Investing

5 Stocks to Buy Now That Usually Thrive in the Summertime

Lee Jackson

Published: June 16, 2017 10:20 am

Last Updated: January 12, 2020 11:00 am

While the unofficial start to the summer season is Memorial Day, the first real day of the new season is next week on June 21. With school out in most parts of the country, families are getting ready for the annual exodus to all points north, south, east and west for fun and vacations. With gas prices low, you can bet that even more families will be hitting the road or the skies for destination vacations.

In addition, many homeowners are getting ready for summer projects to enhance the value and fun of home ownership, and that caters well to the big retailers that fill the needs of gardeners, home repair enthusiasts and more.

We screened our 24/7 Wall St. research database and found a host of top companies that should do great over the next 90 days. Many are rated Buy by the top firms we cover.

Cedar Fair

Plenty of families will be heading to this top company’s theme parks this summer. Cedar Fair L.P. (NYSE: FUN) is an operator of regional amusement parks. As of December 31, 2016, it owned approximately 11 amusement parks, two separately gated outdoor water parks, one indoor water park and five hotels.

The amusement parks include Cedar Point, located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott’s Berry Farm, near Los Angeles, California; Canada’s Wonderland, near Toronto, Canada; Kings Island, near Cincinnati, Ohio; Carowinds, in Charlotte, North Carolina; Dorney Park & Wildwater Kingdom (Dorney Park), in Allentown, Pennsylvania; Kings Dominion, near Richmond, Virginia; California’s Great America, in Santa Clara, California; Valleyfair, near Minneapolis/St. Paul, Minnesota; Worlds of Fun, in Kansas City, Missouri; and Michigan’s Adventure, in Muskegon, Michigan. It also manages and operates Gilroy Gardens Family Theme Park in Gilroy, California.

Investors are paid a very solid 4.8% distribution. Stifel has a Buy rating on the shares and a $78 price target. The Wall Street consensus target is $77.20. The stock closed Thursday at $71.37.

Disney

This company is a top consumer media company with multiple streams of income to push revenue and is also on the Merrill Lynch US 1 list. Walt Disney Co. (NYSE: DIS) stock continues outperforming on a near-term and long-term basis. With the movie studio business poised to improve, as with accelerating theme park business, the network programming continues to drive viewership with extensive sports programming. Combining that revenue growth with the company’s solid media networks and interactive presence, and 2017 revenue estimates could be conservative.

The Disney Media Networks segment operates broadcast and cable television networks, domestic television stations and radio networks and stations, and it is involved in the television production and television distribution operations. Its cable networks include ESPN, Disney Channels and ABC Family, as well as UTV/Bindass and Hungama. This segment also owns eight domestic television stations. Disney is also one of 24/7 Wall St.’s top 10 stocks to own for the next decade.

Families will be flocking this summer to the company’s theme parks, such as Disneyland, Walt Disney World in Orlando, Magic Kingdom Park, Epcot and also the international parks.

Disney shareholders receive a 1.47% dividend. The Merrill Lynch price target for the Buy-rated stock is $134, and the consensus price objective is at $118.07. The shares closed trading Thursday at $105.98.

Home Depot

This company remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself (DIY), do-it-for-me (DIFM) and professional customers.

The company posted strong first-quarter results, and a UBS report said at the time:

For a business the size of Home Depot to put up a 5.5% comp (6.0% in the U.S.) is pretty remarkable, in our view, especially on top of the many years of growth it’s already achieved. The company only needs same-store-sales growth of 4.3% over the next 3 quarters to meet its comp guidance for the year. We think this is attainable, even when considering the $250 million of expected currency pressure (which amounts to 25 bps or 1/4 of 1% of headwinds).

Home Depot shareholders receive a 2.3% dividend. UBS has a $175 price target, and the consensus target is $170.73. The stock closed Thursday at $156.77.

SeaWorld

While this company has changed the way it does shows due to a degree of public outcry, the parks remain a prime summer attraction. SeaWorld Entertainment Inc. (NASDAQ: SEAS) is a leading theme park company that delivers family oriented entertainment through a diversified array of offerings and a focus on animal interaction and education.

The company owns and operates 11 theme parks in the United States, which attract more than 20 million visitors annually. Key brands include SeaWorld (with parks in Florida, California and Texas), Busch Gardens (Florida and Virginia) and Sesame Place (Pennsylvania). Flanker brands include Discovery Cove (Florida), Aquatica (Florida, California and Texas), Adventure Island (Florida) and Water Country USA (Virginia).

The analysts at SunTrust rate the stock a Buy and have a $23 price objective. The consensus target is $20, and shares closed Thursday at $16.49.

Six Flags

This is another theme park giant that is poised to see a host of visitors this summer. Six Flags Entertainment Corp. (NYSE: SIX) is a regional theme park operator, with approximately 19 regional theme and water parks. Its parks occupy approximately 4,500 acres of land and are located in geographically diverse markets across North America. Its parks offer a selection of thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues and retail outlets. They offer approximately 830 rides, including over 135 roller coasters.

Its parks include Six Flags America, Six Flags Discovery Kingdom, Six Flags Fiesta Texas, Six Flags Great Adventure & Safari, Six Flags Hurricane Harbor, Six Flags Great America, Six Flags St. Louis, Six Flags Magic Mountain, Six Flags Hurricane Harbor, Six Flags Mexico and Six Flags New England.

Investors are paid a solid 4.37% distribution. Stifel rates this company a Buy and has a $73 price target. The consensus price target is $68.95. The stock closed most recently at $58.55.

Of course, all these companies do business year round, but the summer brings warm weather and vacation time for families, and that means more business and people through the gates at the big theme parks, and fun never goes out of style.