Are These The Best Cyclical Stocks To Buy In The Stock Market Today?
Cyclical stocks are stocks that tend to follow the ups and downs of the economy. Cyclicals are usually businesses that are affected by changes in consumer spending, such as automakers, airlines, and retailers. In the stock market today some of the more popular cyclical names are the likes of The Walt Disney Company (NYSE: DIS) and EPR Properties (NYSE: EPR) to name a few.
Also, cyclicals tend to do well when the economy is booming and people are spending freely. However, when the economy slows down, cyclicals often suffer as people cut back on their spending. As a result, cyclical stocks can be quite volatile, and investors need to carefully consider the state of the economy before investing in them. However, for investors who are willing to stomach the volatility, cyclical stocks can be a great way to profit from economic growth. If this has you keen on investing in the cyclical sector, here are three top cyclical stocks to check out in the stock market right now.
Cyclical Stocks To Buy [Or Avoid] Right Now
- Nucor Corporation (NYSE: NUE)
- Home Depot Inc. (NYSE: HD)
- Restaurant Brands International Inc. (NYSE: QSR)
Nucor Corporation (NUE Stock)
Kicking off the list today, Nucor Corporation (NUE) is an American steel manufacturer based in Charlotte, North Carolina. In brief, Nucor is the largest steel producer in the United States, and it is also the largest minimill steelmaker. In addition, the company produces a variety of steel products, including hot-rolled, cold-rolled, and galvanized steel. Nucor also produces steel beams, bars, billets, and plates. Currently, Nucor has an annual dividend yield of 1.51%.
Aside from that, back in July, the company reported better-than-expected second-quarter 2022 financial results. In detail, NUE posted earnings per share of $9.67, along with revenue of $11.8 billion. This was versus Wall Street’s Q2 consensus earning estimates of $8.91 per share, with revenue estimates of $11.8 billion. Additionally, revenue increased by 34.2% during the same period, in 2021.
Year-to-date, shares of NUE stock have outperformed the broader market so far this year has increased by over 17%. As of Wednesday morning’s trading session, shares of NUE stock are trading at $132.53 per share. With this in mind, do you think NUE is a good cyclical stock to buy now?
Home Depot (HD Stock)
Next, Home Depot Inc. (HD) is an American home improvement supplies retailing company that sells tools, construction products, and services. It operates many big-box format stores across the United States (including all 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam), all 10 provinces of Canada, and Mexico. For a sense of scale, Home Depot is the largest home improvement retailer in the United States with over 2,316 retail stores. Currently, HD shareholders enjoy an annual dividend of 2.60%.
In August, the company announced stronger-than-expected second-quarter 2022 financial results. Getting straight to it, Home Depot reported earnings of $5.05 per share, while posting revenue of $43.8 billion. This is in comparison with analysts’ consensus estimates for Q2 of earnings per share of $4.95, and revenue estimates of $43.4 billion. What’s more, HD reported a 6.5% increase in revenue on a year-over-year basis. Aside from that, Home Depot reaffirmed its fiscal 2022 outlook. In detail, the company announced they continue to estimate fiscal 2023 earnings of approximately $16.31 per share and revenue of $155.69 billion.
Moving on, also in August, Home Depot announced that its Board Of Directors has declared a second-quarter cash dividend of $1.90 per share. As a result, this is the 142nd straight quarter Home Depot has paid a cash dividend to shareholders. In the same announcement, the company reported a $15 billion share repurchase program, which will replace its previous authorization. As of Wednesday morning’s trading session Home Depot stock is trading at $292.54 per share. With this in mind, should you be keeping close tabs on HD stock right now?
Restaurant Brands International (QSR Stock)
Rounding off the list, Restaurant Brands International Inc. (QSR) is a multinational fast food holding company. As of December 31st, 2020, the company operated approximately 29,000 restaurants in more than 100 countries and US territories. Notably, some of the most popular names in Restaurant Brands International’s portfolio are brands like Tim Hortons, Burger King, and Popeyes to name a few. Currently, QSR offers shareholders an annual dividend yield of 3.65%.
In August, the company reported its Q2 2022 financial results. Diving in, QSR posted second-quarter earnings of $0.82 per share, with revenue of $1.6 billion. This is versus consensus estimates of $0.73 per share, to go along with revenue estimates of $1.6 billion. What’s more, Restaurant Brands International was able to report a 14% increase in revenue during the same period in 2021.
Moreover, Restaurant Brands International reported that it delivered over $400 million of capital returned to shareholders in the second quarter through dividends and buybacks. With that, shares of QSR stock have recovered over 9% in the last 6 months of trading action. Meanwhile, on Wednesday morning, QSR stock is trading at $59.22 per share. All in all, is QSR a good cyclical stock to invest in for your long-term portfolio?