We recently published a list of 10 Best Hurricane and Natural Disaster Stocks To Buy Now. In this article, we are going to take a look at where Lowe’s Companies, Inc. (NYSE:LOW) stands against other best hurricane and natural disaster stocks to buy now.
The 2024 hurricane season is shaping up to be a highly active one, especially in the North Atlantic. Forecasts suggest that the number of tropical cyclones this year could exceed the long-term average. Although it’s difficult to predict how many storms will make landfall and where they will hit, a higher number of storms increases the chances of multiple landfalls, posing a significant risk to the Gulf of Mexico and Caribbean Sea regions.
Leading research institutes expect approximately 23 named cyclones in the North Atlantic this year, with 11 potentially developing into hurricanes. Of these, five could become severe hurricanes with wind speeds exceeding 110 mph. These estimates are considerably higher than the long-term average observed between 1950 and 2023, which was 12 named storms, 6 hurricanes, and nearly 3 severe hurricanes each season.
Sea surface temperatures in the tropical North Atlantic are currently at record highs, between 0.5 and 1.0°C above the historical average, creating conditions favorable for hurricane development. Furthermore, the natural climate oscillation ENSO (El Niño/Southern Oscillation) is expected to shift to a La Niña phase. This shift typically reduces high-altitude wind shear, which in turn makes it easier for tropical cyclones to develop and intensify.
Given these factors, the likelihood of severe hurricanes making landfall this season is heightened. This means that companies involved in infrastructure, construction, insurance, and emergency response could see increased demand for their products and services. Hurricanes not only cause billions of dollars in property damage but also disrupt various sectors, from utilities and energy to real estate and transportation. Thus, investing in companies that specialize in disaster recovery, property restoration, and related services could be a strategic move.
In this article, we will explore the ten best hurricane and natural disaster stocks to buy now. These companies are well-positioned to benefit from the potential increase in hurricane activity and the demand for services that follow in the wake of natural disasters. Whether through providing emergency equipment, offering insurance coverage, or assisting in rebuilding efforts, these stocks could present an opportunity for investors looking to hedge against the financial impacts of natural disasters.
Sources like Munich Re, the World Meteorological Organization (WMO), and the International Labour Organization (ILO) have provided valuable insights into the 2024 hurricane season, highlighting the increased risks and potential economic impacts. With that in mind, let’s dive into our list of the best stocks to consider for this hurricane season.
Our Methodology
The companies featured in this list are known to experience increased demand following hurricanes and natural disasters. To provide prospective investors with valuable insights, we’ve also highlighted key business fundamentals and analyst ratings for these stocks. Additionally, we reviewed data from approximately 912 elite hedge funds tracked by Insider Monkey during the second quarter of 2024 to determine hedge fund ownership for each company. From this dataset, we selected the top ten stocks most favored by institutional investors and ranked them in ascending order based on the number of hedge funds holding stakes in these firms as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A family excitedly browsing through the aisles of a home improvement retail store.
Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 62
Lowe’s Companies, Inc. (NYSE:LOW), a leading home improvement retailer in the United States, has established itself as a go-to resource for construction, maintenance, repair, remodeling, and decorating products. With a broad array of offerings, ranging from appliances and lawn and garden supplies to tools and building materials, Lowe’s Companies, Inc. (NYSE:LOW) serves both professional customers and homeowners alike. The company’s strong position in the market, coupled with its resilience in navigating challenging economic conditions, makes it a compelling addition to the list of hurricane and natural disaster stocks to consider.
In its Q2 2024 earnings call, Lowe’s Companies, Inc. (NYSE:LOW) reported an impressive earnings per share (EPS) of $4.10, exceeding analyst expectations of $3.97. Despite facing a 5.1% decline in comparable sales year-over-year, Lowe’s demonstrated resilience through robust online sales growth of 2.9% and strong performance in the Pro segment, reflecting a strategic shift towards professional customers. The company’s proactive approach to expense management and operational efficiency, supported by its Perpetual Productivity Improvement (PPI) initiatives, helped mitigate the impact of softer DIY demand and unpredictable weather events.
Financially, Lowe’s Companies, Inc. (NYSE:LOW) remains on solid ground. The company reported second-quarter sales of $23.6 billion, showcasing its ability to maintain significant revenue levels even amid market fluctuations. The number of hedge fund holders in Lowe’s stock has increased to 62 in Q2 2024, up from 60 in the previous quarter, signaling growing institutional interest in the company. This trend is indicative of confidence in Lowe’s Companies, Inc. (NYSE:LOW) long-term growth potential.
Lowe’s Companies, Inc. (NYSE:LOW) commitment to innovation is also noteworthy. The partnership with tech leaders like Apple and NVIDIA to enhance customer experiences through advanced technologies demonstrates the company’s forward-thinking strategy. The launch of initiatives like MyLowe’s Rewards and expanded delivery options via Uber Eats indicates a keen focus on capturing a digitally savvy customer base.
Overall, Lowe’s Companies, Inc. (NYSE:LOW) presents a compelling investment opportunity within the hurricane and natural disaster sector. The combination of strong financial metrics, a growing customer base, and a strategic focus on technology and innovation positions Lowe’s Companies, Inc. (NYSE:LOW) well for future growth, making it an attractive option for investors seeking stability and potential upside in a volatile market.
Madison Investors Fund stated the following regarding Lowe’s Companies, Inc. (NYSE:LOW) in its Q2 2024 investor letter:
“At home improvement retailer Lowe’s Companies, Inc. (NYSE:LOW), sales continue to be weak. The economic backdrop in housing is particularly interesting at the moment. On one hand, employment levels are healthy and home values remain resilient. On the other hand, housing turnover, which is essentially the number of homes that have been sold relative to the housing stock, is at historically low levels as homeowners are resistant to giving up low mortgage rates on their current home for a higher rate on a new home. Housing turnover is an important business driver for Lowe’s, so the depressed level of activity has weighed on its profits. However, over time we expect it to normalize and Lowe’s performance to improve.”
Overall, LOW ranks 4th on our list of Best Hurricane and Natural Disaster Stocks To Buy Now. While we acknowledge the potential of LOW to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.