While winter doesn’t officially start for another month or so, someone forgot to inform Mother Nature.
On Monday, snowfall was covering 50% of the U.S., “an unusually high percentage for mid-November,” according to Jeff Masters, co-founder of weatherunderground.com. Some unlucky folks in Montreal, Wisconsin, a town of 798, experienced some 50 inches of snow in just four days’ time last week.
We’ve started to see some severe weather, and more’s on the way for coming months. According to the Climate Prediction Center, several large swaths of the country could see wetter winters than average, colder winters than average or both. For many Americans that simply means it’s time to bundle up and prepare for the wintry onslaught, but for others it forebodes both proactive and reactive purchases in the months to come.
That’s great news for these companies with seasonally popular products and services. Here are five stocks to buy for a frigid winter:
Winter Stocks to Buy: Compass Minerals International, Inc. (CMP)
Compass Minerals International, Inc. (CMP) is one of the largest providers of highway salt in the U.S.
I think you see where I’m going with this.
Last winter, which was notoriously cold and even took the brunt of the blame for slower-than expected economic growth, was so harsh that many cities across the U.S. started running out of road salt. CMP stock should benefit if these same cities learn from their hubris and pony up the dough for some sodium chloride.
Compass actually is a solid dividend stock as well, dealing out 60 cents per quarter for a respectable current yield of 2.7%. Moreover, CMP has increased its dividend in each of the past 10 years, so it’s got some solid dividend growth behind it, too.
Winter Stocks to Buy: Columbia Sportswear Company (COLM)
Columbia Sportswear Company (COLM) is another clear-cut winter-weather play, as the outdoor apparel company is known for its quality jackets, vests and other winter accessories. Columbia is a favorite brand of skiers, mountain climbers and other outdoorsy types, so COLM stock should benefit from its dual popularity with its original niche target market and the common consumer.
While COLM stock’s 5.5% gains have underperformed the 10.8% return of the S&P 500 pretty handily in 2014, the company underwent a 2-for-1 stock split in September that made COLM shares more affordable to individual investors.
Meanwhile, it’s on a heck of a run of late, ripping off nearly 20% gains in the past month to double the S&P 500.
Winter Stocks to Buy: The Toro Company (TTC)
Most Americans have probably never heard of The Toro Company (TTC), but it makes a critical product for the modern winter landscaper: the snowblower.
Toro is pretty widely diversified, selling agriculture products, golf equipments, yard tools and more, and added to its line in October by acquiring the Boss professional snow and ice management business from Northern Star Industries.
The purchase doubles down on TTC’s exposure to winter weather solutions. Boss sells snowplows and is a perfect complement to Compass Minerals’ highway salt business; Boss also sells salt spreaders and related accessories for vehicles.
TTC stock is slightly in the red year-to-date, but like COLM, it’s heating up just as the weather is cooling down — Toro shares are up 9% in the past month.
Winter Stocks to Buy: Jarden Corp (JAH)
Jarden Corp (JAH) is the largest hard-goods sporting equipment company in the world, and owns more than 120 brands globally. That includes a number of outdoor leisure products and winter sports products like skis, snowboards, sleeping bags and tents.
There’s no more appropriate time to load up on skis than the winter, and with quality brands like K2 and Marker to its name, investors will be praising JAH stock this winter. JAH stock beat both sales and earnings estimates in its most recent quarter, helping to drive 15% returns in the past month.
That just continues a torrid run for JAH stock, which has run up 240% since the beginning of 2012 and is about to undergo its second 3-for-2 stock split in as many years.
Winter Stocks to Buy: Netflix, Inc. (NFLX)
Netflix, Inc. (NFLX) is probably the least intuitive of the companies on this list, but stay with me for a second.
Imagine a winter storm hits your area. Schools are out, most businesses are closed, and most workers find themselves with a day or two off. Assuming your power’s still on, there are only so many things to do in the confines of a snowed-in house.
I’ll bet Netflix sees a tidy surge in traffic those days as people test out those free 30-day trials … and then lands a few more subscribers willing to dole out the $8.99 monthly subscription fee.
Mark Cuban noted last month that NFLX stock has a lower market capitalization than Twitter Inc (TWTR) and said he was buying NFLX shares in hopes of an acquisition. While I wouldn’t encourage speculating on acquisitions, Netflix is a great business in and of itself with a lot of runway left for the streaming video company to gain traction overseas.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid.