Dollar Tree, Inc. (NASDAQ:DLTR) is down 13% this year which is a bit worse than how S&P 500 has done thus far as it’s down around 11%.
Although it’s a retail stock and thus can be a bit risky, the dollar store chain may be one of the safer investments out there right now. With a recession likely already underway, there may be a growing need for consumers to trim their budgets however they can.
And buying from a discount retailer like Dollar Tree may be a way to do just that. From food to household products, Dollar Tree has many essentials that consumers can stock up on at cheaper prices than big-box retailers.
And in March, the company did see a surge in traffic. In an update related to the coronavirus pandemic, the company stated that "stores began to experience a material pick-up in store traffic and sales related to essential products."
Although the company has modified store hours to accommodate for "enhanced cleaning protocols," it’s also hiring 25,000 staff for its stores and distribution centers.
Shares of Dollar Tree closed below $82 on Friday as the stock has rebounded since falling to $60 back in March. And given the wild swings that we’ve seen on the markets this year, it wouldn’t be surprising if Dollar Tree could once again dip below $70 at some point this year.
If that happens, investors could be getting a bargain for a stock that looks like it could be one of the few to do well even amid the coronavirus pandemic.
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