The Top Hurricane Stocks to Own Now

Nov 07, 2022
Palm trees blowing in the wind and rain as a hurricane approaches a tropical island coastline

Hurricane season is still wreaking havoc.

After Hurricane Ian ran through Florida in late September, the state may have to contend with another one.  Hopefully, it won’t be as severe.  Right now, we know “Nicole” is a subtropical storm that could become a hurricane over the Bahamas before hitting Florida’s east coast.

“Unfortunately, this is going to be a very large storm, with a very large wind field on the north side. This is going to cause quite substantial surf, potentially dangerous storm surge somewhere along the Florida east coast, and heavy rainfall and probably significant winds over a large area,” said hurricane specialist Phillipe Pain, as quoted by the Associated Press.

While the Atlantic Hurricane season isn’t too active in November, we were thrown a few curveballs this time around.  On Halloween, there was Hurricane Lisa.  Then, Hurricane Martin became a major storm.  Now there’s Nicole.

However, while we can’t stop hurricanes, we can profit from them.

Generac Holdings (GNCR)

GNRC is a $6.14 billion leader in power generation equipment and other light-motor equipment for residential and industrial customers. The company is the market leader in home standby generators and the leading global manufacturer of mobile generators for industrial use.  Beyond the physical damage to homes and businesses, one of the biggest inconveniences of a powerful storm is electrical outages. 

GNRC has a history of running higher around the beginning of the hurricane season. For the 2019 hurricane season, for example, it ran from about $54 to $100.  For 2020, it ran from about $125 to $363.  In 2021, GNRC ran from about $321 to $410.  This year, we’re hoping it can do something similar from severely oversold conditions.

Home Improvement Stocks

Typically, investors bid up Home Depot (HD) and Lowe’s (LOW) since they historically stand to benefit from increased sales of plywood and other home improvement goods.  This segment is “naturally positively exposed to preparation and recovery efforts,” says Morgan Stanley.  These “typically see a boost in sales post-storm as damaged property is repaired.”

Xylem Inc. (XYL)  

It’s a global leader in water services, including testing, treating and transportation. When a massive storm hits, floodwaters can overwhelm public drinking water and mean large government contracts for making the water safe again.  XYL also has a history of running during hurricane seasons.  In 2019, for example, it ran from about $76 to $79.  In 2020, it ran from about $69 to $80.  In 2021, it ran from about $117 to $134.