Retail stocks are tough work.
The weather, changes in consumer trends, confidence and technological disruption are just some of the risks afflicting Australia's best discretionary retailers.
However, if you're prepared to invest long term, there are a handful of great companies listed on the ASX that appear very compelling investments at today's prices.
Following a recent selloff in share prices across the market, many dividend-paying retailers are now looking significantly cheaper than six months ago and offering even bigger dividend yields.
In fact, grossed up for their tax-effective franking credits, many retailers are offering comparable dividend yields well over 6%.
It's not simply the small and risky companies either. As can be seen in the table below, many of the biggest retailers look cheap using a price-earnings ratio.
10 retail stocks you can buy today
| Company | Forecast Gross Dividend Yield | Market Cap | Price-Earnings Ratio |
| Retail Food Group Limited (ASX: RFG) | 8.03% | $758 million | 13x |
| Flight Centre Travel Group Ltd (ASX: FLT) | 5.88% | $3,884 million | 15x |
| Premier Investments Limited (ASX: PMV) | 5.61% | $1,984 million | 22x |
| RCG Corporation Limited (ASX: RCG) | 5.66% | $584 million | 25x |
| Burson Group Ltd (ASX: BAP) | 3.40%1 | $890 million | 20x |
| JB Hi-Fi Limited (ASX: JBH) | 7.33% | $1,846 million | 13x |
| Harvey Norman Holdings Limited (ASX: HVN) | 7.77% | $4,423 million | 16x |
| Vita Group Limited (ASX: VTG) | 6.88%1 | $254 million | 16x |
| Breville Group Ltd (ASX: BRG) | 6.40% | $816 million | 17x |
| Reject Shop Ltd (ASX: TRS) | 4.84% | $266 million | 16x |
Source: Morningstar Inc; 1 = no forecast data provided, trailing dividend yield was used.
Buy, Hold or Sell?
Of the 10 stocks above, I think any of the first five – Retail Food, Flight Centre, Premier Investments, RCG Corp and Burson – could find their way into savvy investors' portfolios. However, if I had to pick my favourite retail stock for new money it'd be Retail Food Group.
