It’s an old saying, but it’s especially true in today’s economy: the rich keep getting richer. As the capital markets recover at rates that far exceed the recovery of the real underlying economy, the more affluent among us are feeling much better than they did just a few years ago.
A new report from a major consulting firm has some startling findings about exactly how well the well-off are doing. Since there’s always a bull market somewhere, perhaps it’s a useful exercise to hunt for stocks that should benefit from the tried-and-true trend of the rich getting richer.
Where will the wealthy spend?
As reported by CNBC, the Boston Consulting Global Wealth group found that the wealthiest 1% now control 39% of the world’s wealth, or slightly less than $53 trillion in total.
Interestingly, this trend is not expected to slow down anytime soon. The wealth of the wealthy is in fact growing faster than overall global wealth. The number of millionaires around the globe surged 10% last year, and the researchers predict that over the next five years, millionaires will see their wealth grow at twice the rate of overall global wealth.
Therefore, a key takeaway from the study is that the wealthy have a lot of money to spend, and are feeling better about their financial pictures. Consequently, it seems entirely reasonable for high-end brands to excel going forward.
Indeed, we have seen a slate of sales figures from high-end retailers that confirm just that. For instance, high-end apparel maker Michael Kors Holdings Ltd (NYSE:KORS) recently announced its fourth-quarter sales surged 57% from the same period in 2012. Moreover, the company’s full-year 2012 results were equally impressive, racking up 67.5% sales growth and diluted earnings per share more than doubled during the year.
Luxury jeweler Tiffany & Co. (NYSE:TIF) is also reporting better numbers. Tiffany recently reported first-quarter worldwide sales increased 9%, or 13% on a constant-currency basis. Furthermore, the company only a couple weeks ago gave shareholders a dividend increase, reflecting management’s belief in the company’s financial standing.
Tiffany & Co. (NYSE:TIF) bumped up its shareholder payout by 6%, and the company has now come through with 12 dividend increases in the past 11 years.
Not to be outdone, natural and organic supermarket chain Whole Foods Market, Inc. (NASDAQ:WFM) is also a haven for well-to-do consumers, and had nothing but great things to say in its own recent financial results. The company reported second-quarter total sales increased 13% and the company produced a record operating margin.
In addition, Whole Foods Market, Inc. (NASDAQ:WFM) raised its full-year outlook and expects sales growth of 12% to 14% and diluted earnings per share growth of 15% to 17% for 2013.
If you can’t beat ‘em, join ‘em
Tiffany, Whole Foods Market, Inc. (NASDAQ:WFM), and Michael Kors Holdings Ltd (NYSE:KORS) are all stocks that cater to the higher-end consumer. Wealthy consumers are feeling much better now than they have at any point since the Great Recession, due to a combination of factors including the recovering housing and stock markets.
Affluent consumers who feel more confident about their financial futures will likely be more inclined to loosen their purse strings. As a result, these stocks should profit handsomely from renewed spending by the wealthy. To that end, these stocks are already showing signs of this through their impressive recent sales figures.
While not everyone has the financial flexibility to shop at these stores regularly, all investors have the opportunity to profit from the reemergence of the affluent consumer. For those of you interested in capitalizing on the rich getting richer, consider these stocks.
Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends Whole Foods Market, Inc. (NASDAQ:WFM). The Motley Fool owns shares of Whole Foods Market. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article The Rich Get Richer, and These Stocks Will Benefit originally appeared on Fool.com and is written by Robert Ciura.
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