Hurricane season is right around the corner. The NOAA Climate Prediction Center predicts higher than normal activity this hurricane season. The Atlantic Ocean will be quite chaotic in the months ahead, yet that does not mean the uptick in activity lacks a silver lining.
Investors can benefit from the increase in hurricanes by investing appropriately. This is the perfect time to invest in home improvement stocks, emergency-related stocks, and possibly some home construction stocks.
Without further ado, let's take a look at three of the top hurricane-related stocks to buy and hold through the active storm season ahead: Generac Holdings (GNRC), Home Depot (HD), and Lowe's Companies (LOW).
Generac Holdings (GNRC)
GNRC makes power generation equipment, power products, and energy storage systems. GNRC generators are used by homeowners and businesses alike. These power providers have the potential to be lifesavers when hurricanes strike.
GNRC has an overall grade of B, which translates into a Buy rating in the POWR Ratings system. The stock has a grade of A in the Quality and Momentum components and a grade of B in the Sentiment and Growth components. Click here to find out how GNRC fares in the Value and Stability components. Of the 86 publicly traded companies in the Industrial - Machinery industry, GNRC is ranked 44th. You can find other top stocks in this industry by clicking here.
GNRC has a forward P/E ratio of 33.47, indicating it is a bit overpriced. However, GNRC has a low beta of 0.90, so it will fluctuate less if the market turns into a roller coaster. Stifel Nicolaus analysts raised their target price on the stock from $213 up to $340. The upgrade was made in response to GNRC's strong quarterly earnings. GNRC executives are predicting upwards of 30% sales growth in the year ahead, equating to more than $3 billion in sales. Wall Street analysts initially anticipated $2 billion in sales for the full year.
Home Depot (HD)
HD, one of the country's top home improvement stores, has an overall grade of B, which is a Buy rating in the POWR Ratings system. The stock has a grade of A in the Momentum component and a grade of B in the Quality and Sentiment components. Investors who would like to learn more about how HD fares in the Value, Stability, and Growth components can do so by clicking here.
Of the 63 stocks in the Home Improvement & Goods industry, HD is ranked 27th. You can find other top-ranked stocks in this industry by clicking here. Analysts are bullish on HD, setting an average target price of $342 and change. If HD rises to this level, it will have popped by 8%.
The average price target for the stock is up nearly $38 across the past 166 days alone.
Of the 38 analysts who cover HD, nine rate it a Strong Buy, and seventeen rate it a Buy. HD has a reasonable forward P/E ratio of 22.94, considering it is not far away from its 52-week high of $345.69. The stock also has a low beta, so it won't undulate much should the market get rocky.
Lowe's Companies (LOW)
LOW is one of the top home improvement retailers in the world. The company has been in business for70+ years. The majority of LOW operations are in the United States and Canada. LOW has a forward P/E ratio of 18.11, meaning it is undervalued at $191 per share. LOW is currently trading within $25 of its 52-week high of $215.22.
LOW has an overall grade of B, translating into a Buy rating in the POWR Ratings system. It has a grade of A in the Momentum and Sentiment components and a grade of B in the Quality component. Click here to find out more about how LOW grades out in the rest of its components.
Of the 63 publicly traded companies in the Home Improvement & Goods space, LOW is ranked 13th. Analysts have high hopes for LOW, setting an average target price of $227.62 for the stock. If LOW hits this figure, it will have popped by more than 17%.
GNRC shares were unchanged in premarket trading Friday. Year-to-date, GNRC has gained 39.13%, versus a 12.89% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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