FORTUNE 500 and our 2011 ranking & top companies hiring

©John  Coughlin/CNNMoney


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J.P. Morgan Chase & Co.



Fortune 500 rank: 13

Current openings: 15,550



What are you looking for?



The banking giant currently has 15,500 positions open globally, 12,000 of them in the U.S. Here, most openings are in retail banking, including positions for personal bankers, financial advisors, business bankers, loan officers, as well as branch managers, assistant branch managers, and tellers. The company also seeks qualified collectors, customer service agents, and operations managers.





More from CNNMoney.com:



• 2011 Fortune 500



• America's Top Tweeters



• If Fortune 500 Were a Country





Any secrets to impressing your recruiter?



"JPMorgan Chase values applicants with a positive attitude, flexibility and proven relevant success both on the resume and by example during the interview process. These factors will always impress a recruiter."



J.P. Morgan Chase & Co.'s job listings







Courtesy: Best Buy





Best Buy



Fortune 500 rank: 47

Current openings: 13,919



What are you looking for?



Retail associates, assistant store managers, and general manager positions for Best Buy and Best Buy Mobile locations. Counter Intelligence Agents for Geek Squad, field leadership and corporate positions.



Any secrets to impressing your recruiter?



"Candidates impress us when they show insight (understanding customers, company, financial impact) and self-awareness (personal brand, how they are perceived by others, how customers see them). The ability to anticipate a conversation's direction, and the ability to quickly assess customer needs are big. Best Buy recruiters look for critical thinking, self-awareness and fierce devotion to customer service."



Best Buy's job listings







Courtesy: General Electric





General Electric



Fortune 500 rank: 6

Current openings: 8,320



What are you looking for?



GE hires a wide range of experts in a variety of fields, including engineering, finance, human resources, information technology, manufacturing, marketing, and sales.



Any secrets to impressing your recruiter?



"We look for candidates who focus on the customer, are clear thinkers, generate new and creative ideas, value teamwork, and are experts in their field."



General Electric's job listings







Courtesy: IBM





IBM



Fortune 500 rank: 18

Current openings: 8,320



What are you looking for?



Consulting and services, hardware engineering, finance and accounting, IT and telecommuncations, HR, legal, manufacturing.



IBM's job listings











Courtesy: HP





Hewlett-Packard



Fortune 500 rank: 11

Current openings: 6,583



What are you looking for?



HP has positions available across all functions for entry-level and experienced talent. Some key openings are in administration, business planning,engineering, finance, human resources, information technology, legal, public affairs and communications, quality, sales, services, supply chain and operations.



Any secrets to impressing your recruiter?



"Strong candidates demonstrate a focus on customers, results and performance, business acumen and leadership capabilities. Energetic, passionate and team-oriented individuals integrate well with HP's collaborative culture and values. Our selection process is an iterative one, we get to know the candidates, but also ensure they get to know our world-class organization. Let recruiters see the candidate beyond their resume -- having a creative and authentic voice is a plus."



HP's job listings







Courtesy: Target





Target



Fortune 500 rank: 33

Current openings: 6,300



What are you looking for?



This year, the retailer will hire approximately 6,300 leaders and team members and more than 1,400 interns at its corporate locations. It plans to create thousands of jobs in stores and distribution centers. At corporate headquarters, positions are available in merchandising, web development for Target.com, and the company is seeking engineers in technology services, product design and development, and marketing. Other available jobs include team leaders, guest service team members, pharmacists, nurse practitioners and medical assistants for its Target Pharmacy and Target Clinic locations.



Any secrets to impressing your recruiter?



"We look for individuals who can collaboratively lead teams and deliver results. Give us examples of your ability to work in a team or group and take on leadership roles. Tell us how you can contribute to our fun and friendly atmosphere while providing great guest service."



Target's job listings







Courtesy: Microsoft





Microsoft



Fortune 500 rank: 38

Current openings: 6,000



What are you looking for?



A variety of professions, including engineering, sales and marketing, customer service and support, and general business operations.



Any secrets to impressing your recruiter?



"Show us your expertise and interests beyond your resume. Creative projects like blogging and developing mobile applications grow your skills as well as help employers find you. It's harder for us to get to know you if you only excel in a closed environment. Likewise, get to know us. Learn about our technologies and businesses before you apply. This research will help you identify the best jobs for your skills, prepare for your interviews, and show us you're excited and ready to work here."



Microsoft's job listings







Courtesy: Dell





Dell



Fortune 500 rank: 41

Current openings: 4,887



What are you looking for?



Networking specialists, IT information developers, web developers, engineers, software developers, sales consultants, business development specialists, many others.



Any secrets to impressing your recruiter?



"Dell is interested in hiring people who are action oriented, have a demonstrated ability to achieve results and are customer focused. As Dell plans to expand its enterprise solutions, software and services offerings inthe next couple years, it's looking for innovative thought leaders and skilled technologists across a range of disciplines, and who have global perspectives regarding business, social and cultural trends."



Dell's job listings







Courtesy: Bank of America





Bank of America



Fortune 500 rank: 9

Current openings: 4,720



What are you looking for?



Constantly looking for new talent, the bank currently has thousands of open positions in locations throughout the world. Available positions include jobs in consumer banking, commercial banking, technology and operations, investment banking and finance.



Any secrets to impressing your recruiter?



"Know the types of positions you are most qualified for and interested in. Be focused in your approach to demonstrate you can match your experience and skills to the organizational requirements. Be able to demonstrate that you've done research on the company, its businesses and the roles you would be most qualified for. Show initiative and desire; demonstrate that you are interested in joining the organization by attending the company's events and meeting its recruiters and leaders. Prepare questions: the right questions demonstrate your interest and understanding of the company and role."



Bank of America's job listings







©John R. Coughlin/CNNMoney





Citigroup



Fortune 500 rank: 14

Current openings: 3,560



What are you looking for?



Banking, credit specialists, lending, IT, analysts

Rank Company Revenues


($ millions) Profits

($ millions)

1 Wal-Mart Stores 421,849.0 16,389.0

2 Exxon Mobil 354,674.0 30,460.0

3 Chevron 196,337.0 19,024.0

4 ConocoPhillips 184,966.0 11,358.0

5 Fannie Mae 153,825.0 -14,014.0

6 General Electric 151,628.0 11,644.0

7 Berkshire Hathaway 136,185.0 12,967.0

8 General Motors 135,592.0 6,172.0

9 Bank of America Corp. 134,194.0 -2,238.0

10 Ford Motor 128,954.0 6,561.0

11 Hewlett-Packard 126,033.0 8,761.0

12 AT&T 124,629.0 19,864.0

13 J.P. Morgan Chase & Co. 115,475.0 17,370.0

14 Citigroup 111,055.0 10,602.0

15 McKesson 108,702.0 1,263.0

16 Verizon Communications 106,565.0 2,549.0

17 American International Group 104,417.0 7,786.0

18 International Business Machines 99,870.0 14,833.0

19 Cardinal Health 98,601.9 642.2

20 Freddie Mac 98,368.0 -14,025.0

21 CVS Caremark 96,413.0 3,427.0

22 UnitedHealth Group 94,155.0 4,634.0

23 Wells Fargo 93,249.0 12,362.0

24 Valero Energy 86,034.0 324.0

25 Kroger 82,189.4 1,116.3

26 Procter & Gamble 79,689.0 12,736.0

27 AmerisourceBergen 77,954.0 636.7

28 Costco Wholesale 77,946.0 1,303.0

29 Marathon Oil 68,413.0 2,568.0

30 Home Depot 67,997.0 3,338.0

31 Pfizer 67,809.0 8,257.0

32 Walgreen 67,420.0 2,091.0

33 Target 67,390.0 2,920.0

34 Medco Health Solutions 65,968.3 1,427.3

35 Apple 65,225.0 14,013.0

36 Boeing 64,306.0 3,307.0

37 State Farm Insurance Cos. 63,176.7 1,762.8

38 Microsoft 62,484.0 18,760.0

39 Archer Daniels Midland 61,682.0 1,930.0

40 Johnson & Johnson 61,587.0 13,334.0

41 Dell 61,494.0 2,635.0

42 WellPoint 58,801.8 2,887.1

43 PepsiCo 57,838.0 6,320.0

44 United Technologies 54,326.0 4,373.0

45 Dow Chemical 53,674.0 2,310.0

46 MetLife 52,717.0 2,790.0

47 Best Buy 49,694.0 1,317.0

48 United Parcel Service 49,545.0 3,488.0

49 Kraft Foods 49,542.0 4,114.0

50 Lowe's 48,815.0 2,010.0

51 INTL FCStone 46,940.3 5.4

52 Lockheed Martin 46,890.0 2,926.0

53 Merck 45,987.0 861.0

54 Goldman Sachs Group 45,967.0 8,354.0

55 Express Scripts 44,989.7 1,181.2

56 Intel 43,623.0 11,464.0

57 Sears Holdings 43,326.0 133.0

58 Caterpillar 42,588.0 2,700.0

59 Chrysler Group 41,946.0 -652.0

60 Safeway 41,050.0 589.8

61 Supervalu 40,597.0 393.0

62 Cisco Systems 40,040.0 7,767.0

63 Morgan Stanley 39,320.0 4,703.0

64 Prudential Financial 38,414.0 3,195.0

65 Walt Disney 38,063.0 3,963.0

66 Comcast 37,937.0 3,635.0

67 Sysco 37,243.5 1,180.0

68 Sunoco 35,453.0 234.0

69 Abbott Laboratories 35,166.7 4,626.2

70 Coca-Cola 35,119.0 11,809.0

71 New York Life Insurance 34,947.2 1,091.5

72 Northrop Grumman 34,757.0 2,053.0

73 FedEx 34,734.0 1,184.0

74 Hess 34,613.0 2,125.0

75 Ingram Micro 34,589.0 318.1

76 Johnson Controls 34,305.0 1,491.0

77 Aetna 34,246.0 1,766.8

78 Amazon.com 34,204.0 1,152.0

79 Humana 33,868.2 1,099.4

80 Enterprise Products Partners 33,739.3 320.8

81 Honeywell International 33,370.0 2,022.0

82 Liberty Mutual Insurance Group 33,193.0 1,678.0

83 News Corp. 32,778.0 2,539.0

84 DuPont 32,733.0 3,031.0

85 Sprint Nextel 32,563.0 -3,465.0

86 General Dynamics 32,466.0 2,624.0

87 TIAA-CREF 32,224.9 1,405.9

88 Delta Air Lines 31,755.0 593.0

89 Allstate 31,400.0 928.0

90 HCA Holdings 30,683.0 1,207.0

91 American Express 30,242.0 4,057.0

92 Google 29,321.0 8,505.0

93 Tyson Foods 28,430.0 780.0

94 Philip Morris International 27,208.0 7,259.0

95 Time Warner 26,888.0 2,578.0

96 Oracle 26,820.0 6,135.0

97 3M 26,662.0 4,085.0

98 Deere 26,004.6 1,865.0

99 Plains All American Pipeline 25,893.0 505.0

100 Rite Aid

Rank Company Revenues


($ millions) Profits

($ millions)

101 Massachusetts Mutual Life Insurance 25,647.1 258.2

102 Publix Super Markets 25,328.1 1,338.1

103 CHS 25,267.9 502.2

104 Raytheon 25,183.0 1,840.0

105 International Paper 25,179.0 644.0

106 Travelers Cos. 25,112.0 3,216.0

107 Macy's 25,003.0 847.0

108 Staples 24,545.1 881.9

109 Tech Data 24,376.0 214.2

110 DirecTV 24,102.0 2,198.0

111 McDonald's 24,074.6 4,946.3

112 Northwestern Mutual 23,384.3 756.3

113 Murphy Oil 23,345.1 798.1

114 United Continental Holdings 23,229.0 253.0

115 Eli Lilly 23,076.0 5,069.5

116 Motorola Solutions 22,823.0 633.0

117 Hartford Financial Services 22,383.0 1,680.0

118 AMR 22,170.0 -471.0

119 TJX 21,942.2 1,343.1

120 Emerson Electric 21,866.0 2,164.0

121 Xerox 21,633.0 606.0

122 Cigna 21,253.0 1,345.0

123 Alcoa 21,013.0 254.0

124 Fluor 20,849.3 357.5

125 Aflac 20,732.0 2,344.0

126 U.S. Bancorp 20,518.0 3,317.0

127 Nationwide 20,265.0 959.0

128 Tesoro 20,253.0 -29.0

129 Occidental Petroleum 19,857.0 4,530.0

130 Kimberly-Clark 19,746.0 1,843.0

131 Bristol-Myers Squibb 19,484.0 3,102.0

132 Avnet 19,160.2 410.4

133 World Fuel Services 19,131.1 146.9

134 Capital One Financial 19,067.0 2,743.0

135 Nike 19,014.0 1,906.7

136 Freeport-McMoRan Copper & Gold 18,982.0 4,336.0

137 Time Warner Cable 18,868.0 1,308.0

138 Manpower 18,866.5 -263.6

139 Goodyear Tire & Rubber 18,832.0 -216.0

140 Arrow Electronics 18,744.7 479.6

141 Exelon 18,644.0 2,563.0

142 Kohl's 18,391.0 1,114.0

143 Whirlpool 18,366.0 619.0

144 Halliburton 17,973.0 1,835.0

145 United Services Automobile Assn. 17,946.1 2,637.4

146 J.C. Penney 17,759.0 389.0

147 Southern 17,456.0 1,975.0

148 United States Steel 17,374.0 -482.0

149 Ally Financial 17,373.0 1,075.0

150 AES 17,138.0 9.0

151 PNC Financial Services Group 17,096.0 3,412.0

152 EMC 17,015.1 1,900.0

153 Union Pacific 16,965.0 2,780.0

154 Altria Group 16,892.0 3,905.0

155 Computer Sciences 16,128.0 817.0

156 Illinois Tool Works 15,870.4 1,527.2

157 Nucor 15,844.6 134.1

158 Medtronic 15,817.0 3,099.0

159 L-3 Communications 15,680.0 955.0

160 Colgate-Palmolive 15,564.0 2,203.0

161 NextEra Energy 15,317.0 1,957.0

162 Dominion Resources 15,264.0 2,808.0

163 Amgen 15,053.0 4,627.0

164 Progressive 14,963.3 1,068.3

165 Bank of New York Mellon Corp. 14,929.0 2,518.0

166 General Mills 14,796.5 1,530.5

167 Gap 14,664.0 1,204.0

168 Loews 14,621.0 1,288.0

169 American Electric Power 14,427.0 1,211.0

170 Baker Hughes 14,414.0 812.0

171 TRW Automotive Holdings 14,383.0 834.0

172 Constellation Energy 14,340.0 -982.6

173 Duke Energy 14,272.0 1,320.0

174 CBS 14,059.8 724.2

175 Texas Instruments 13,966.0 3,228.0

176 Toys "R" Us 13,864.0 168.0

177 PG&E Corp. 13,841.0 1,099.0

178 Eaton 13,715.0 929.0

179 Health Net 13,619.9 204.2

180 Viacom 13,497.0 1,548.0

181 PPG Industries 13,423.0 769.0

182 Jabil Circuit 13,409.4 168.8

183 FirstEnergy 13,339.0 784.0

184 Consolidated Edison 13,325.0 992.0

185 Chubb 13,319.0 2,174.0

186 Cummins 13,226.0 1,040.0

187 Danaher 13,202.6 1,793.0

188 Dollar General 13,035.0 627.9

189 Oneok 13,030.1 334.6

190 Community Health Systems 12,986.5 280.0

191 Sara Lee 12,919.0 506.0

192 Baxter International 12,843.0 1,420.0

193 DISH Network 12,640.7 984.7

194 Aramark 12,571.7 30.7

195 Omnicom Group 12,542.5 827.7

196 Waste Management 12,515.0 953.0

197 AutoNation 12,501.5 226.6

198 Edison International 12,409.0 1,256.0

199 Kellogg 12,397.0 1,247.0

200 ConAgra Foods 12,370
These 27 companies appear on both the FORTUNE 500 and our 2011 ranking of the Best Companies to Work For.


Company Fortune

500 rank 2011 Best to

Work For rank Avg. annual pay in

most common job (professional)

Microsoft 38 72 $120,657

Goldman Sachs Group 54 23 $160,000

Intel 56 51 $106,430

Cisco Systems 62 20 $131,716

American Express 91 49 $112,802

Google 92 4 N.A.

Publix Super Markets 102 86 $73,300

Aflac 125 57 $59,873

United Services Automobile Assn. 145 17 $92,583

General Mills 166 58 $47,453

Marriott International 210 71 $64,750

Qualcomm 222 33 $134,211

Starbucks 229 98 $50,673

Devon Energy 231 41 $172,575

Nordstrom 254 74 $49,500

Chesapeake Energy 263 32 $114,084

Whole Foods Market 273 24 $72,372

CarMax 311 81 $65,541

Stryker 323 68 $74,343

W.W. Grainger 328 100 $73,446

Darden Restaurants 332 97 $59,982

EOG Resources 377 66 $158,008

Mattel 392 69 N.A.

CH2M Hill 422 90 $129,986

Booz Allen Hamilton Holding 438 85 $112,728

J.M. Smucker 482 93 $51,075

NuStar Energy 497

Back To School Stocks that are A+ ... ( Target, Bed Bath and Beyond,Starbucks Corp. (SBUX), Apple and Office Max, Chipotle Mexican Grill, Inc. (CMG))

  Target Inc. (NYSE: TGT - News), Bed Bath and Beyond (NasdaqGS: BBBY - News), Apple Inc. (NasdaqGS: AAPL - News)and Office Max (NYSE: OMX - News)Chipotle Mexican Grill, Inc. (CMG)) .


A+ Stocks for Back to School

 Ya, it's a bummer kid, but here's the up side; it's time for Mom and Dad to spend a little money on you ! And college kids going back to school ready to hit the books and party w/ there friends at Starbucks & Chipotle Grill .



Time For Some New Gear



Make sure you communicate to your parents that your list of necessities is both long and distinguished. You gotta get some new shirts, couple pairs of pants, definitely a new pair of shoes. Oh ya, don't forget the books, there's going to be studying involved in this process too; you're probably going to need some notebooks, a calculator, a couple packs of pens, maybe a new backpack.



When you add it all up we are talking about a serious outlay, where a middle-class family can easily spend $500 a piece on Timmy and Suzy to make sure they go back to school in style. Throw a laptop in there anywhere and tack on another $800 to $1000. So as you can see, this game of back to school is serious business for the retailers, and after we take a look at the numbers, it's easy to see why.



Back to School Is Serious Business Back to school is the second largest revenue pull for the sector, right behind the almighty holidays, with revenue this year expected to top $55 billion, a 16% increase from 2009. But even though sales volumes are expected to rise, the competition will be fierce as the group continues to battle a weak consumer, the top end of a margin cycle and each other with some very highly publicized pricing wars between a number of big-name players. So with that in mind, here are four retailers that look well positioned to cash in on the annual spending bonanza known as "Back to School."



4 Back to School Stocks



Target Inc. (NYSE: TGT - News) is a back to school cornucopia, carrying everything from pencils and pens to pants and shirts that make it a potential one-stop shop for even the most demanding back to school shoppers. The company has a solid 12% average earnings surprise over the last four quarters to go along with its discounted P/E of 13X against its peers 17X.



Bed Bath and Beyond (NasdaqGS: BBBY - News) is a great place for college-bound students to pick up big savings on new sheets and towels. The company has also been hot over the last year, with its share price more than doubling from its 2009 low. The next-year estimate is bullish, projecting 13% earnings growth.



Apple Inc. (NasdaqGS: AAPL - News) is probably the hottest company on the Street right now, posting unbelievable Q2 results in early July that contained a 14% earnings surprise on a 61% increase in revenue. This is the go-to company for young consumer electronics aficionados with its iPhone, iPod and iPad and Mac books topping the charts of popular devices for the back to school crowd.



Office Max (NYSE: OMX - News) is another back to school hot spot, providing both schools and students alike an opportunity to load up on supplies at discounted prices. The company has recently seen a big turn in its earnings profile, rebounding from a Q4 loss with strong first and second quarter performances. That trend is expected to continue, with the next-year estimate projecting 40% earnings growth.

 Chipotle Mexican Grill, Inc. (CMG) Is a great back to school stock , after a long day going school shopping or going out for lunch during school , there is no better place to eat fresh and organic tacos for a great hip place than CMG............. W/ growth of 45% and making hand over fist , Buy,Buy,Buy ................

Starbucks Corp. (SBUX. Have a coffee or a danish before you go shopping early in the morning or winding down late at night doing homework on WiFi w/ friends.


Thoughts ??????

What Stock will you buy for the long term ? Target Or Walmart ? ( TGT , WMT )

By A. Mirhaydari

Video
After a long winter, spring is in bloom. So is the economy. People are going back to work. Wallets are opening again. Dollars are zipping from hand to hand like honeybees pollinating an orchard.

And the fight for many of those dollars is shaping up as another round in the epic battle between two retail giants: Wal-Mart Stores (WMT, news, msgs) and Target (TGT, news, msgs).


The 'new frugality' lives on
To some, their tale is the story of the recession -- which, it's fair to say, Wal-Mart won. Early in the downturn, as consumers switched to discounters for inexpensive food and cheaper goods, Wal-Mart's stock rose more than 50%. As more upmarket stores took a hit, Target's stock lost more than 60%.

But we're at a turning point. Fearful that consumers will move back upscale, Wal-Mart is focusing on spiffing up its stores while maintaining a price advantage over Target. Meanwhile, Target is touting more-fashionable offerings by telling customers to "expect more, pay less."

Investors are clearly betting on Target. Since March 2009, when the market rebound began, Wal-Mart has been trading sideways. Target's stock has risen 138% in 13 months.

At the turn
But has the market picked the right horse? So far, it would seem so. In the fourth quarter of 2009, for the first time since the recession began, Target enjoyed better sales and customer traffic numbers than Wal-Mart did.

Target saw a 2% boost to customer traffic during the fourth quarter, while Wal-Mart suffered a slight decrease. Same-store sales also fell 1.6% for Wal-Mart's U.S. business; Target saw a 0.6% increase.

Wal-Mart Show of Weakness?
Go to CNBC

These numbers have fed the notion that consumers who traded down are trading back up. Target seems to have momentum: Management recently increased first-quarter earnings projections based on strong sales.

We'll find out more when Target reports quarterly results Thursday; Wal-Mart reports Tuesday.

That notion explains why Wal-Mart has basically been left out of a historic market move. From the March 2009 low to the mid-April high, the Standard & Poor's 500 Index ($INX) has shown the largest and fastest gain -- up 79% in 13 months -- of any new bull market rally in the past 50 years. Yet Wal-Mart shares have trended lower, in a pattern reminiscent of the sideways grind that characterized the stock during the go-go market years from 2003 to 2007.

Wal-Mart, which is America's largest retailer, with 4,300 U.S. stores, seems to recognize the problem. A zealous focus on cut-rate prices doesn't work as well when shoppers are feeling flush. Target, No. 5 in sales and with 1,740 stores, has a different attitude. It drives visits through product selection and a more attractive shopping experience, from shorter checkout lines to nicer restrooms.

Click graphics to see interactive charts
Wal-Mart Stores

Target
Both companies have launched initiatives to drive growth as the economy improves. But can Wal-Mart adapt? And will Target keep going, with the help of projects like a fresh grocery initiative that challenges Wal-Mart's bread-and-butter food business?

First, of course, they need to be sure the retail rebound really has legs.

Is the retail recovery for real?
The economic data sure support the idea that a consumption renaissance is under way despite all those predictions of consumer frugality being here to stay.

Retail sales grew 0.4% in April after a 2.1% surge in March -- which had been the best monthly performance since January 2006. The April sales numbers were up 8.8% over last year. The two-month average for chain-store sales is up 6.3% from the recession low and is now almost back to the 2007 peak. Wage growth is also on the rise for the first time since 2008. And on May 7, we learned that the economy had created 290,000 in April, the best performance since March 2006.

There is plenty of anecdotal evidence, too. Apple (AAPL, news, msgs) sold a million iPads in just 28 days. Domino's Pizza (DPZ, news, msgs) posted a huge 14% jump in sales in the first quarter, which ranks as one of the largest-ever quarterly same-store jumps recorded by a fast-food chain. And the new "Iron Man 2" movie sold $134 million in tickets in its first weekend, ranking it as Hollywood's fifth-biggest opening ever.

Overall, nominal consumer spending in the first quarter has already passed its 2008 peak, and it is now on track to move further into new territory.

Sure, the data aren't universally strong. Initial weekly jobless claims remain troublingly high with about 450,000 people filing for new unemployment benefits each week. The housing market could weaken with the May 1 expiration of the homebuyer tax credit. The number of food stamp recipients continues to move to new highs. And the ISI Group's surveys of retailers have started to show a weakening in sentiment over the past four weeks.The ISI Group's sales surveys of credit card companies, shopping guide companies, furniture stores and auto dealers are all moving higher. And consumer stocks, as represented by the Consumer Discretionary Select Sector SPDR (XLY, news, msgs), an exchange-traded fund, and including stocks such as Target and Ford Motor (F, news, msgs), have been one of the market's best-performing sectors this year. XLY is up 11.1%, compared with a 1.9% rise for the S&P 500. And that ISI Group retail sales survey had previously made an explosive jump to new highs.


Besides job growth and wage expansion, which we're now starting to see, the level of consumer indebtedness is the next-most-important driver of consumer spending. Things are looking good on that front, too: The household debt service ratio, which compares interest and principal payments to disposable income, fell to 12.6% as of the fourth quarter -- the lowest since 2000.

Combined, the evidence suggests that the consumer bounce-back is for real.

Wal-Mart fights for its edge
As cautious consumers used to paying more elsewhere flocked to Wal-Mart during the economic downturn, the store didn't have to offer as many price markdowns. Higher prices meant bigger margins, which drove profits.

But the company's price advantage over some competitors, such as grocery stores, began to narrow.

This set up the company for trouble in the recovery. Consumers decided that the savings Wal-Mart offered over the likes of Kroger (KR, news, msgs) and Safeway (SWY, news, msgs) weren't worth the hassle of shopping for groceries in a big-box store.

Citigroup analyst Deborah Weinswig found that the price gap between Wal-Mart and Kroger fell from 27% in August 2008 to 22% in December 2009. Weinswig believes this was a big reason Wal-Mart posted its first decline in same-store traffic in the fourth quarter in two years. In the fourth quarter, Wal-Mart's U.S. same-store sales dropped 2% from a year ago as traffic declined.

Wal-Mart's management responded. It refocused on price rollbacks, making bigger price cuts and increasing spending on marketing to advertise them. We can already see the effect this effort has had. A recent pricing survey from Credit Suisse analyst Michael Exstein found that the price gap between the two has widened noticeably to levels not seen since early 2009.

But price isn't all that's bothering Wal-Mart. Things such as merchandise breadth and depth, store appearance, checkout speed and merchandize quality have also been hampering growth. Apparel sales, for instance, dropped 8% in 2009. Though nearly 60% of Target's merchandise mix is discretionary, a full 49% of Wal-Mart's revenue comes from groceries.

That means Wal-Mart has less to offer customers besides the basics.

This is changing, too. Wal-Mart recently moved its apparel headquarters to New York and is staffing the satellite office with talent from department stores and specialty apparel chains. (The regular headquarters in Arkansas isn't exactly at the center of the fashion universe.)

The company also continues to roll out its "Project Impact" store makeovers. Dour gray carpet and white linoleum are being replaced with bright blues, faux wood flooring and more-open floor plans. By the end of the year, 32% of Wal-Mart's stores will have received the facelift, and all stores are expected to be remodeled by 2014.

The company is also focusing on initiatives dubbed "Clean Action Alley" and "Smart Network." The first refers to keeping the main aisle on the food side of the store clear of merchandise pallets, replaced by end-cap displays; the second involves the placement of television displays with product information. Combining these two initiatives has increased items in baskets and resulted in higher ticket prices.

These aren't small changes. But investors are obviously skeptical, especially with Target now hitting its stride.

Target enters the sweet spot
While Wal-Mart's focus remains low-price leadership, Target has begun touting the "expect more" half of its low-cost, high-quality personality. It recently took out a full-page ad in The New York Times encouraging shoppers to "expect more than just a low price" and railing against sale or price gimmicks. This brought an end to 18 months of focusing mainly on price.

The timing is perfect. The company is reaching upscale with product launches from fashion designers such as Jean Paul Gaultier and Zac Posen. Recently, the company has seen strength in its apparel sales categories.

Still, there are some concerns here, too.

The company is in the midst of a rollout for its new "PFresh" fresh grocery concept that is now in 350 locations, 20% of Target's store base. The idea here is that by offering more refrigerated goods, Target's general stores can act as a fill-in for trips to the grocery store. The hope is that customers dropping in for dinner items will visit electronics, apparel or toys.

Early results have been lukewarm: Jefferies analyst Daniel Binder notes that the increased traffic benefit from PFresh hasn't resulted in "meaningful cross-shopping to the general merchandise side of the store." But Binder is confident that it's "just a matter of time before this happens and could provide upside to the story."

So which stock to buy?
Though both companies carry significant implementation risk as they roll out significant store remodels, Target continues to enjoy a natural advantage in this economy. This is especially true as the company leverages its lead in the apparel space. Binder is looking for Target to earn $3.81 per share next year and $4.30 in 2012 as the economic recovery rolls on.

Despite its run-up, the stock is currently selling for 13.1 times Binder's 2012 earnings-per-share estimate, well under the company's five-year average price-to-earnings multiple of 15.5. That's a common way to tell if a stock is overpriced, and it suggests this one isn't. Running the numbers gives you a price target of $66.65 a share -- an 18.3% gain from here.



If you don't want to worry about earnings and price multiples, take a look at the relative strength of Target's stock compared with Wal-Mart's. As you can see in the chart above, the 50-week moving average of this ratio does a nice job of predicting the economic cycle and the relative performance of the two companies.

The breakdown in late 2007 came a couple of months before the recession started, while the April 2009 upswing happened a few months before the economy started growing again. (You can find an explanation of relative-strength stock charting here.)



The same thing happened in 2003, with the Target-to-Wal-Mart stock price ratio moving over the 50-week average in May and not looking back until 2007 except for a brief hiccup in 2006. During the period, Target consistently outperformed Wal-Mart except for that hiccup. If you bought Target instead of Wal-Mart when the relative strength ratio first went over the 50-day average in early 2003, you would've enjoyed a performance differential of 112% (TGT returned 87.5%, while WMT lost 11.4%).

I expect a repeat performance in the years to come. Target does better in better times, which is why it's the stock to buy now.

Eventually, when the economy begins to slow again, Wal-Mart will come back. By then, it will have remodeled all its stores and improved its product mix. Perhaps the next time, Wal-Mart will impress all those trade-down customers enough to keep them. I think the company missed its chance this time around. MSN.com

I would buy Target & Walmart for the long term ....