S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33
S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33
S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33
S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33

7 Cyclical Stocks That Make Sense In a Volatile Market

Posted on Friday, September 10th, 2021 by MarketBeat Staf
7 Cyclical Stocks That Make Sense In a Volatile MarketDespite many predictions of an imminent, and possibly severe, market correction, 2021 has been a great year for investors. And that’s particularly true for investors who invested in cyclical stocks. This group of stocks was hit hard as the economy ground to a halt. This makes sense because cyclical stocks move in the direction of the broader economy.

But that’s also why, almost immediately, many of these stocks began to come back. And with the economy reopening, these stocks continue to show strength.

Cyclical stocks are commonly dividend into companies that manufacture durable goods, non-durable goods, or deliver services. At any given time, one or more of these sectors has outperformed others. But for the most part investors that bought into cyclical stocks continue to be rewarded.

In this presentation, we’ll take a look at seven cyclical stocks that are proving to be resilient even as the market continues to baffle even the most experienced investors.

#1 - Nucor (NYSE:NUE)

Nucor logo

Perhaps no stock illustrates the anticipation for the proposed infrastructure bill than Nucor (NYSE: NUE), the largest steel company in the United States. The company is expected to play a major role in rebuilding America’s bridges and tunnels.

And the company is coming off another strong earnings report and citing a stronger, and faster-than-expected U.S. recovery from the pandemic. This is requiring the company’s customers to restock depleted inventories. Plus, steel prices are much higher than they were pre-pandemic. The company’s mills are already operating at near 100% capacity and that does not take into account the additional business that would come from the infrastructure bill.

If investors need any more reason to jump on this cyclical stock, the company is planning to return 40% of its net income to shareholders with dividends and share repurchases. And the company has been increasing its dividend for the last 48 consecutive years, which makes it a Dividend Aristocrat.

About Nucor
Nucor Corp. engages in the manufacturing of steel and steel products. It operates through the following segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment comprises of carbon and alloy steel in sheet, bars; structural and plate; steel trading businesses; rebar distribution businesses; and Nucor's equity method investments.Read More 

Current Price: $100.92
Consensus Rating: Hold
Ratings Breakdown: 5 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $98.08 (2.8% Downside)

#2 - NextEra Energy (NYSE:NEE)

NextEra Energy logo

In terms of retail electricity sales, NextEra Energy (NYSE: NEE) is the largest electric utility in the United States. And like many utility companies, NextEra has a strong dividend history with 42.49% growth over the last three years.

But wait a second. Aren’t utility companies generally considered to be defensive stocks? That would be true except that NextEra is not exclusively a utility company. The company also owns NextEra Energy Resources, which is leading the way in America’s pursuit of clean energy.

 This gives what would normally be considered a defensive play some bullish upside. And that’s reflected in the NEE stock price which has grown 13% in 2021. Clean energy is becoming a reality as the price catches up to the technology. NextEra is the world’s largest generator of renewable energy from wind and solar. And it would appear that solar will play a major role in our clean energy future. Solar power is expected to move from 3% to over 40% of power generation by 2035.

About NextEra Energy
NextEra Energy, Inc is an electric power and energy infrastructure company. It operates through the following segments: FPL & NEER. The FPL segment engages primarily in the generation, transmission, distribution and sale of electric energy in Florida. The NEER segment produces electricity from clean and renewable sources, including wind and solar.Read More 

Current Price: $80.70
Consensus Rating: Buy
Ratings Breakdown: 6 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $85.25 (5.6% Upside)

#3 - Walt Disney Company (NYSE:DIS)

The Walt Disney logo

The Walt Disney Company (NYSE: DIS) continues to show that the whole of its company is greater than any of its individual parts. However, the individual parts are fairly attractive. In fact, it was the company’s streaming service, Disney+, fortuitously launched in late 2019 that helped the company weather the pandemic.

Today, with the company’s theme parks open and the production studios filming again, investors are likely to see DIS stock move past its 52-week high. Due to the Delta variant, it will take some time for Disney to see its theme park revenue rise to pre-pandemic levels. And analysts will also have to wait and see how successful the company will be at passing higher costs on to their guests. The company recently reinstituted its annual pass. The price is pretty close to what it was before the pandemic, but it comes without a couple of significant benefits.

True, the House of Mouse did suspend its dividend at the onset of the Covid-19 pandemic. However, Disney’s CFO Christine McCarthy has reiterated that Disney anticipates making dividends and share repurchases a part of its capital allocation strategy.

About The Walt Disney
The Walt Disney Co is a diversified international family entertainment and media enterprise. It operates through the following segments: Media Networks, Parks, Experiences and Products, Studio Entertainment and Direct-to-Consumer and International (DTCI). The Media Networks segment includes cable and broadcast television networks, television production and distribution operations, domestic television stations, radio networks and stations.Read More 

Current Price: $176.00
Consensus Rating: Buy
Ratings Breakdown: 21 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $210.38 (19.5% Upside)

#4 - Advanced Micro Devices (NASDAQ:AMD)

Advanced Micro Devices logo

Despite being one of the hottest names in the semiconductor industry, Advanced Micro Devices (NASDAQ: AMD) has had a rocky path to success in 2021. After ending 2020 at just over $90 per share, it took AMD stock the better part of seven months to break the $100 barrier. And this was despite AMD stock being a favorite among the WallStreetBets subreddit community.

Now that it has, bulls may be wondering how high it can go. AMD supplies microprocessors and graphics semiconductors and has been one of the leading suppliers to the graphic processing unit (GPU) space. However, the company is also making inroads in the central processing unit (CPU) space as it relates to data centers. As it does, it is taking market share from Intel (NASDAQ:INTC).

But what many analysts and investors will love to see is the company’s impressive free cash flow which should pass $5 billion next year.  And when combined with its gross margin, and with the global chip shortage likely to last into 2022, AMD stock looks like a good buy.

About Advanced Micro Devices
Advanced Micro Devices, Inc engages in the provision of semiconductor businesses. It operates through the following segments: Computing & Graphics, and Enterprise, Embedded and Semi-Custom. The Computing and Graphics segment includes desktop and notebook processors and chipsets, discrete and integrated graphics processing units, data center and professional GPUs and development services.Read More 

Current Price: $105.80
Consensus Rating: Buy
Ratings Breakdown: 20 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $109.56 (3.6% Upside)

#5 - 3M Corporation (NYSE:MMM)

3M logo

Prior to the Covid-19 pandemic, the stock of 3M Corporation (NYSE: MMM) was not a good buy. The stock had dropped 31% from its all-time high set in January 2019 to the beginning of 2020. However, the company was unquestionably a pandemic winner as it helped supply personal protective equipment.

3M stock is currently trading near its 52-week high as well as its consensus price target. However, since the company released earnings in late July, MMM stock has received several boosts to its price target. And now the stock is delivering one of the strongest Return on Equity (ROE) ratios among cyclical stocks. ROE is a measure of how efficiently a company puts its capital to use.

To that end, the company reported that it returned $1.4 billion to shareholders. This took the form of dividends and share repurchases. And speaking of its dividend, 3M has increased its dividend in each of the last 59 years making it part of the elite Dividend King club.

About 3M
3M Co is a technology company, which manufactures industrial, safety and consumer products. It operates through the following segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. The Safety and Industrial segment consists of personal safety, industrial adhesives and tapes, abrasives, closure and masking systems, electrical markets, automotive aftermarket, and roofing granules.Read More 

Current Price: $181.04
Consensus Rating: Hold
Ratings Breakdown: 2 Buy Ratings, 6 Hold Ratings, 4 Sell Ratings.
Consensus Price Target: $195.92 (8.2% Upside)

#6 - Costco (NASDAQ:COST)

Costco Wholesale logo

Costco (NASDAQ: COST) was one of the biggest winners throughout 2020. As the company’s loyal membership dutifully filled their carts and their pantries, shares of COST stock soared 29% from its pandemic low until the end of 2020.

And Costco stock is up another 19% in 2021 despite suffering a steep selloff in March. The company does face some headwinds. First, the economy is reopening which may change consumers' shopping habits. And second, Costco consumers are seeing the effect of inflation in the groceries they purchase. However, one of the strengths of Costco is its membership fee. And the company still has high member retention.

Six analysts have boosted their price target on COST stock since the company last reported earnings. And one of those analysts, Loop Capital, gives the company a $500 price target. And even if the company doesn’t quite achieve that rate of growth, it still delivers a safe dividend that it has increased each year for the last 16 years.

About Costco Wholesale
Costco Wholesale Corp. engages in the operation of membership warehouses. Its product categories include food and sundries, hardlines, fresh foods, softlines, and ancillary. It operates through the following segments: Unites States Operations, Canadian Operations, and Other International Operations. The company was founded by James D.Read More 

Current Price: $467.75
Consensus Rating: Buy
Ratings Breakdown: 14 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $447.35 (4.4% Downside)

#7 - Sysco (NYSE:SYY)

Sysco logo

The foodservice business was one of the hardest-hit sectors during the global pandemic. While some restaurants are open, there are many that remain shut. But for many schools and entertainment venues, 2020 was a complete washout. The Delta variant is causing some jitters, but it appears unlikely that there will be more extreme mitigation measures.

And that’s bullish for a company like Sysco (NYSE: SYY) who is the global leader in selling, marketing, and distributing food products to venues such as these.  SYY stock has more than doubled since hitting its pandemic low last March. However, the growth has been more muted in 2021, with the stock up just about 10%.

The consensus opinion of analysts is that the stock has another 9% to go, and that may be too low. In the company’s most recent earnings report, it reported that its free cash flow increased by more than 110% year-over-year and the stock is expected to grow at a compound annual growth rate (CAGR) of 22.9% over the next five years.

About Sysco
Sysco Corp. engages in selling, marketing, and distribution of food products to restaurants, healthcare and educational facilities, and lodging establishments. It operates through the following segments: U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other. The U.S. Foodservice Operations consists of U.S.Read More 

Current Price: $80.48
Consensus Rating: Buy
Ratings Breakdown: 5 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $86.88 (7.9% Upside)


In the introduction to this presentation, I noted that 2021 has been a good year for investors who owned equities. Although many threats remain on the horizon, the worst hasn’t emerged. And that is keeping bullish sentiment in stocks high.

However, it hasn’t always been a smooth ride. Investors have cycled back-and-forth between growth stocks and value stocks. Along the way, there have multiple mini bubbles that have fizzled out. Electric vehicles, biotech, even the FAANG stocks have all corrected at one point.

That’s another reason for investors to seek the diversification that comes from cyclical stocks. Many of these stocks won’t provide aggressive stock price growth, but during volatile bull markets like the kind we continue to experience, the diversity of cyclical stocks can provide stability.

Less risk-tolerant investors can look at exchange-traded funds (ETFs) as a way to help add cyclical stocks to their portfolio. One of the top choices is the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (NYSEARCA:RCD), an “equal weight” fund which means no one position is more than 1.9% of the entire fund’s holdings

7 Precious Metals Stocks That Will Keep Your Portfolio On Trend

The growing acceptance of cryptocurrency is beginning to make mainstream investors rethink their idea of “store of value.” The trendy possibilities of Bitcoin, Ethereum, and any of the dozens of altcoins that exist on the blockchain are trending like the latest fashion.

However, the thing about fashion is that the more things change the more things stay the same. Just like the simple black dress that won’t go out of fashion, the same can be said for precious metals stocks. One way to think about it would be to say that the existence of a growing cryptocurrency market doesn’t change the value of precious metals.

Precious metals have long been known to be a safe-haven asset in times of market volatility and economic crisis. In fact, during the Covid-19 pandemic, gold prices surged about 30% breaking the $2,000 mark for the first time in its history. This was at a time when the prices of many cryptocurrencies were falling.

And precious metals have also been seen as a hedge against inflation, which seems like more of a certainty with the Federal Reserve’s pledge to keep interest rates at historically low rates into 2023.

Whether you’re looking to take your first steps at crafting a precious metals portfolio or if you want to fine-tune the one you have, we believe this special presentation is a good place to start your research. We’ve identified seven precious metals stocks that look to retain their allure in 2021.

View the "7 Precious Metals Stocks That Will Keep Your Portfolio On Trend" Here.


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