An economic expansion has been underway for a few years now, as the unemployment rate drops and economic activity increases. This makes consumer cyclicals attractive for investors. (See also: Cyclical Versus Non-Cyclical Stocks.)

This category includes retail, auto, construction, restaurants and entertainment, to give a few examples. The idea is that consumers will spend more money when the economy is improving. Consumer sentiment is high and the outlook for growth remains strong. Investing in companies that offer goods to consumers can be lucrative during this cycle.

Let’s look at the best consumer cyclical stocks for 2017 to find the most robust opportunities for prospering from economic expansion. All figures are current as of November 29, 2017.

1. Walt Disney Co.

The force is still with Walt Disney (DIS). The "Star Wars" film franchise continues to pay off. “Rogue One” produced revenues well into 2017, and another "Star Wars" movie ("Star Wars: The Last Jedi") is due out later this month. In addition, "Pirates of the Caribbean: Dead Men Tell No Tales" was released in May 2017, and “Cars 3” came out in June.

The public seems to be in the mood for entertainment and escape at theme parks, and the new Shanghai Disneyland Park should help boost theme park sales.

Operating income has been increasing for the past four years, and Disney continues to pay a reliable dividend of 1.58%. The stock began a strong and steep upward climb in October 2016 and it held on to its gains through the first four months of 2017. But since hitting its year-to-date peak on April 27, the stock has declined about 9 percent, to settle at $105.09 on November 29.

  • Avg. Volume:     7,790,419
  • Market Cap:       $158.94 billion
  • PE Ratio (TTM): 18.67
  • EPS (TTM):       5.64
  • Dividend & Yield:            1.56 (1.58%)

2. Genuine Parts Company 

Genuine Parts (GPC) has increased its dividend for 60 years. The company continues to prosper by acquiring other companies, and is now dominating the auto parts industry.

Genuine Parts' business model and growth prospects make it a potential winner for the rest of 2017 and the first half of 2018. Auto parts are in high demand and GPC is the go-to supplier.

Revenues, gross profit and operating income have remained steady for four years. This stock is appealing to investors looking for dividends, safety and some possibility for growth. After hitting a year-to-date peak of $100.67 in February, the stock is currently trading at $91.50 per share, so investors may have a buying opportunity.

  • Avg. Volume:     870,668
  • Market Cap:       $13.415 billion
  • PE Ratio (TTM): 19.81
  • EPS (TTM):       4.62
  • Dividend & Yield:            2.70 (3.08%)

3. General Motors Co.

It is hard to believe that General Motors (GM) was in danger of going out of business eight years ago. The company has announced that it is investing $1 billion new dollars in manufacturing for 2017. The investments will support 1,500 jobs. During the last four years, GM has created 25,000 new jobs.

Operating income has been flat for the past four quarters, and the dividend looks to be safe. In fact, the dividend has been growing, with an average yield of 4.26% over the past five years. America’s love affair with the car is far from over, and GM’s stock chart shows that investors are buying shares.

  • Avg. Volume:     13,705,873
  • Market Cap:       $62.228 billion
  • PE Ratio (TTM): 7.62
  • EPS (TTM):       5.75
  • Dividend & Yield:            1.52 (3.41%)

4. Lululemon Athletica Inc.

Lululemon Athletica (LULU) may be ready to soar. The stock dropped dramatically at the end of the first quarter of 2017, but has since recovered and has seemed to have found support at around $58 per share. If it continues to rise from this level, buyers could get a bargain. The stock closed at $66.87 on November 29, 2017.

The company has been in business since 1998 and has expanded its athletic wear focus to include accessories. LULU has a robust sales channel that includes company stores, outlets stores and fitness.

  • Avg. Volume:     2,128,077
  • Market Cap:       $9.053 billion
  • PE Ratio (TTM): 32.27
  • EPS (TTM):       2.07
  • Dividend & Yield:            N/A (N/A)

The Bottom Line

If you are going to invest in consumer cyclicals for 2017, it is important to do your due diligence and choose companies that are currently doing well. Never pick a stock simply because it is in a sector that is "supposed" to rise. Choose individual stocks within that sector that are already rising.

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