Are cyclical stocks suitable for long-term investors?

Many cyclical stocks are suitable for long-term investors. Several cyclical companies have taken steps to make their businesses more resilient by maintaining strong financial profiles, ensuring they can continue to grow and pay dividends during a cyclical downturn.

Is Amazon a cyclical stock?

Yes, Amazon would be considered a cyclical stock. Its e-commerce business would be sensitive to cyclical changes in consumer discretionary spending. Likewise, its cloud computing business (AWS) would be sensitive to changes in corporate investment.

Do cyclical stocks pay dividends?

Yes, many cyclical stocks pay dividends. Many have strong enough businesses that they can continue to pay and grow their dividends during a cyclical downturn. However, others with weaker financial profiles might need to suspend their dividends during a deep economic downturn.

Are cyclical stocks a good hedge against inflation?

Cyclical stocks can be a good hedge against inflation under certain conditions. They tend to be a good hedge when consumer spending is strong because that gives them pricing power. However, they're not a good inflation hedge during periods of high interest rates or when discretionary spending is falling.

Is there an ETF for cyclical stocks?

There isn't one specific ETF focused on cyclical stocks. However, several ETFs focus on cyclical sectors, such as consumer discretionary (e.g., Consumer Discretionary Select Sector SPDR Fund (NYSEMKT:XLY)) and industrial (e.g., Industrial Select Sector SPDR Fund (NYSEMKT:XLI)).

Can cyclical stocks be part of a retirement portfolio?

Cyclical stocks can be part of a diversified retirement portfolio. Ideally, you'd want to hold the highest quality companies in a retirement account, especially those tied to the economic cycle.

How often should I review my cyclical stock investments?

You should review your cyclical stock investments at least once a year to ensure they remain financially strong. You should also consider reviewing your cyclical stock investments after a market dip driven by concerns that a recession could be on the horizon.

Best Cyclical Stocks to Buy in 2026

The economy moves in a cycle with four basic stages: expansion (sustained growth), peak (slowing growth), contraction or recession (economic decline), and trough (the turning point before recovery begins).

This cycle has a significant effect on industries tied to economic growth. Corporate profits typically rise during expansions and fall during recessions, pulling the prices of cyclical stocks along with them. Understanding how cyclicality works and which stocks can weather it best is essential for any investor building a long-term portfolio.

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GettyImages-1398219003-1200x800-5b2df79 — Image source: Getty Images.

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Ticker Information Table
Name and ticker	Market cap	Dividend yield	Industry
Walt Disney (NYSE:DIS)	$167.9 billion	1.32%	Entertainment
Airbnb (NASDAQ:ABNB)	$78.6 billion	0.00%	Hotels, Restaurants and Leisure
EPR Properties (NYSE:EPR)	$3.8 billion	7.14%	Specialized REITs
Nucor (NYSE:NUE)	$37.8 billion	1.33%	Metals and Mining

Data as of Mar 27, 2026. Showing 4 of 4 tickers.

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1. The Walt Disney Company

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NYSE: DIS

Walt Disney

Today's Change

(-2.46%) $-2.33

Current Price

$92.42

Key Data Points

Market Cap

$168B

Day's Range

$92.19 - $94.19

52wk Range

$80.10 - $124.69

Volume

12M

Avg Vol

12M

Gross Margin

31.61%

Dividend Yield

1.32%

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Entertainment giant Disney (DIS -2.40%) has a cyclical business. Consumers reduce their spending on discretionary purchases, such as vacations, during a recession. That affects Disney’s experiences (parks, cruises, and vacation clubs) and other consumer products businesses.

Despite concerns about the economy, Disney is seeing resilient demand for its experiences. In its fiscal first quarter of 2026, revenue from domestic parks and experiences rose 7% while international revenue increased by 7%, offsetting flat consumer products sales. Meanwhile, entertainment revenue rose 6%, driven by a 13% jump in subscription fees, as its direct-to-consumer offerings, such as Disney+, continue to benefit from more people switching to streaming.

Disney could buck the economic cycle by continuing to boost its revenue and earnings in the coming years. The company expects to deliver double-digit earnings growth for fiscal 2026 and 2027.

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2. Airbnb

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NASDAQ: ABNB

Airbnb

Today's Change

(-6.26%) $-8.21

Current Price

$122.85

Key Data Points

Market Cap

$79B

Day's Range

$122.47 - $129.96

52wk Range

$99.88 - $143.88

Volume

215K

Avg Vol

4.6M

Gross Margin

72.27%

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Airbnb (ABNB -6.26%) is a leading online vacation rental platform. While vacation demand tends to decline during a recession, Airbnb's platform should remain highly resilient. It's focusing on four key areas to drive consistent growth: improving its service, expanding into more regions, enhancing its offerings, and integrating AI into its app.

The company wants its app to be a lot like Amazon (AMZN -3.89%). It aims to be the go-to source for travel and living needs. The company intends to build several new businesses in the coming years. It plans to start by investing in experiences that enhance user stays, such as tours led by locals. Airbnb also anticipates expanding into other areas, such as partnering with companies like grocery stores and cleaning services. The company's expansion strategy should enable it to continue growing even in a cyclical downturn in travel.

3. EPR Properties

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NYSE: EPR

EPR Properties

Today's Change

(-1.81%) $-0.90

Current Price

$48.71

Key Data Points

Market Cap

$3.8B

Day's Range

$48.36 - $49.86

52wk Range

$41.75 - $62.08

Volume

1.2M

Avg Vol

879K

Gross Margin

51.15%

Dividend Yield

7.14%

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EPR Properties (EPR -1.81%) is a real estate investment trust (REIT) focused on owning experiential real estate, including movie theaters, ski resorts, eat-and-play locations, and other attractions. Demand for these experiences tends to decline during a recession. However, an economic downturn is unlikely to have as much impact on EPR Properties due to its business model.

The REIT leases its properties to operating tenants under long-term triple net (NNN) agreements. Those leases supply it with a very stable rental income. It pays out a meaningful portion of its steady cash flow via its monthly dividend. EPR reinvests the remaining funds to acquire additional income-producing experiential properties. In late 2025, it invested $113 million in sale-leaseback transactions to acquire a five-property portfolio of championship golf courses and a water park. The REIT followed that up in early 2026 by acquiring seven regional theme parks from Six Flags (NYSE:SIX) in a $342 million deal, which it leased to two new operators. Those investments help grow its rental income, which should enable the REIT to continue increasing its dividend even during a recession.

4. Nucor

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NYSE: NUE

Nucor

Today's Change

(-1.54%) $-2.56

Current Price

$163.45

Key Data Points

Market Cap

$38B

Day's Range

$162.72 - $165.75

52wk Range

$97.59 - $196.90

Volume

57K

Avg Vol

1.7M

Gross Margin

12.01%

Dividend Yield

1.33%

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Examples of noncyclical industries

Some businesses hold up well no matter where the economy is in its cycle. The most prominent defensive sectors include:

Nondiscretionary retail: Grocery stores, drugstores, and big-box retailers selling everyday necessities tend to be resilient even in deep recessions.
Utilities: Consumers generally keep paying their electric and water bills regardless of economic conditions.
Defensive real estate: REITs focused on medical offices or necessity retail tend to hold up better than those invested in hotels or timberland. That said, the entire real estate sector is sensitive to interest rates -- rising rates weigh on values, while falling rates provide a tailwind.

It's worth noting that even defensive stocks aren't entirely recession-proof. In severe downturns, investors sometimes rotate out of equities entirely into bonds and cash, which can weigh on even the most stable stocks.

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FAQ on cyclical stocks

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

TMFmd19

@MatthewDiLallo

JPMorgan Chase is an advertising partner of Motley Fool Money. Matt DiLallo has positions in Airbnb, Amazon, Apple, Coca-Cola, EPR Properties, JPMorgan Chase, NextEra Energy, Realty Income, and Walt Disney and has the following options: short March 2026 $125 calls on Walt Disney and short May 2026 $280 calls on Apple. The Motley Fool has positions in and recommends Airbnb, Amazon, Apple, Boeing, Costco Wholesale, EPR Properties, JPMorgan Chase, NextEra Energy, Realty Income, Texas Roadhouse, and Walt Disney. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Best Cyclical Stocks to Buy in 2026: Everything Investors Need to Know

Key Points

1. The Walt Disney Company

Key Data Points

2. Airbnb

Key Data Points

3. EPR Properties

Key Data Points

4. Nucor

Key Data Points

Examples of noncyclical industries

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FAQ on cyclical stocks

About the Author

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Key Data Points

FAQ on cyclical stocks

Are cyclical stocks suitable for long-term investors?

Is Amazon a cyclical stock?

Do cyclical stocks pay dividends?

Are cyclical stocks a good hedge against inflation?

Is there an ETF for cyclical stocks?

Can cyclical stocks be part of a retirement portfolio?

How often should I review my cyclical stock investments?

What is a cyclical stock?

Top cyclical stocks to consider

1. The Walt Disney Company

2. Airbnb

Examples of noncyclical industries

How Cyclical Stocks Respond to Economic Changes

Benefits and risks of investing in cyclical stocks

What to look for in a cyclical stock

When should you buy cyclical stocks?

How to invest in cyclical stocks

Strategies for Investing in Cyclical Stocks

Related investing topics

FAQ

Key Data Points

Key Data Points

Key Data Points

3. EPR Properties

Cyclical vs. noncyclical stocks

Examples of cyclical industries

4. Nucor