Whether to Invest in Luxury goods based on Risk, Background, and Market

Abstract

The luxury goods industry, the aviation industry, and the hotel industry all fall into the category of discretionary goods in people's lives. However, in the last 3 years, the spread of Covid-19 has affected all three sectors to a greater or lesser extent. Through the method of comparison, we can intuitively show the differences in the investment of financial stocks in these three industries. LVMH, AAR.Corp and Marriott International are representatives of luxury goods, aerospace, and hotels respectively, among which AAR.Corp is a small-cap stock with more characteristics. Analyse from a risk perspective, risk: LVMH<Marriott International<AAR.Corp.Analyse from a profitability perspective, profitability: AAR.Corp<Marriott International<LVMH.Analyse from a market perspective: value investors will invest in AAR.Corp.PEG investors may invest in Marriott, and LVMH would be on their watch list until its PEG ratio is under 2. Income investors won't invest in these three stocks since their dividend yield is less than 3%. This paper can make investors more clear about the stock market situation of non-essential goods, to help them choose suitable stocks.