What Stocks Go Up During Hurricane Season?

Florida has been in the eye of a few catastrophic storms, from Hurricane Helene to Milton most recently to Wilma and Katrina in the past. 

While the human cost and devastation to homes can’t be counted, the economic toll can be tallied. And as rebuilding takes place, many companies benefit from the reconstruction efforts.

So what stocks go up during hurricane season? Typically, utility and building, materials and repair companies go up during hurricane season because they are direct beneficiaries of investment to repair broken power lines and building damage.  

Utilities are directly involved in restoring power and repairing infrastructure damaged by hurricanes. Companies with strong storm-response capabilities often see a surge in demand for their services. For example, NextEra Energy is a major utility company in Florida, which is often affected by hurricanes. Another popular stock, historically, during hurricane season is Duke Energy, which operates in hurricane-prone regions, particularly in the southeastern United States.

The reason you see building, materials and repair stocks pop is because there’s usually a massive need for rebuilding homes, infrastructure, and commercial properties that drives demand for materials like lumber, cement, roofing, and steel, as well as construction services.

Stocks that have historically done well at these times include Home Depot (HD) and Lowe’s (LOW) because higher demand for construction and rebuilding materials following hurricanes boosts sales. Similarly, Vulcan Materials (VMC) which provides construction aggregates, such as crushed stone and gravel that are essential for rebuilding infrastructure, often enjoys tailwinds in the stock market.

So are there other stocks that benefit?

Surprisingly, Insurance Companies Often Win

Insurance companies don’t spring to mind as immediate beneficiaries since their on the hook for damage but remarkably they are long-term winners.

While insurance companies often initially suffer due to high claims from hurricane damage, they subsequently adjust their premiums and coverage policies in affected areas in order to allow them to recover losses and even increase revenue in the long term.

Stocks like Warren Buffett favorites, Chubb Limited (CB) are winners long-term. It’s a global insurer with strong risk management capabilities. So too, Allstate (ALL) which is known for its significant market share in homeowner’s insurance. We should highlight that while these stocks often dip short-term they often end up doing phenomenally longer-term.

Generators and Backup Power Providers

Other winners are providers of generators and backup power providers because power outages during hurricanes spur demand for backup generators and related services.

What stocks in particular serve this market? One leader is Generac (GNRC), a leading manufacturer of backup generators that historically has seen increased sales whenever hurricanes threaten major power grids.

Another is Eaton Corporation (ETN) because it provides power management solutions, including backup power systems, which can see increased demand.

What else wins?

Retail and Grocery Chains

Prior to hurricanes, consumers tend to stock up on essential goods like food, water, and emergency supplies, leading to a short-term surge in sales for retail and grocery chains.

All the well-known retail stocks you know of tend to be winners in this category, whether it’s Walmart, one of the largest retailers in hurricane-prone areas or Costco that generally sees increased demand for bulk purchases of essential goods during hurricane preparations.

Oil & Gas Companies 

While less of a slam dunk winner when hurricanes hit, oil and gas companies can be on the receiving end of buyer demand in the stock market. That’s because hurricanes often disrupt oil production in the Gulf of Mexico, reducing supply, which can lead to a temporary rise in oil prices. Refiners and gas station operators may benefit from higher margins as a result.

You’ll often find the big names like ExxonMobil (XOM) and Chevron (CVX), both of whom have significant operations in the Gulf of Mexico as well as Valero Energy (VLO), a major oil refiner, wins as it benefits from refinery shutdowns in the region leading to increased margins for active refineries.

Telecom and Cable Companies

Telecom and cable companies frequently do well also because storms disrupt communications, and there is, more often than not, a need to repair or upgrade telecommunications infrastructure.

People also increasingly rely on internet and mobile connectivity during natural disasters so stocks like AT&T (T) and Verizon (VZ) that are providers of essential communication services during and after natural disasters do well.

Another winner is Comcast (CMCSA) because it benefits from increased demand for internet services as more people shift to working remotely due to storm damage.

Waste Management & Debris Removal

When hurricanes cause widespread destruction, demand for waste removal and cleanup services runs rife and that’s where stocks like Waste Management (WM) step in and win business. Not only is it a long-term hold of Bill Gates but it’s one of the largest waste disposal and environmental service companies, which typically sees a surge in activity after storms.

Another key player in waste management is Republic Services (RSG), particularly in hurricane-prone regions.

Logistics and Shipping Companies

Somewhat surprisingly maybe is that logistics and shipping firms do well typically after hurricanes. That’s because there is often increased demand for shipping supplies and relief goods to affected areas.

What stocks fall into this category? FedEx (FDX) and UPS (UPS), both of whom see increased demand for logistics services in the wake of hurricanes.

Agriculture and Water-Related Stocks

Finally, agriculture and water-related stocks are beneficiaries because hurricanes tend to disrupt agricultural production, leading to temporary supply constraints. Companies providing water management solutions may also see increased demand due to flooding.

In this category are companies like Monsanto (MON) (now part of Bayer), which is known for its agricultural products, hurricanes can lead to increased demand for their products post-storm. So too Xylem (XYL) that specializes in water technology, which becomes critical when managing floodwaters or disrupted water systems.

---

The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.