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Signet Jewelers (NYSE: $SIG ), a jewellery retailer that specializes in diamonds, has sparkled brightly for investors this year.

Signs of an economic slowdown in the U.S. and a pullback in consumer spending have led to carnage among stocks of retailers in 2025.

But not for Akron, Ohio-based small-cap stock Signet Jewelers. So far this year, SIG stock is up 30%, nearly double the 16% gain in the benchmark S&P 500 index.

Over the past five years, Signet Jewelers' stock has risen nearly 300%. Analysts say the company has prospered because of its largely affluent customer base.

With the top 10% of U.S. earners now accounting for nearly half of all consumer spending in America, Signet has benefited high-end luxury brands and retailers such as Signet Jewelers.

Investor Michael Burry of "The Big Short" fame held a small position in SIG stock earlier this year, riding it to gains. Although it's not clear if Burry still owns the stock right now.

Like all retailers, Signet Jewelers struggled with store closures during the Covid-19 pandemic but has since come storming back.

Analysts also say that Signet Jewelers' stock has benefitted since 2017, when the company ended its practice of extending credit directly to consumers.

Prior to 2017, Signet Jewelers not only sold diamonds and jewellery, but it also financed the purchases of customers. Analysts saw that as a risky move.

Since shuttering its finance unit to focus solely on jewelry sales, Signet's free cash flow has soared, driving the share price higher as a result.

Today, Signet operates approximately 2,700 jewelry stores in the U.S., Canada, and the United Kingdom (U.K.) under brands such as Kay Jewelers, Zales, Jared, and more.

Signet remains the largest jewelry retailer in the U.S., with a 10% market share – which is three times larger than its closest competitor, providing it with a wide competitive moat.

With a market capitalization of $4.26 billion U.S., Signet Jewelers is a small-cap stock. It pays a quarterly dividend of $0.32 U.S. per share, for a yield of 1.26%.

Having run-up 30% this year, SIG stock is richly valued right now trading at nearly 34 times future earnings estimates.

But for investors looking to diversify their portfolio with the stock of a retailer, Signet Jewelers might fit the bill.