September is a scary month for S&P 500 investors for good reason — it's the worst month of the year for stocks. But it doesn't have to be such a downer.
A dozen stocks, including consumer discretionary Caesars Entertainment, materials company Mosaic and financial MetLife, consistently outperform the S&P 500 in the difficult month of September. All 12 of these stocks topped the S&P 500 during September in each of the past five years, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Finding stocks that can defy the pain in September is a big boost during a traditionally difficult month.
"Since World War II, the S&P 500 posted the worst average monthly price change in September, joining February as the only two months to register declines," said Sam Stovall, strategist at CFRA. "September stands alone as the only month in which the market fell more frequently than it rose."
Worried yet?
Sizing Up September For The S&P 500
September earns its bad rap with investors. You can't find a more hostile month for the S&P 500.
The S&P 500 tanked an average 0.5% during September going back to 1950, says "Stock Trader's Almanac." It's fallen 38 of the years and only gained in 32 of them. No other month of the year is worse for stocks.
And even a "good" September isn't great, Stovall says. "The best September return places it in the bottom quarter of all months, while its deepest one-month decline was among the four worst," he said. It gets worse. "Finally, volatility for the month was also above average," Stovall said.
But that's not to say you still can't find places in the S&P 500 to make money.
Gambling For September Winners In The S&P 500
If you think making money in September in stocks is a gamble, you're not far off. Casino operator Caesars Entertainment consistently shines as a top stock in September.
Shares of Caesars gained 9.8% during September in the past five years on average. That handily beats the monthly gains of any S&P 500 stocks that have topped the S&P 500 during September in the past five years. The S&P 500 itself fell 0.9%, on average, in the past five Septembers.
Caesars' uncanny ability to surpass the market's returns in September happened even in the past two difficult years for the month. Last September, shares of Caesars rose 10.5%, a stellar performance as the S&P 500 dropped 4.8% during the month. Similarly, the company shot up 22.4% in September 2020, topping the S&P 500's 3.9% fall during the month.
And it there's a rally in the cards, it's overdue. Facing another year of losses in 2022, expected to reach $2.19 a share, investors pushed shares of Caesars down nearly 56% this year. And yet, analysts think the company will return to profitability in fiscal 2023.
Top Stocks That Win In September
There are also a few S&P 500 stocks that traditionally do well in September, though, that are up this year so far. Fertilizer maker Mosaic is a great example.
Shares are already up nearly 33% this year so far. And that's a good position to be in going into a strong month for the stock. Mosaic stock has risen an average of 7.9% during September in the past five years. Additionally, insurer MetLife is a consistent market beater in September, too. It's gained 4% in September the past five years, while the S&P 500 fell 0.9%. And MetLife's shares are up 2% this year so far.
If there's a bright spot in all this, it's that September has become less bad in recent years, Stovall says. In the past 25 years, the S&P 500 rose 56% of the time in September.
But there's plenty of tough history to remember in September.
Winning S&P 500 Stocks In September
All topped the S&P 500 during the month the past five years
| Company | Symbol | Avg. stock September gain % | Sector |
|---|---|---|---|
| Caesars Entertainment | 9.8% | Consumer Discretionary | |
| Mosaic | 6.9% | Materials | |
| United Rentals | 6.3% | Industrials | |
| Ameriprise Financial | 4.1% | Financials | |
| O'Reilly Automotive | 3.8% | Consumer Discretionary | |
| Jacobs Solutions | 3.2% | Industrials | |
| Southwest Airlines | 3.1% | Industrials | |
| Boeing | 3.1% | Industrials | |
| MetLife | 3.1% | Financials | |
| Etsy | 2.7% | Consumer Discretionary | |
| Home Depot | 2.4% | Consumer Discretionary | |
| Gartner | 2.1% | Information Technology |
