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 $389 billion in February 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.

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

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

By Jeremy Bowman – Updated Feb 12, 2026 at 5:20 PM EST | Fact-checked by Frank Bass

Key Points

Consumer discretionary stocks thrive in strong economies but struggle during downturns.
Top brands in this sector often rebound well from recessions due to strong brand equity.
Investing focuses on well-known companies like Nike and Disney for long-term growth.

When it comes to shopping, there are things you need and things that are just nice to have. The consumer discretionary sector is in that second category. It includes goods and services that people spend money on when they have a little extra cash available, such as travel, dining at restaurants, or fashion and jewelry.

Consumer discretionary stocks refer to the stocks of companies that make money from consumer discretionary goods. They could be manufacturers, wholesalers, or retailers.

Unlike consumer staples companies, which make necessities, consumer discretionary stocks tend to do well when the economy is strong and poorly when times are tough. Keep reading to learn about the consumer discretionary sector and some top stocks to consider.

Best consumer discretionary stocks in 2026

Several consumer discretionary companies stand out as being among the best in their industries:

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Ticker Information Table
Name and ticker	Market cap	Industry
Nike (NYSE:NKE)	$62.0 billion	Textiles, Apparel and Luxury Goods
Starbucks (NASDAQ:SBUX)	$121.7 billion	Hotels, Restaurants and Leisure
McDonald's (NYSE:MCD)	$196.4 billion	Hotels, Restaurants and Leisure
TJX Companies (NYSE:TJX)	$163.2 billion	Specialty Retail
Walt Disney (NYSE:DIS)	$178.4 billion	Entertainment

Data as of May 18, 2026. Showing 5 of 5 tickers.

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1. Nike

NYSE: NKE

Nike

Today's Change

(-0.33%) $-0.14

Current Price

$41.88

Key Data Points

Market Cap

$62B

Day's Range

$41.84 - $42.77

52wk Range

$41.70 - $80.17

Volume

26M

Avg Vol

21M

Gross Margin

40.57%

Dividend Yield

3.87%

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Nike (NKE -0.33%) 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 around 30%, puts it well ahead of competitors like Adidas (ADDYY -0.70%) and Asics (ASCCF +0.00%). 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 +1.14%) and Deckers Outdoor's (DECK -1.49%) 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.

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 Nike should recover from its recent woes.

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2. Starbucks

NASDAQ: SBUX

Starbucks

Today's Change

(0.98%) $1.03

Current Price

$106.81

Key Data Points

Market Cap

$122B

Day's Range

$105.00 - $107.88

52wk Range

$77.99 - $108.88

Volume

6.5M

Avg Vol

7.7M

Gross Margin

15.85%

Dividend Yield

2.88%

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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 +0.98%) 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 +1.75%), to be its new CEO. Niccol has brought the company's focus back to quality coffee, in-store operations and customer service, hoping to reestablish the company's reputation as a desirable "third place" away from home and work.

As of late 2025, the company had 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

Today's Change

(0.52%) $1.42

Current Price

$276.39

Key Data Points

Market Cap

$196B

Day's Range

$275.02 - $277.50

52wk Range

$271.98 - $341.75

Volume

3.9M

Avg Vol

3.5M

Gross Margin

57.31%

Dividend Yield

2.63%

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McDonald's (MCD +0.52%) 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.

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 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. With a payout ratio of around 60% of earnings, McDonald's can comfortably maintain its dividend.

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4. TJX Companies

NYSE: TJX

TJX Companies

Today's Change

(0.05%) $0.08

Current Price

$147.43

Key Data Points

Market Cap

$163B

Day's Range

$147.10 - $148.37

52wk Range

$119.84 - $165.82

Volume

Avg Vol

4.8M

Gross Margin

31.10%

Dividend Yield

1.48%

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Off-price retail giant TJX Companies (TJX +0.05%) 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 5,100 today.

TJX is also one of the rare discretionary retailers that delivered solid growth in 2024, helped by its off-price model. Revenue rose 4% to $56.4 billion in 2024, or 6% when adjusted for the extra week in 2023, and earnings per share jumped 10% to $4.26, or 12% when adjusted for the calendar shift, demonstrating the versatility and strength of the company's business model. Its growth has continued into 2025.

5. Walt Disney

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NYSE: DIS

Walt Disney

Today's Change

(-2.56%) $-2.70

Current Price

$102.72

Key Data Points

Market Cap

$178B

Day's Range

$102.30 - $105.42

52wk Range

$92.19 - $124.69

Volume

9.3M

Avg Vol

9.9M

Gross Margin

31.63%

Dividend Yield

1.22%

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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 -2.56%) 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.

Disney has 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 plans to launch the streaming version of the flagship ESPN network, called ESPN Unlimited, in the fall of 2025, and that could help drive significant profit growth.

Consumer discretionary stocks vs consumer staples stocks

First, let's review some of the key differences between consumer staples and consumer discretionary stocks.

Discretionary stocks sell wants, while staples sell needs
Discretionary stocks tend to be more sensitive to the economic cycle, while consumer staples stocks are more recession-resistant.
Both stocks pay dividends, but dividend investors generally favor consumer staples stocks.
Consumer discretionary stocks tend to outperform in bull markets, while consumer staples typically do better in bear markets.

Strategies for investing in consumer discretionary stocks

Investing in consumer discretionary stocks is similar to any other stock market sector, but there are some special qualities to look for.

Brand: Brand is a key distinguishing factor in the consumer discretionary sector, and many of the stocks that have historically performed well have strong brands. Consider the strength of the brand name when investing in this sector.

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FAQ

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: short March 2026 $42.50 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

Best consumer discretionary stocks in 2026

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

Consumer discretionary stocks vs consumer staples stocks

Strategies for investing in consumer discretionary stocks

Related investing topics

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Best Automotive Stocks for 2026 and How to Invest

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Top Agriculture Stocks for 2026 and How to Invest

FAQ

FAQ: Consumer discretionary stocks

What stocks are considered consumer discretionary?

What stocks are considered consumer discretionary?

When do consumer discretionary stocks perform well?

When do consumer discretionary stocks perform well?

Is Tesla a consumer discretionary stock?

Is Tesla a consumer discretionary stock?

What ETF is consumer discretionary?

What ETF is consumer discretionary?

Do consumer discretionary stocks pay dividends?

Do consumer discretionary stocks pay dividends?

What is the largest company in the consumer discretionary sector?

What is the largest company in the consumer discretionary sector?

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

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

About the Author

Read Next

Stocks Mentioned

Premium Investing Services

Best consumer discretionary stocks in 2026

Key Data Points

Key Data Points

3. McDonald's

Key Data Points

Key Data Points

5. Walt Disney

Key Data Points

Best Stocks to Buy in May 2026

Best Automotive Stocks for 2026 and How to Invest

What Are the 11 Stock Market Sectors?

Top Agriculture Stocks for 2026 and How to Invest

FAQ: Consumer discretionary stocks

What stocks are considered consumer discretionary?

What stocks are considered consumer discretionary?

When do consumer discretionary stocks perform well?

When do consumer discretionary stocks perform well?

Is Tesla a consumer discretionary stock?

Is Tesla a consumer discretionary stock?

What ETF is consumer discretionary?

What ETF is consumer discretionary?

Do consumer discretionary stocks pay dividends?

Do consumer discretionary stocks pay dividends?

What is the largest company in the consumer discretionary sector?

What is the largest company in the consumer discretionary sector?

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

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

Consumer discretionary stocks vs consumer staples stocks

Strategies for investing in consumer discretionary stocks

Pros and cons of investing in consumer discretionary stocks

Factors to consider when choosing consumer discretionary stocks

How to invest in consumer discretionary stocks