What stocks are considered consumer discretionary?

Consumer discretionary stocks are stocks of companies that sell goods and services consumers want but don't need. This includes travel, entertainment, apparel, electronics, and furniture, among other categories.

When do consumer discretionary stocks perform well?

Consumer discretionary stocks tend to perform well in bull markets and expanding economies, particularly when consumer confidence is high.

Is Tesla a consumer discretionary stock?

Tesla (NASDAQ: TSLA) is considered a consumer discretionary stock, but it can also be classified as an industrial stock. Cars are a discretionary good, so the company has exposure to the same factors that other consumer discretionary stocks do.

What ETF is consumer discretionary?

One well-known consumer discretionary exchange-traded fund (ETF) is the Consumer Discretionary Select SPDR Fund (NYSEMKT: XLY), whose top three holdings include Amazon (NASDAQ: AMZN), Tesla, and Home Depot (NYSE: HD).

Do consumer discretionary stocks pay dividends?

Yes, many consumer discretionary stocks pay dividends, especially the more established companies.

What is the largest company in the consumer discretionary sector?

While there is some discrepancy over which stocks are consumer discretionary, the most valuable company that clearly fits into that category is Home Depot, the home improvement retailer, which was worth $337 billion in August 2026.

Are consumer discretionary stocks more growth-oriented than value-oriented?

Consumer discretionary stocks don't necessarily skew toward growth or value. It depends on the company and the stage of its growth cycle. You can find both growth and value stocks within the consumer discretionary sector.

Bars

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

By Jeremy Bowman – Updated Aug 14, 2026 at 11:40 PM EST | Fact-checked by Frank Bass

Key Points

Consumer discretionary stocks thrive in robust economies but falter during downturns.
Top stocks in this sector for 2026 include Nike, Starbucks, and McDonald's, each leading in its industry.
Investing in these stocks involves buying shares through a brokerage, focusing on long-term growth.

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Ticker Information Table
Name and ticker	Current price	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.	Industry
Nike (NYSE:NKE)	$38.34	$57.9 billion	Textiles, Apparel and Luxury Goods
Starbucks (NASDAQ:SBUX)	$105.61	$121.1 billion	Hotels, Restaurants and Leisure
McDonald's (NYSE:MCD)	$261.59	$186.5 billion	Hotels, Restaurants and Leisure
TJX Companies (NYSE:TJX)	$134.12	$147.9 billion	Specialty Retail
Walt Disney (NYSE:DIS)	$107.29	$185.7 billion	Entertainment

Data as of Sep 1, 2026. Showing 5 of 5 total entries.

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1. Nike

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NYSE: NKE

Nike

Premium Feature

Moneyball Superscore

54/100

Today's Change

(-0.80%) $-0.31

Current Price

$38.34

Key Data Points

Market Cap

$58B

Day's Range

$38.10 - $38.56

52wk Range

$38.10 - $76.97

Volume

8.5M

Avg Vol

24.8M

Gross Margin

43.14%

Dividend Yield

4.17%

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Nike (NKE -0.76%) has established a dominant position in athletic footwear and apparel, with over half a century of innovation in creating sportswear that appeals to a broad consumer audience. The strength of Nike's business model stems from its product innovation, marketing strength, use of endorsements, and tying the success of high-profile athletes to the company's products.

The company has a long history of outperforming the S&P 500, despite more recent challenges. Long after Michael Jordan left the professional basketball court, Air Jordan shoes remain a mainstay of Nike's business.

Nike's market share of athletic footwear, estimated at 20%-30%, puts it well ahead of competitors like Adidas (ADDYY -1.04%) and Asics (ASCCF -0.76%). With the global sportswear company working to play a bigger role in fast-growing areas such as China, Nike still has a lot of potential for growth.

Recently, Nike has struggled with upstart competition, such as On Holding (ONON -1.79%) and Deckers Outdoors' (DECK -2.20%) Hoka brand. The company also seems to have leaned too heavily on digital and direct channels, overlooking its established wholesale relationships with key partners like Foot Locker, now owned by Dick's Sporting Goods, and new CEO Elliott Hill is trying to fix that and is having incremental success.

Nike has built a strong digital ecosystem around apps such as SNKRS and the Nike Training Club. However, its revenue declined in fiscal 2025 and is expected to be nearly flat in fiscal 2026.

Despite those challenges, it's hard to bet against a company that has led its industry for so many decades. It may take time for the turnaround strategy under Hill to play out, but with an unmatched roster of sponsors and a long history of successful branding and innovation, Nike should recover from its recent woes.

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2. Starbucks

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NASDAQ: SBUX

Starbucks

Premium Feature

Moneyball Superscore

67/100

Today's Change

(-0.60%) $-0.64

Current Price

$105.61

Key Data Points

Market Cap

$121B

Day's Range

$105.58 - $107.18

52wk Range

$77.99 - $110.51

Volume

1.2M

Avg Vol

7.4M

Gross Margin

16.53%

Dividend Yield

2.33%

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The coffee company plays a significant role in how a large part of the world's population begins their day. By introducing the European cafe concept to the U.S., Starbucks (SBUX -0.60%) tapped into consumers' desire to treat themselves to affordable luxuries, and its premium beverages now have a loyal following around much of the world.

Starbucks appears to be on the mend after struggling over the last few years with competitors taking market share in China, and weak consumer demand in the U.S.

In August 2024, the company hired Brian Niccol, who led the turnaround at Chipotle (CMG -0.47%), to be its new CEO. Niccol has brought the company's focus back to quality coffee, in-store operations and customer service, under his "Back to Starbucks" plan, aiming to reestablish the company's reputation as a desirable "third place" away from home and work.

As of mid-2026, those efforts were paying off with strong comparable sales and operating profit returning to growth. The company now has more than 40,000 locations across the globe, and it expects to have 55,000 locations by 2030, indicating no shortage of growth opportunities. Beyond its cafes, the company also has a healthy business selling in-store products, such as bagged coffee and ready-to-drink beverages.

3. McDonald's

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NYSE: MCD

McDonald's

Premium Feature

Moneyball Superscore

58/100

Today's Change

(-0.03%) $-0.09

Current Price

$261.59

Key Data Points

Market Cap

$186B

Day's Range

$260.74 - $264.50

52wk Range

$259.85 - $341.75

Volume

1.5M

Avg Vol

4.6M

Gross Margin

57.38%

Dividend Yield

2.79%

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McDonald's (MCD -0.05%) has come a long way since its beginnings in the mid-20th century, and the fast-food colossus has worked hard to keep up with the times. Innovations such as digital menus that automatically change throughout the day, automated kiosks for ordering, online and mobile order capabilities, and delivery options are making McDonald's more accessible than ever.

At the same time, the restaurant chain continues to emphasize value, which keeps customers coming back for more. In 2025, it introduced a new McValue menu with a $5 meal deal and a "Buy One, Add One for $1" option. More recently, it's added an "Under $3 Menu."

Although it's a restaurant chain, the emphasis on value gives it some elements of a consumer staples company. After all, everybody needs to eat, and getting a cheap and convenient meal at McDonald's is an easy option.

The company also owns much of the real estate occupied by its franchised restaurants. This enables it to collect rent while franchisees do the hard work of running the restaurants.

Even in the ever-changing restaurant industry, McDonald's has found a way to stay relevant, and it's returned to comparable sales growth thanks in part to its renewed focus on value. Investors also like McDonald's for its consistent dividend payments. It has increased payments to shareholders each year since the mid-1970s, making the company a Dividend King, or a company that's raised its dividend for at least 50 years in a row. With a payout ratio of around 60% of earnings, McDonald's can comfortably maintain its dividend.

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4. TJX Companies

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NYSE: TJX

TJX Companies

Premium Feature

Moneyball Superscore

73/100

Today's Change

(0.16%) $0.21

Current Price

$134.12

Key Data Points

Market Cap

$148B

Day's Range

$133.04 - $134.68

52wk Range

$133.04 - $170.00

Volume

2.1M

Avg Vol

6.1M

Gross Margin

31.87%

Dividend Yield

1.35%

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Off-price retail giant TJX Companies (TJX +0.20%) has found success in apparel and home goods with a business model that's not easily replicated online. The parent company of TJ Maxx, Marshalls, and HomeGoods obtains discounted brand-name merchandise through close-out sales, manufacturer errors, and order cancellations. It then sells the merchandise at discounts of 20% to 60%.

The company's business has generated wide profit margins and solid growth over the years. It plans to expand to at least 7,000 stores globally, up from about 5,200 today.

TJX is also one of the rare discretionary retailers that has delivered solid growth in recent years, helped by its off-price model. Comparable sales rose 5% in fiscal 2026, which ended in Jan. 2026, with revenue up 7% to $60.4 billion, and continued to grow in the first quarter. Earnings per share jumped 14% to $4.87, demonstrating the versatility and strength of the company's business model. It also raised its quarterly dividend by 13% in March 2026.

5. Walt Disney

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NYSE: DIS

Walt Disney

Premium Feature

Moneyball Superscore

73/100

Today's Change

(-0.24%) $-0.26

Current Price

$107.29

Key Data Points

Market Cap

$186B

Day's Range

$106.91 - $108.95

52wk Range

$92.19 - $119.78

Volume

Avg Vol

10.5M

Gross Margin

32.19%

Dividend Yield

1.39%

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This household name in family entertainment has been a staple of U.S. pop culture for generations. Walt Disney's (DIS -0.35%) theme parks and animated movies are popular everywhere. Today, the company also owns ABC, ESPN, Pixar, Marvel, Star Wars, and Hulu, and it acquired a vast array of assets from Fox in a 2019 deal.

Disney has a number of competitive strengths, including an unrivaled trove of intellectual property and a business model that enables successful movies, such as Frozen, to be spun into multiple business lines, including theme park rides, toys, consumer products, and even live entertainment.

It's restructured its entertainment business to make Disney+ its centerpiece, and its streaming business is finally profitable. The stock has underperformed for several years now, but the components are in place for success if it can successfully transition to streaming. The company has launched streaming version of the flagship ESPN network, putting in place the final piece of its streaming strategy.

How to invest in consumer discretionary stocks

Investing in consumer discretionary stocks is just like buying any other stock. Here's what you have to do:

Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at [our favorite brokers and trading platforms to find the right one for you.
Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Benefits and risks of investing in consumer discretionary stocks

Like any other sector, investing in consumer discretionary stocks has its pros and cons.

Benefits:

Consumer discretionary stocks are made up of brands that are familiar to most investors.
They can be big winners over time.
It can be easy to assess their performance.
They tend to do well in bull markets.
Competitive advantage is often related to brand strength.

Risks:

They are among the first businesses to get hit in a recession.
They are at risk of black-swan events like the COVID-19 pandemic.
Competition in the industry tends to be high.
Inflation is a risk.

Methodology: How these stocks were chosen

All five of these stocks have a long track record of delivering growth and have established competitive advantages in their respective subsectors. They are also all considered industry leaders in the categories they compete in.

While some have struggled in recent years, like Nike and Disney, they still retain the qualities that have made them such strong companies over their history, which puts them in a position to be winners again.

The Motley Fool advocates holding stocks for at least five years, and all of these are in a position to deliver solid returns over periods of five years or longer.

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FAQ: Consumer discretionary stocks

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

TMFHobo

@TMFBowman

Jeremy Bowman has positions in Chipotle Mexican Grill, Nike, Starbucks, and Walt Disney. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Deckers Outdoor, Nike, On Holding, Starbucks, TJX Companies, and Walt Disney. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's, short January 2028 $340 calls on McDonald's, and short September 2026 $35 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

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

Key Points

1. Nike

Key Data Points

2. Starbucks

Key Data Points

3. McDonald's

Key Data Points

4. TJX Companies

Key Data Points

5. Walt Disney

Key Data Points

How to invest in consumer discretionary stocks

Benefits and risks of investing in consumer discretionary stocks

Methodology: How these stocks were chosen

Related investing topics

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FAQ: Consumer discretionary stocks

What stocks are considered consumer discretionary?

When do consumer discretionary stocks perform well?

Is Tesla a consumer discretionary stock?

What ETF is consumer discretionary?

Do consumer discretionary stocks pay dividends?

What is the largest company in the consumer discretionary sector?

Are consumer discretionary stocks more growth-oriented than value-oriented?

1. Nike

2. Starbucks

4. TJX Companies

Benefits and risks of investing in consumer discretionary stocks

Methodology: How these stocks were chosen

Related investing topics

Best consumer discretionary stocks in 2026

Key Data Points

3. McDonald's

5. Walt Disney

How to invest in consumer discretionary stocks

Key Data Points

Key Data Points

Key Data Points

Key Data Points