In spite of the recent bout of volatility, Wall Street’s major averages are trading near their all-time highs as we approach the end of the year, with the benchmark S&P 500 index hovering near the 4,700 level.
Most of the focus of this year’s rally has been on the popular mega-cap tech stocks, such as Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), and Tesla (NASDAQ:TSLA)—the market's heavy-lifters.
However, today we've chosen to take a closer look at three non-tech stocks which have shown surprising gains, significantly outperforming the S&P 500 in 2021.
1. Devon Energy
- Jan. 1 Opening Price: $15.57
- Dec. 7 Closing Price: $45.11
- Year-To-Date Gains: +189.7%
- Market Cap: $30.5 Billion
Devon Energy (NYSE:DVN), one of the leading independent shale oil and gas producers in the US, has been a standout performer in the booming energy space this year.
The Oklahoma City, Oklahoma-based company has thrived in 2021, reaping the benefits of high energy prices and recovering global demand. Year-to-date, Devon’s stock has almost tripled, soaring roughly 190% to easily outpace the S&P 500’s 25% gain, making it one of the market’s top performers of the year.
DVN stock—which lost 37% in 2020 amid the coronavirus pandemic—ended Tuesday’s session at $45.11, within sight of its recent five-year peak of $45.56 touched on Nov. 24.
At current levels, the energy firm—which has outperformed other notable names in the sector, such as ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), and ConocoPhillips (NYSE:COP)—has a market cap of $30.5 billion.
Devon owns and operates key drilling assets in the Delaware Basin, Eagle Ford, Powder River Basin, Anadarko Basin, as well as the STACK shale formation in Oklahoma. The company reported blockbuster third quarter earnings on Nov. 2, boosted by strong energy prices and increased worldwide demand.
The low-cost oil and gas producer said it earned $1.08 per share, improving substantially from a loss of $0.04 per share in the challenging year-ago period. Revenue, meanwhile, surged nearly 225% year-over-year to $3.47 billion.
Despite robust year-to-date gains, Devon still looks attractive heading into 2022, considering its ongoing efforts to return more cash to shareholders in the form of higher dividend payouts and stock buybacks.
Devon’s board recently authorized a $1 billion share-repurchase program and declared a fixed-plus-variable dividend of $0.84 per share, up more than 120% from the preceding quarter's payout. It also offers one of the highest dividend yields of any member of the S&P 500, at 7.45%.
2. Macy’s
- Jan. 1 Opening Price: $11.25
- Dec. 7 Closing Price: $27.86
- Year-To-Date Gains: +147.6%
- Market Cap: $8.3 Billion
Macy’s (NYSE:M) has been one of this year’s biggest retail sector winners, with the department store giant benefiting from the vaccine-led return to normalcy, as consumers flock back to malls in greater numbers amid fading COVID fears.
Investors have also been encouraged by strong growth numbers in Macy’s booming e-commerce business, as well as rapidly recovering sales across all three of its brands, including its namesake chain of stores, as well as Bloomingdale’s and luxury beauty retailer Bluemercury.
Shares of the iconic department store chain have outperformed the S&P 500 by a wide margin in 2021, soaring almost 148% with just a few weeks remaining in the year.
M shares—which declined nearly 34% in 2020 as the pandemic forced the shut down of most of its stores—closed at $27.86 yesterday, earning the New York City-based retail company a valuation of $8.3 billion. Shares recently reached a three-year peak of $37.95 on Nov. 18.
In a sign of how well Macy’s business has bounced back from the COVID-19 health scare, the retailer has turned in earnings reports that have beaten Wall Street’s profit and revenue forecasts in each quarter this year, as it successfully brought back old customers and found new shoppers.
Macy’s said it added 4.4 million new customers in the third quarter, while comparable sales growth—which includes sales both online and at stores open for at least a year—jumped 37.2% from last year.
Digital sales, which has been the bright spot for Macy’s, saw annualized growth of 19% in Q3 and 49% on a two-year basis. The company said its online business accounted for 33% of total sales, climbing 10% from 2019 levels.
With the peak holiday-shopping season on the horizon, the largest US department store chain should continue to enjoy a boost to its already-stellar financial performance heading into the new year.
3. Nucor
- Jan. 1 Opening Price: $53.19
- Dec. 7 Closing Price: $114.00
- Year-To-Date Gains: +114.3%
- Market Cap: $32.6 Billion
Nucor (NYSE:NUE), which is the largest steel producer in the United States, has been one of the top performers in the basic materials industry this year, thanks to a potent combination of surging steel prices and booming demand for steel products.
Shares of the Charlotte, North Carolina-based company, which owns and operates 25 scrap-based steel production mills across the country, are up 114% year-to-date, easily topping the comparable returns of the S&P 500 in 2021.
NUE stock—which dipped 5.5% in 2020—ended at $114.00 last night, earning the steel products company a valuation of $32.6 billion. Shares rose to an all-time high of $128.81 on Aug. 13.
On Oct. 21, Nucor reported its most profitable quarter in its history when it announced third quarter results. The Charlotte, North Carolina-based industrial materials giant benefitted from strong steel market fundamentals and a favorable demand environment.
The company said earnings per share surged more than 1,000% from the same quarter a year earlier to an all-time high of $7.28, while revenue increased about 110% year-over-year to a record peak of $10.31 billion.
Looking ahead to 2022, Nucor shares look poised for further appreciation in the months ahead, as it stands to benefit from the expected boom in construction resulting from President Joe Biden’s infrastructure bill.
The spending package includes proposals to repair and improve the nation’s deteriorated roads, highways, bridges, and airports. That could result in more positive action for Nucor, which manufactures steel and steel products, such as bars, beams, sheets, and plates.