Are These Top Cyclical Stocks Worth Watching Now?

Cyclical stocks could be worth considering in the stock market today. After all, stocks appear to be attempting a recovery following a rough start to 2022. Sure, there remains the factor of fast-approaching interest rate hikes from the Federal Reserve. However, investors should also remember that cyclicals soared throughout the past year on the hype around a post-pandemic market. As such, with the current movement in stocks, investors could be keen to jump on the top cyclical stocks now.

For one thing, cyclical firms are not sitting on the sidelines as well. This is evident from consumer discretionary names such as General Motors (NYSE: GM) to industrial players like 3M (NYSE: MMM). On one hand, GM is ramping up its electric vehicle manufacturing capabilities to keep up with the competition. This news comes from the company via a conference call yesterday. In it, GM revealed plans to spend a whopping $7 billion to build a new battery plant in Michigan. Additionally, the company also aims to overhaul one of its Detroit factories to begin producing electric pickup trucks by 2024. EV makers like GM would be an example of cyclical players focusing on long-term trends in consumer markets.

On the other hand, materials manufacturer 3M posted solid figures in its latest quarterly earnings report yesterday. To highlight, the company reported a quarterly earnings per share of $2.31, 30 cents above expectations. The firm notes that its effective management of supply chain disruptions and pricing action is to thank for this. Overall, companies in the cyclical space continue to adapt to the current times. Could that make one of these cyclical stocks worth investing in now?

Cyclical Stocks To Watch February 2022

Boeing Company

Boeing Company is a multinational company that designs, manufactures, and sells airplanes, rockets, satellites, and telecommunication equipment among others. In fact, it is a leader in the aviation industry and supports airlines and governments in over 150 countries. BA stock currently trades at $194.27 as of Wednesday’s close.

To point out, the aerospace giant reported its latest quarterly earnings figures earlier today. Overall, it posted a loss per share of $7.69 on revenue of $14.8 billion. For the sake of comparison, consensus projections on these fronts were a loss of $0.42 a share and quarterly revenue of $16.59 billion. This marks Boeing’s third annual loss in a row as pandemic and production factors weigh in on its bottom line. In fact, a $3.5 billion charge on its 787 Dreamliners is among the contributors to the company’s lackluster earnings. This charge would be from production issues preventing the firm from delivering aircraft for the past 15 months. 

Even so, there is one positive takeaway from the firm’s earnings, the company’s positive cash flow. This would be the first time Boeing has done so since its pre-pandemic operations. According to Boeing, a surge in deliveries of its 737 Max airliner is the main factor behind this. As demand for air travel continues to pick up across the board, this trend could, ideally, persist. With all this in mind, could BA stock be a top watch for you this week?

BA stock chart
Source: TD Ameritrade TOS

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AT&T Inc.

Following that, we have AT&T, one of the world’s largest telecommunications companies. In detail, it is a diversified, global leader in telecommunications, media and entertainment, and technology. The company also provides more than 100 million U.S. consumers with communications and entertainment experiences across mobile and broadband. Its WarnerMedia is a leading media and entertainment company that distributes premium and popular content. T stock currently trades at $24.25 as of the end of Wednesday’s trading session.

Today, the company reported its fourth-quarter and full-year results. Diving in, consolidated revenue for the quarter was $41 billion. It also posted adjusted earnings per share of $0.78 compared to $0.75 a year ago. For the full year, AT&T continues to lead the industry in postpaid phone net adds, gaining more subscribers than in the prior 10 years combined, adding more than 1 million subscribers.

John Stankey, AT&T CEO had this to say, “We ended 2021 the way we started it – by growing our customer relationships, running our operations more effectively and efficiently, and sharpening our focus. Our momentum is strong and we’re confident there is more opportunity to continue to grow our customer base and drive costs from the business.“ Given this piece of news, is T stock worth investing in?

T stock chart
Source: TD Ameritrade TOS

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Mattel Inc.

Another firm to consider in the cyclical trade now would be Mattel. In brief, it is a global toy company that boasts a massive portfolio of entertainment franchises. The likes of which include popular brands such as Barbie, Hot Wheels, UNO, and Thomas & Friends. For a sense of scale, Mattel operates in 35 locations and its products are available in over 150 countries worldwide. As it stands, MAT stock currently trades at $20.46 as of the end of Wednesday’s trading session.

For the most part, this is likely thanks to the company’s latest announcement. Namely, the company is currently working together with Disney (NYSE: DIS) via a multi-year licensing agreement. Through this agreement, Mattel now has the global licensing rights to develop toys for the Disney Princess and Frozen franchises. In detail, the toys will cover product categories such as Disney Consumer Products, Games, and Publishing alongside fashion dolls, and figures. By Mattel’s estimates, the current collection of offerings will likely launch at retailers worldwide by early 2023.

In theory, this is a massive win for Mattel given the immense popularity of these Disney franchises. From Disney’s timeless classics to its smash-hit series Frozen, Mattel would be leveraging legendary IPs. This deal would also mark an expansion of Mattel’s ongoing partnership with Disney on its Toy Story and Cars franchises. With the company set to report its fourth-quarter earnings on February 9, will you be keeping an eye on MAT stock now?

MAT stock
Source: TD Ameritrade TOS

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