Summer has officially begun and it is already a scorcher. Only a few days into the official start of summertime and most of the U.S. is sweltering under a record breaking heat wave. Climatologists are forecasting that 2024 is likely to be the hottest year on record with triple digit temperatures expected to persist throughout the summer months.
Beating the heat and making the most of the warm weather looks like it will preoccupy most of us over the next few months. But while stifling heat can be difficult to manage, certain companies and their stocks thrive when temperatures soar. A lot of businesses see their sales and profits rise along with the mercury in a thermometer.
Pool Corp. (POOL)
Based in Louisiana, Pool Corp. (NASDAQ:POOL) is the largest manufacturer of swimming pools and the equipment needed to operate them in the world. And, believe it or not, Pool Corp. has been one of the 10 best performing stocks of the past 30 years. POOL stock has achieved an annualized return of 24.6% since 1994. That trounces the returns of nearly every other stock, including most high-growth technology stocks.
More recently, POOL stock has struggled. The share price peaked in 2021 during the pandemic when Americans were ordering pools for their backyards at a record pace and Pool Corp.’s sales were going through the roof. But over the past few years, sales have moderated to more normal levels and the stock has pulled back as a result. In the last 12 months, POOL stock has declined 4%.
However, the shares are trading at a reasonable price-earnings ratio of 26 times future earnings estimates. And the stock pays a quarterly dividend of $1.20 a share, giving it a yield of 1.42%. This is definitely a top summer stock pick.
Camping World (CWH)
Nothing like enjoying the outdoors while camping or hitting the road in a recreational vehicle (RV) during the summer months. And for that we have Camping World (NYSE:CWH). Headquartered in Illinois, it claims to be the world’s largest supplier of RVs and camping supplies. Like Pool Corp., Camping World is one of the best stocks to own during the hot summer months when the company’s sales tend to spike.
Having held its initial public offering (IPO) in 2016, CWH stock is down 19% since then. Camping World’s stock also peaked in 2021 during the depths of the pandemic when people were buying RVs in record numbers. Since then, the company and stock have struggled as sales have dropped off. That said, the dividend paid by Camping World makes the stock worth considering.
CWH stock currently pays a dividend of 28 cents a share, giving it a monster yield of 6.16%. The company actually cut its dividend at the start of this year to focus capital on growth, but the yield is still huge.
Six Flags (SIX)
Summer is a great time to take the kids to an amusement park. And Six Flags (NYSE:SIX) is one of the best options. The company owns the most theme parks and waterparks combined of any amusement-park company in the world. Six Flags currently operates more than 25 properties across North America, including amusement parks and water parks. More than 30 million people a year visit a Six Flags property.
Unlike the other names on this list, SIX stock has been on the rise this year. Since January, the company’s share price has risen 28% and the stock is currently trading at a 52-week high. Sentiment is positive as Six Flags merges with Cedar Fair (NYSE:FUN) in an $8 billion deal. After the deal closes on July 1 of this year, the merged amusement park companies will retain the Six Flags name but trade under the ticker symbol “FUN.”
Six Flags has announced that it plans to pay a special dividend of $1.53 a share on July 1 (to shareholders of record on June 28) once the Cedar Fair merger closes. It will be the first dividend of any kind from Six Flags since March 2020 when the pandemic hit and its amusement parks were forced to close.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
