Fears concerning the “Amazonian” takeover of virtually every retail market have crimped retail stocks; more recently, however, these fears have been supplanted by optimism over the strength of the consumer, suggests Chuck Carlson, editor of DRIP Investor.

Indeed, low unemployment, tax cuts, and improved wage growth have helped consumer confidence, which is showing up in the numbers for many retailers. To be sure, the rising retail tide is not lifting all boats. Retailers dependent on mall traffic, for example, are still finding rough waters.

And retailers that are caught in the middle — neither high-end players nor discounters — are struggling to resonate in the marketplace. Still, a number of retailers have been putting up good numbers, and their stock prices are benefiting from the top- and bottom-line growth.

Walmart (WMT) is coming off its best quarterly showing in years. Same-store sales in the latest quarter rose 4.5%, the highest growth rate in more than 10 years. The stock’s online business is growing nicely, and Wal-Mart seems positioned to be able to weather the competitive threat from Amazon.

The stock has advanced in recent weeks but is still down from its 52- week high of nearly $110 per share. Yielding 2%, these shares offer a blue-chip play in the retailing sector.

Another retailer posting excellent results is Costco Wholesale (COST). U.S. same-store sales for the 52-weeks ending September 2 (excluding changes in gasoline prices) were up a healthy 7.4%. The company’s e-commerce business was up 31.3% over the same time period.

Costco’s business model, with its membership fees, provides a nice kicker to profi ts. Down from its 52- week high of $245, Costco remains a solid holding in retail.

Another “big box” winner in retailing is Home Depot (HD). Same-store sales were up a whopping 8% in the latest quarter. The company continues to benefit from a strong remodeling market, which is being boosted by rising home prices and tight inventory of homes for sale.

The stock, yielding 2%, has performed well and is trading just  off its 52-week high of $215 per share. The stock offers the type of specialty retailer that should be able to stave off the Amazon effect.

Please note Walmart, Costco, and Home Depot all offer direct purchase plans whereby any investor may buy the first share and every share directly from the company.

Subscribe to Chuck Carlson's DRIP Investor here…