Cyclical stocks are companies whose performance is linked to the business cycle. When the economy is booming, cyclicals tend to do well as demand for their products and services increases. However, when the economy slows down, cyclicals can be among the hardest hit as consumers tighten their belts.
In addition, cyclical stocks include a wide range of companies, from retailers to automakers. As a result, they can be volatile investments, but for investors with a long-term time horizon, they can offer the potential for sizable returns. Cyclicals tend to outperform the market in the early stages of an economic recovery, making them an attractive option for investors who are looking to take advantage of rising prices. However, they can also be among the first to feel the effects of a downturn, so it’s important to monitor them closely. With this in mind, here are three cyclical stocks to watch in the stock market today.
Cyclical Stocks To Invest In [Or Avoid] Now
- Vale S.A. (NYSE: VALE)
- Pioneer Natural Resources Company (NYSE: PXD)
- The Coca-Cola Company (NYSE: KO)
1. Vale S.A. (VALE Stock)
Starting off the list, Vale S.A. (VALE) is a global mining company headquartered in Brazil. In short, Vale is the world’s largest iron ore producer and exporter, as well as the second-largest nickel producer. Vale also produces copper, cobalt, manganese, and other metals and minerals. The company operates mines in Brazil, Canada, and Indonesia, among others worldwide.
VALE Recent Stock News
Back in July, Vale S.A. announced its 2nd quarter of 2022 financial results. In detail, the mining company reported second-quarter 2022 earnings of $0.88 per share, with revenue of $11.2 billion. This is a comparison with analysts’ consensus earnings estimates for Q2 2022, which were $0.81 per share, along with revenue of $13.7 billion. What’s more, the company reported that its nickel sales were relatively in line quarter over quarter, outpacing production by approximately 13%. This is attributed to the inventory strategies the company implemented in the first quarter.
Furthermore, Eduardo Bartolomeo, Chief Executive Officer. at Vale commented, “With the substantial reshaping of our business, such as the sale of the Midwestern System, the company is much better prepared to deliver on its production recovery agenda. We stay committed to a disciplined capital allocation and to generating and returning value to our shareholders, as further evidenced by the announcement to pay US$ 3 billion in dividends.”
VALE Stock Chart
So far in 2022, shares of VALE stock are up over 4%, outperforming the broader markets. Meanwhile, during Thursday’s afternoon trading session VALE stock is trading at $14.40 per share.
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2. Pioneer Natural Resources (PXD Stock)
Next, Pioneer Natural Resources Company is one of the largest independent oil and gas exploration and production companies in the world. In brief, Pioneer’s primary operations are in the Permian Basin in West Texas. For a sense of scale, as of year-end 2021, the company’s proven reserves were 2.2 billion barrels of oil equivalent with net production for the year of 612 mboe per day. Currently, PXD shareholders enjoy an annual dividend yield of 9.93%.
PXD Recent Stock News
In August, Pioneer reported a beat for its second quarter 2022 financial results. Diving in, the company posted 2nd quarter 2022 earnings of $9.36 per share, with revenue of $6.9 billion. In addition, PXD reported a revenue increase for Q2 2022 of 102.4% during the same period, in 2021. Also, the company notched in the second quarter free cash flow of $2.7 billion.
Chief Executive Officer Scott D. Sheffield stated, “Pioneer is focused on developing our top-tier assets, driving best-in-class margins and delivering the highest free cash flow per barrel oil equivalent produced. Our differentiated investment framework strategy generated $2.7 billion of free cash flow during the second quarter, with greater than 95% of the free cash flow being returned to shareholders through our base-plus-variable dividend and opportunistic share repurchases.“
PXD Stock Chart
So far in 2022, shares of PXD stock are up over 37% as of Thursday afternoon’s trading session at $256.46 a share.
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3. Coca-Cola Company
Lastly, The Coca-Cola Company is the world’s largest beverage company. Coca-Cola manufactures and distributes a wide portfolio of different brands of non-alcoholic beverages, including carbonated soft drinks, juices, teas, coffees, and sports drinks. Coca-Cola also owns a minority stake in Monster Beverage Corporation, the largest energy drink company in the United States.
KO Recent Stock News
At the end of last month, Coca-Cola Company announced that they will be releasing the 3rd Quarter of 2022 financial results on Tuesday, October 25, 2022, before the market opens. In the meantime, let’s do a quick recap of how the company performed in the second quarter of 2022.
For the 2nd Quarter of 2022, Coca-Cola posted earnings per share of $0.70 on revenue of $11.3 billion. What’s more, in the second quarter, Coca-Cola estimated fiscal 2022 earnings of $2.44 to $2.46 per share. Needless to say, investors could be paying close attention to Coca-Cola Company ahead of its Q3 2022 financial results.
KO Stock Chart
Aside from that, on Thursday afternoon, shares of KO stock are trading at $55.18 per share. Meanwhile, Year-to-date Coca-Cola stock is down 6.95%, which is still outperforming the broader markets so far in 2022.
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