We recently published a list of 10 Best Hurricane and Natural Disaster Stocks To Buy Now. In this article, we are going to take a look at where Fluor Corporation (NYSE:FLR) stands against other best hurricane and natural disaster stocks to buy now.
The 2024 hurricane season is shaping up to be a highly active one, especially in the North Atlantic. Forecasts suggest that the number of tropical cyclones this year could exceed the long-term average. Although it’s difficult to predict how many storms will make landfall and where they will hit, a higher number of storms increases the chances of multiple landfalls, posing a significant risk to the Gulf of Mexico and Caribbean Sea regions.
Leading research institutes expect approximately 23 named cyclones in the North Atlantic this year, with 11 potentially developing into hurricanes. Of these, five could become severe hurricanes with wind speeds exceeding 110 mph. These estimates are considerably higher than the long-term average observed between 1950 and 2023, which was 12 named storms, 6 hurricanes, and nearly 3 severe hurricanes each season.
Sea surface temperatures in the tropical North Atlantic are currently at record highs, between 0.5 and 1.0°C above the historical average, creating conditions favorable for hurricane development. Furthermore, the natural climate oscillation ENSO (El Niño/Southern Oscillation) is expected to shift to a La Niña phase. This shift typically reduces high-altitude wind shear, which in turn makes it easier for tropical cyclones to develop and intensify.
Given these factors, the likelihood of severe hurricanes making landfall this season is heightened. This means that companies involved in infrastructure, construction, insurance, and emergency response could see increased demand for their products and services. Hurricanes not only cause billions of dollars in property damage but also disrupt various sectors, from utilities and energy to real estate and transportation. Thus, investing in companies that specialize in disaster recovery, property restoration, and related services could be a strategic move.
In this article, we will explore the ten best hurricane and natural disaster stocks to buy now. These companies are well-positioned to benefit from the potential increase in hurricane activity and the demand for services that follow in the wake of natural disasters. Whether through providing emergency equipment, offering insurance coverage, or assisting in rebuilding efforts, these stocks could present an opportunity for investors looking to hedge against the financial impacts of natural disasters.
Sources like Munich Re, the World Meteorological Organization (WMO), and the International Labour Organization (ILO) have provided valuable insights into the 2024 hurricane season, highlighting the increased risks and potential economic impacts. With that in mind, let’s dive into our list of the best stocks to consider for this hurricane season.
Our Methodology
The companies featured in this list are known to experience increased demand following hurricanes and natural disasters. To provide prospective investors with valuable insights, we’ve also highlighted key business fundamentals and analyst ratings for these stocks. Additionally, we reviewed data from approximately 912 elite hedge funds tracked by Insider Monkey during the second quarter of 2024 to determine hedge fund ownership for each company. From this dataset, we selected the top ten stocks most favored by institutional investors and ranked them in ascending order based on the number of hedge funds holding stakes in these firms as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of an engineer surveying a large-scale construction project.
Fluor Corporation (NYSE:FLR)
Number of Hedge Fund Holders: 30
Fluor Corporation (NYSE:FLR) is a global engineering, procurement, and construction company that provides services across a range of industries, making it an ideal addition to a list of hurricane and natural disaster stocks. The company’s expertise in project management, asset integrity, and operation and maintenance services enables it to respond effectively to infrastructure and energy needs, which often arise following natural disasters. Fluor Corporation (NYSE:FLR) diverse segments, such as Energy Solutions, Urban Solutions, and Mission Solutions, allow it to tackle complex projects, making it well-positioned to benefit from increased spending on disaster recovery and energy infrastructure projects.
In the second quarter of 2024, Fluor Corporation (NYSE:FLR) reported strong financial results, with revenues reaching $4.2 billion and new awards totaling $3.1 billion. The company’s total backlog stands at $32.3 billion, reflecting robust demand for its services across various sectors. The Urban Solutions segment, which focuses on infrastructure and advanced technologies, reported a segment profit of $105 million, demonstrating increased execution activities on multiple life sciences and infrastructure projects. This segment’s new awards rose to $2.4 billion, compared to $2.3 billion in the prior year, indicating the strong potential for long-term growth in this area.
Fluor Corporation (NYSE:FLR) strategic shift to an asset-light business model has enabled it to maintain high service margins, which have remained in the 20% range for its traditional EPCM businesses this year. Additionally, the company’s margin on new awards continues to outpace existing backlog by over 150 basis points, showcasing its effective pricing and project execution strategies.
Fluor Corporation (NYSE:FLR) Mission Solutions segment, which is critical in providing disaster response services, secured several new awards, including $63 million in task orders for the Federal Emergency Management Agency (FEMA). This positions the company as a key player in disaster recovery efforts, further solidifying its place among top natural disaster stocks.
Moreover, the number of hedge funds holding Fluor Corporation (NYSE:FLR) increased to 30 in Q2 2024, up from 28 in the previous quarter, indicating rising institutional interest. This increased confidence, combined with Fluor Corporation (NYSE:FLR) strong financial performance and expertise in disaster management and recovery, makes the stock an attractive investment option for those seeking exposure to hurricane and natural disaster-related industries.
Overall, FLR ranks 9th on our list of Best Hurricane and Natural Disaster Stocks To Buy Now. While we acknowledge the potential of FLR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FLR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.