Unwrap These 3 Dividend Stocks for the Holidays

As all eyes are now focused on the holiday shopping season, several forecasts are calling for a year-over-year increase in U.S. consumer spending in November and December 2019. That's good news for dividend-focused investors in retail stocks. Let's look at what's expected this year: Holiday retail sales during the two months that include Black Friday, Cyber Monday and Christmas are expected to increase between 3.8%-4.2% compared to the same period in 2018, according to the National Retail Federation. As a point of context, over the last five years, holiday sales have on average increased 3.7%, according to the federation. In line with this forecast, eMarketer predicts total U.S. retail sales will climb 3.8% to $1.008 trillion, making it the first trillion-dollar holiday season so far in history, while U.S. e-commerce spending grows 13.2% to $135.35 billion. Furthermore, U.S. online sales alone are expected to increase 14.1% during this holiday shopping season, according to Adobe Analytics. Total retail spending -- both online and offline -- is predicted to increase 4% compared to 2018. As in the past, I've taken a number of mall walks during the holiday shopping season, and I can share that already Costco Wholesale , Target and others have embraced the season. In some respects, they have to get an early jump on this year, given that we have only 26 shopping days between Thanksgiving and Christmas. I see three main companies that dividend-focused investors can benefit this holiday season. But first let's look at the larger field. Digging into the list of Dividend Aristocrats, we find a number of companies that are likely to see a lift to their business this holiday season. Remember, the Aristocrats are those companies that have boosted their dividends consecutively for at least 25 years. The short list of Aristocrats includes Target , VF Corp. , and McCormick & Co. . If we expand the scope to include the Dividend Achievers -- the companies that have boosted their dividends over the last 10-plus consecutive years -- we can add Best Buy , Costco, Nike , Ross Stores , Tiffany & Co. and Walmart to the list. Odds are that each of those companies will see their respective businesses benefit from the 2019 holiday shopping season. But if I had to narrow the group down to three that have the best business prospects and the best dividend yields as the holiday shopping season heats up, it would be Best Buy and its 2.6% dividend yield, followed by the near-2.3% dividend yield found with shares of both Target and VF Corp. Don't get me wrong, I think both Costco and Ross Stores as well as Walmart will do well again this year, it's just that dividend investors are likely to be nonplussed by the current 0.8% yield to be had with COST shares following their spectacular run year to date. The same can be said for the near 0.9% had with ROST shares. And as far as Tiffany & Co. shares go, their recent takeover-related pop offers a 1.8% yield, which is about the same as the current yield on Walmart shares -- pretty much in line with the S&P 500. In other words, not all that exciting. One other thing to consider, as we near the end of 2019: We will start to learn about fresh dividend increases from the Dividend Kings, Aristocrats and Achievers. Those increases not only offer a step up in yield, but they tend to drive share prices higher as well.

Unwrap These 3 Dividend Stocks for the Holidays

As forecasts for a hot shopping season roll in, here are the retailers most likely to benefit this year.

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