Investor Alert

New York Markets Close in:

May 19, 2021, 12:03 a.m. EDT

4 Consumer Cyclical Stocks To Watch In The Stock Market Now

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

or Cancel Already have a watchlist? Log In

May 19, 2021 (StockMarket.com via COMTEX) -- Are These The Best Consumer Cyclical Stocks To Buy In The Stock Market Today?

Consumer cyclical stocks have been on the rise lately in the stock market . This should not come as a surprise as this category of stocks relies heavily on the business cycle and economic conditions. It includes industries such as automotive, housing, entertainment, and retail. As the name suggests, consumer spending would dictate the performance of the company. And consumer spending is affected by economic factors such as interest rates, inflation, unemployment, and wage growth. So with the economy recovering, this puts consumer cyclical stocks back on the radar of investors.

You can see this in the stock performance of companies such as Home Depot Inc ( NYSE: HD ) and McDonald's Corp ( NYSE: MCD ). Since March, both stocks have been on an upward trend. On one hand, HD stock has been up by over 20% within this short period. On the other hand, MCD stock has risen by over 10% as well. Hence, cyclical stocks are viewed as more volatile than non-cyclical stocks, which tend to be more stable during periods of economic weakness. However, they offer greater potential for growth because they can outperform the market during periods of economic strength. So, if this fits your investment appetite, here are four of the best consumer cyclical stocks in the stock market today.

Top Consumer Cyclical Stocks To Watch Now

Dillard's, Inc

To kick off the list, we have the retail giant Dillard's. The company is a retailer of fashion apparel, cosmetics, and home furnishing. As of January 30, 2021, the company operated 282 Dillard's stores, including 32 clearance centers, and an Internet store. The company focuses on delivering style, quality, and value to its customers from both national and exclusive brand sources.

When looking at the DDS stock, it is hard to argue against its excellent performance over the past year. The stock has risen over a staggering 550% during this period. In fact, the stock price rose by almost 50% just in the past week. Now let us dive deeper as to why this is happening.

Last Friday, Dillard's announced its first-quarter earnings. In comparison to the same quarter of the prior year, total retail sales increased by 73%. It also boasted a net income of $158.2 million compared to a net loss of $162.0 million. Finally, the company ended with cash of $616 million compared to $70 million. As vaccinations increased, stimulus money was released and warmer weather arrived. Dillard's may see improved sales over the 2019 levels, with momentum continuing throughout the quarter. Given how impressive its financials are, would DDS stock be worth investing in?

[Read More] Top Biotech Stocks To Buy Right Now? 3 For Your Watchlist

eBay Inc

Next, we have the global commerce company, eBay. The company's technology allows sellers worldwide to offer their inventory for sale virtually anytime and anywhere. eBay's platforms are accessible through a traditional online experience, mobile devices, and its application programming interfaces (APIs). Hence, consumers could easily access its platform as long as they have access to the internet.

Earlier this month, the company announced that it will be letting sellers in Canada receive payouts in U.S. dollars. Canadian sellers by invitation will be able to register for this program and choose the payout option that best suits the needs of their business. This is significant as many Canadian eBay sellers do a majority of their business on eBay.com. The change impacts sellers enrolled in Managed Payments.

On top of that, eBay also announced the possibility of accepting cryptocurrency as a form of payment in the future. Clearly, the company is aware of newer forms of payments and taking steps to keep up with the trend. Also, eBay will be allowing consumers to purchase non-fungible tokens (NFTs) on its broad online marketplace. This reflects an expansion of eBay's digital collectibles business, in line with the increasing popularity of NFTs this year. With that in mind, would EBAY stock be a sound investment?

Read More

1 2
This Story has 0 Comments
Be the first to comment

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.