Are These The Best Cyclical Stocks To Invest In December 2021?
With ‘Omicron’ being the new buzzword across the board, cyclical stocks would be in focus in the stock market now. For the most part, companies in this industry often grow in times of economic growth, and vice versa. As such, watching the sector during such times could help provide some insight into investor sentiment regarding the economy. Now, given the market’s reaction to the initial Omicron, cyclical stocks are in an interesting position, to say the least. Because of this, investors could be seeing opportunities in some of the top cyclical stocks thanks to the recent sell-offs.
Notably, cyclical companies are not sitting idly by as well. On one hand, fintechs like Square (NYSE: SQ) are becoming increasingly relevant as contactless transactions become the new norm. To accommodate this demand, CEO Jack Dorsey is stepping down from his similar role in Twitter (NYSE: TWTR). In theory, this move would leave Dorsey with more room to build Square and its numerous crypto and conventional finance offerings. On the other hand, gas firms such as ConocoPhillips (NYSE: COP) continue to gain as well. Thanks to the ongoing supply chain bottlenecks, demand for its petrol offerings could persist moving forward.
Overall, these are but two examples of the active cyclical industry now. I can understand if all this has you keen on investing in the top cyclical stocks. Should that be the case, here are four to know in the stock market today.
4 Top Cyclical Stocks To Consider Watching Now
- Nike Inc. (NYSE: NKE)
- AT&T Inc. (NYSE: T)
- Target Corporation (NYSE: TGT)
- Chevron Corporation (NYSE: CVX)
Nike is a leading designer and manufacturer of athletic apparel, footwear, and equipment across a wide variety of sports and fitness markets. The cyclical company is one of the most valuable sports brands in the world. In addition to manufacturing equipment and sportswear, it operates retail stores under the Niketown name. NKE stock currently trades at $168.93 as of 12:04 p.m. ET and is up by over 25% in the past year.
In September, Nike reported its first-quarter earnings for fiscal 2022. Firstly, revenue for the quarter was $12.2 billion, up by 16% year-over-year. Its Nike Direct sales were $4.7 billion, up by 28% year-over-year while digital sales increased by 29%. It also reported a diluted earnings per share of $1.16 for the quarter, increasing by 22% compared to a year earlier. The company says that this quarter’s strong performance is continued proof of its deep consumer connections and unrelenting innovation pipeline.
To top things off, Nike also says that its digital advantage continues to fuel its brand momentum. During this quarter, the company has also returned approximately $1.2 billion to shareholders, including $435 million in dividends and share repurchases of $742 million. For these reasons, should you be paying close attention to NKE stock?
Following that, we have AT&T, a multinational conglomerate holding company that is one of the largest telecommunications providers in the U.S. Also, as a broadband connectivity provider, its high-speed fiber and wireless broadband networks connect people and businesses across the country. AT&T’s entertainment segment, WarnerMedia owns one of the largest TV and film studios in the world along with a wide library of content. This includes HBO Max, which has 10,000 hours of curated, premium content. T stock currently trades at $22.71 as of 12:04 p.m. ET.
On November 17, 2021, the company’s CFO, Pascal Desroches provided a shareholder update. He addressed the company’s renewed momentum in its wireless business and says that AT&T’s go-to-market strategy which has led to wireless service revenue and EBITDA growth is sustainable.
Furthermore, the company continues to expect a fourth-quarter EBITDA growth to exceed its third-quarter levels. The company’s HBO Max and HBO net adds also continue to grow, with strong additions in international markets. Desroches also says that he remains confident in HBO Max’s longer-term global expansion. With that being said, is T stock worth watching?
Next, we have Target Corporation, a general merchandise retailer that serves all 50 U.S. states. In 2020, the company reported a total revenue of $93.6 billion and currently has over 1,900 stores across the country. It also boasts 46 distribution centers and 48 owned brands that are unique to Target. TGT stock currently trades at $243.21 as of 12:04 p.m. ET and is up by over 35% in the past year.
It recently reported its third-quarter financials. Diving in, third-quarter comparable sales grew by 12.7% year-over-year. The company also saw double-digit comparable sales growth across all five of its core merchandise categories. Furthermore, it reported a GAAP earnings per share of $3.04, a 51.6% increase compared to a year ago.
“The consistently strong growth we’re seeing in our business, quarter after quarter, is a testament to the passion and commitment our team brings to serving our guests, and the trust we’ve built with them as a result,” said Brian Cornell, chairman, and chief executive officer of Target Corporation. Given this piece of news, will you consider investing in TGT stock?
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Last but not least, we will be taking a look at the Chevron Corporation. By and large, it is among the largest oil producers in the U.S. For a sense of scale, the company is active in over 180 countries worldwide. Through its global network, the company produces crude oil and natural gas. The likes of which are used to manufacture transportation fuels, lubricants, petrochemicals, and additives. With the potential rise in demand for Chevron’s current offerings this busy holiday season, CVX stock could be in focus. As it stands, the company’s shares currently trade at $114.00 a share as of 12:05 p.m. ET.
To get an idea of Chevron’s current momentum on the financial front, we could look at its latest earnings figures. In detail, the company raked in a total revenue of $42.55 billion for the quarter. This marks a whopping 77% year-over-year jump.
Moreover, Chevron also posted monumental gains of over 2,700% in both its net income and earnings per share over the same time. CEO Mike Wirth cites improved market conditions, strong operational performance, and lower cost structure,” as key growth factors. Should Chevron maintain its current pace, would you consider adding CVX stock to your December 2021 watchlist?