5 Best Cyclical Stocks for Inflation

In this article, we discuss 5 best cyclical stocks for inflation. If you want to read more about cyclical stocks and their performance during different economic cycles, you can go directly to 10 Best Cyclical Stocks for Inflation.

5. Marathon Oil Corporation (NYSE:MRO)

Number of Hedge Fund Holders: 43

Marathon Oil Corporation (NYSE:MRO) is an American oil and gas company headquartered in Houston, Texas. Oil companies might be susceptible to market volatility. However, 79% of the total energy is derived from fossil fuels in the US and more in emerging markets. Furthermore, the free cash flow breakeven of the company is at $35 WTI, while currently, crude oil is trading at nearly $110 WTI. 

Marathon Oil Corporation (NYSE:MRO)’s cash distribution to its shareholders is subjected to its cash flows. The company has pledged to return a minimum of 40% of its total cash flow to investors. According to the company’s Q1 financial reports, Marathon Oil Corporation (NYSE:MRO) has returned 80% of its free cash flow to investors through dividends and share repurchases. At the time of writing, the company has a 1.46% dividend yield and an annual dividend rate of $0.32 per share.

On June 14,  Barclays analyst Jeanine Wai raised the price of oil and gas exploration companies by an average of 18%. The analyst maintained an Overweight rating on Marathon Oil Corporation (NYSE:MRO) shares after raising the price target to $37 from $30.

Here is what Carillon Tower Advisers had to say about Marathon Oil Corporation (NYSE:MRO) n its Q1 2022 investor letter:

“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Marathon Oil (NYSE:MRO) increased its quarterly dividend and executed an impressive share buyback that blew by the target it originally announced.”