Cyclical stocks are a type of investment that tend to rise and fall with the ebbs and flows of the economy. These stocks are usually tied to industries that are highly dependent on consumer spending, such as automobiles, housing, and retail. Cyclical stocks can be a great way to make money in the stock market, but they can also be very risky.
What Are Cyclical Stocks?
As we mentioned before, cyclical stocks are a type of investment that is tied to the ebbs and flows of the economy. These stocks usually come from industries that rely heavily on consumer spendings, such as automobiles, housing, and retail. When the economy is doing well and consumers have extra money to spend, cyclical stocks tend to do well. However, when the economy slows down and consumers start tightening their belts, these same stocks tend to suffer.
Why Invest In [Or Avoid] Cyclical Stocks?
Despite the inherent risks associated with cyclical stocks, there are still many reasons why investors choose to put their money in these types of companies. First of all, cyclical stocks have the potential to make a lot of money when the economy is doing well. This is because these companies tend to do very well when consumers have extra money to spend. Additionally, cyclical stocks tend to be very volatile, which can lead to higher returns for investors who are willing to take on more risk.
Cyclical stocks can be a great way to make money in the stock market, but they can also be very risky. If you’re thinking about investing in these types of companies, it’s important to understand both the risks and rewards involved. Additionally, you should only invest in cyclical stocks if you’re comfortable with taking on more risk. With that, here are two top cyclical stocks to watch in the stock market for October 2022.
Cyclical Stocks Mentioned In This Article
1. The Home Depot (HD Stock)
Leading off today, The Home Depot Inc. (HD) is one of the largest home improvement retailers in the United States. Home Depot offers a wide variety of products and services for home improvement, including appliances, tools, hardware, building materials, and more. Home Depot also offers financing options for customers who wish to finance their purchases. For a sense of scale, the company is the largest home improvement retailer in the U.S. with over 2,316 retail stores. Currently, Home Depot has an annual dividend yield of 2.60%.
HD Recent Stock News
In August, Home Depot reported a beat for its second-quarter 2022 financial results. Diving in, the company announced earnings of $5.05 per share, with revenue of $43.8 billion for Q2 2022. This is compared to the street’s consensus estimates for the 2nd quarter, which was earnings of $4.95 per share, with revenue of $43.4 billion. Moreover, Home Depot notched in a 6.5% increase in revenue on a year-over-year basis.
Aside from that, HD reaffirmed its full-year 2022 outlook. In detail, the company said they continue to expect fiscal 2023 earnings of approximately $16.31 per share on revenue of $155.69 billion.
HD Stock Chart
In the last month of trading, shares of HD stock is up over 2.35%. Meanwhile as of Thursday’s closing bell, Home Depot stock is trading at $282.83 a share.
[Read More] 3 Growth Stocks To Watch In October 2022
2. Chipotle Mexican Grill (CMG Stock)
Next, let’s take a look at the consumer cyclical company Chipotle Mexican Grill (CMG). Chipotle Mexican Grill is a popular restaurant chain that offers a fast-casual dining experience. The menu features a variety of Mexican-inspired dishes, including burritos, tacos, and salads. Chipotle is known for its fresh ingredients, and all of its food is made to order. For a sense of scale, the company is the largest home improvement retailer in the U.S. with over 2,316 retail stores. Currently, Home Depot has an annual dividend yield of 2.60%.
CMG Recent Stock News
Back in July, CMG released its second quarter 2022 financial results. Getting straight to it, Chipotle reported second-quarter 2022 earnings of $9.30 per share and revenue of $2.2 billion. This was compared to Wall Street’s consensus estimates, which was earnings of $9.03 per share, with revenue of $2.2 billion. Additionally, the company reported a revenue increase of 17% during the same period, in 2021.
Brian Niccol, Chairman, and CEO, of Chipotle, commented, “We are pleased with our second quarter performance during a period of inflation and consumer uncertainty. Our pricing power and value proposition remain strong as our culinary and food with integrity commitment continues to be a key point of differentiation.”
CMG Stock Chart
Over the last 5 trading days, shares of CMG stock are up 4.90%. As of Thursday’s closing bell, Chipotle stock closed up 2.34% at $1,558.24 a share.
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