points

Market Cap

$987B

Day's Range

$121.62 - $124.19

52wk Range

$79.81 - $134.69

Volume

7.8K

Avg Vol

31M

Gross Margin

25.40%

Dividend Yield

0.76%

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Walmart (NYSE:WMT) is a retail business that works in good times and bad. It's always a home for bargain-seekers, but it can do even better in times of inflation and economic weakness, when shoppers are compelled to cut back on spending. In fact, the resilient nature of Walmart's business enabled it to be the top-performing S&P 500 stock during the 2008 financial crisis.

Not only is the business resilient, but Walmart has done a fantastic job of building out its omnichannel platform. Its pickup and delivery options are among the best-run in the industry, and the company's results continue to show impressive growth for a mature company.

In fact, in the latest fiscal quarter, Walmart's revenue grew by nearly 6% year-over-year, led by 27% growth in global e-commerce volume.

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Are retail stocks right for you?

It's always fun to invest in companies you know and love, and retail stocks often fit the bill. Focus on the retailers with the strongest business fundamentals -- low debt levels, healthy cash flows, and strong competitive positions -- to give yourself the best chance to make money for your investment portfolio.

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Investing in retail stocks FAQ

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

TMFMattFrankel

@MattFrankelCFP

Matt Frankel, CFP has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Home Depot, Ulta Beauty, and Walmart. The Motley Fool has a disclosure policy.

How to identify strong retail stocks

Instead of trying to predict the “next big trend,” focus on what consistently separates strong retailers from the rest:

Sales growth: The best retail companies consistently expand the revenue they generate from the products they sell.

Same-store sales: Same-store sales, or comparable-store sales, is a retail-specific revenue metric that evaluates revenue growth for stores in business for at least a year.

Earnings growth: A retailer can grow revenue but remain unprofitable. Investors should be cautious about buying shares in retailers that struggle to increase their earnings as measured by earnings per share.

Seasonality: Many retailers do a large part of their annual business during the holiday season in November and December.

Real estate metrics: If a retailer owns a lot of real estate, its value can comprise a huge portion of the company's overall worth. Investors can also evaluate how efficiently a retail company uses its real estate with metrics such as sales per square foot.

Growth of e-commerce sales: The best retailers use their network of stores to their advantage by offering services such as in-store pickup and local delivery. Retail businesses without a strong online presence will likely have increasing difficulty competing with their peers.

Balance sheet strength: When considering investing in a retailer, look for plenty of cash and manageable debt on its balance sheet.

Strategies for investing in retail stocks

Two approaches tend to work well:

1. Buy businesses with durable advantages.

Focus on retailers that have a durable competitive advantage. For example, Walmart's scale enables it to source products more cost-effectively than its competitors and offer bargains that even e-commerce giants often struggle to match.

Beyond the companies on the list, look for cost advantages, products that don't depend on short-term consumer preferences, and products that people will still buy even if the economy weakens.

2. Build positions over time.

It can be wise to build positions in retail stocks over time, rather than buying all at once. Retail stocks (especially smaller and fast-growing retailers) can be rather volatile over short periods, so by averaging into a position, you can ensure you'll have a mathematically favorable average share price.

Best Retail Stocks to Buy in 2026: Are They Right for Your Portfolio?

Key Points

1. Amazon

Key Data Points

2. Home Depot

Key Data Points

3. Ulta Beauty

Key Data Points

4. Walmart

Key Data Points

Are retail stocks right for you?

Related investing topics

9 Best Investments for 2026

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

Artificial Intelligence: How AI Is Changing the Retail Industry

Investing in retail stocks FAQ

Should I invest in physical stores or e-commerce retail stocks?

Should I invest in physical stores or e-commerce retail stocks?

What are the retail stocks with the highest dividends?

What are the retail stocks with the highest dividends?

What is the best retail stock?

What is the best retail stock?

What is a publicly traded retailer?

What is a publicly traded retailer?

Is investing in retail good?

Is investing in retail good?

About the Author

Stocks Mentioned

Our Guides

Premium Investing Services

Investing in retail stocks FAQ

Should I invest in physical stores or e-commerce retail stocks?

Should I invest in physical stores or e-commerce retail stocks?

What are the retail stocks with the highest dividends?

What are the retail stocks with the highest dividends?

What is the best retail stock?

What is the best retail stock?

What is a publicly traded retailer?

What is a publicly traded retailer?

Is investing in retail good?

Is investing in retail good?

9 Best Investments for 2026

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

Artificial Intelligence: How AI Is Changing the Retail Industry

Key Data Points

Top retail stocks to consider

1. Amazon

2. Home Depot

3. Ulta Beauty

4. Walmart

Risks you should be aware of

How to identify strong retail stocks

Strategies for investing in retail stocks

1. Buy businesses with durable advantages.

2. Build positions over time.

Are retail stocks right for you?

Related investing topics

FAQ

Key Data Points

Key Data Points

Key Data Points