In the vast ecosystem of the stock market, cyclical stocks occupy a significant role that’s closely entwined with the rhythms of the broader economy. These are stocks of companies whose fortunes ebb and flow with the health and trajectory of the overall economic landscape. Simply put, cyclical stocks are like ships that rise with the tide of a thriving economy, and similarly, when the economic waters recede, these stocks are often the ones to feel the contraction first.
Companies in sectors such as automotive, housing, travel, and luxury goods generally fall into the cyclical category. They tend to do well when consumers have disposable income to spend and confidence in their financial future. Conversely, during economic downturns when consumers tighten their belts, these companies often see their profits shrink. Therefore, investing in cyclical stocks requires an understanding of the broader economic picture, as well as a degree of patience and risk tolerance. That said, let’s look at three cyclical stocks trending in the stock market today.
Cyclical Stocks To Buy [Or Avoid] Right Now
- Caterpillar Inc. (NYSE: CAT)
- Boeing Co. (NYSE: BA)
- Marriott International Inc. (NASDAQ: MAR)
Caterpillar (CAT Stock)
Starting off, Caterpillar (CAT) is a global manufacturer of heavy machinery and engines. Its products are used in various sectors, such as construction, mining, and energy, which makes it highly susceptible to the ups and downs of the global economy.
Earlier this month, Caterpillar announced that its Board of Directors has approved raising its quarterly dividend. In detail, the company said it will increase this quarter’s dividend by $0.10, which represents an 8% increase, to $1.30 per share on common stock. Additionally, the dividend is payable on August 18, 2023, to shareholders of record on July 20, 2023.
In the last month of trading, shares of CAT stock have gained by 11.88%. Meanwhile, during Monday morning’s trading session, CAT stock is trading up 1.15% so far by $237.13 a share.
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Boeing (BA Stock)
Next, Boeing (BA), a global aerospace giant, manufactures commercial jetliners and defense, space, and security systems. Its business is heavily influenced by the health of the airline industry, making it a cyclical stock.
Just earlier this month, Boeing announced its estimated demand for new commercial jets over the next two decades. In detail, as global travel resumes with international flights picking up and domestic air travel returning to the levels seen before the pandemic, the company estimates that the world will need 42,595 new commercial jets by 2042, representing a value of $8 trillion.
Looking at the last month of trading action, shares of BA stock have increased modestly by 0.75%. While, during Monday morning’s trading session, BA stock is trading at $205.16 a share.
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Marriott International (MAR Stock)
Lastly, Marriott International Inc. (MAR) is a global player in the hospitality sector, operating a broad portfolio of hotels and lodging facilities across different price points. The company boasts a vast network of properties spread across various countries, offering a range of services from luxury accommodations to budget-friendly stays.
Last month, Marriott International announced that its board of directors has made the decision to increase its quarterly cash dividend by 30%. The dividend, which was previously $0.40 cents per share, will now be $0.52 cents per share. Those who were shareholders as of May 26, 2023, will receive this increased dividend on June 30, 2023.
Over the last month of trading action, shares of MAR stock have fallen by 2.13%. Meanwhile, on Monday, Marriott stock is trading at $157.42 a share.
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