With just over a week left for the United States presidential election, the battleground is set for intense debate and rhetoric. However, the stock market is prone to high volatility, not only as we come close to the election, but also in the next few months to a year as a result of the COVID-19 pandemic. There are certain stocks that are going to benefit from the victory of either President Donald Trump and former Vice President Joe Biden. The policies and philosophy of each of the candidates are getting clearer during these debates and increasing clarity on which stocks are going to benefit from the result of this battle.
Which Stocks Will Win In This Election
We have created the list below based on the analysis of how the stock market has performed in the last few months and on the odds of victory for Joe Biden or Donald Trump. The analysis takes into account the correlation between daily price changes and presidential candidate general election betting odds. Also, the history of the stock and the current valuation has also been taken into account to identify these stocks which could potentially benefit from its favorable side’s winning.
Stocks that can benefit from Trump winning:
Johnson & Johnson (JNJ): Johnson & Johnson is one of the leading American multinational corporations founded in 1886, which deals in medical devices, pharmaceuticals, and consumer packaged goods. Due to the recent pandemic, there has been a lot of focus on the pharmaceutical companies and Johnson and Johnson is going to benefit in the near term.
British American Tobacco PLC (BTI): British American Tobacco plc is a British multinational company that manufactures and sells cigarettes, tobacco, and other nicotine products. In the recent past, the stock has reacted positively to any news that signified Trump ahead of Biden in the Presidential race. Also, the stock is reasonably priced at a P/E of 9.29 and has a good dividend yield of almost 10%. The company has consistently paid dividends in the last 10 years.
Microsoft (MSFT): Microsoft has been one of the very few tech behemoths who have not faced the wrath of the Trump administration. There have been multiple allegations against companies like Apple, Amazon, Google, and Facebook as they are restricting competition and becoming monopolies in their respective spaces. But when it comes to Microsoft it has been well placed from that perspective and is well poised to benefit from the tech revolution. Also, the recent interest was shown by Microsoft to buy Tik Tok in the USA, making its ambitions clear in the social media space, one of the areas which Microsoft has been trying to venture into. Considering decent valuations and no immediate interruptions to the business it can benefit from Trump’s victory in the presidential election.
Bristol-Myers Squibb Co (BMY): Bristol Myers Squibb is a leading American pharmaceutical company that manufactures prescription pharmaceuticals for cancer, HIV/AIDS, cardiovascular disease, etc. As the continuous focus of Trump to improve healthcare gathers pace, this company may benefit in the near term from Trump’s victory. With a decent dividend yield of almost 3% and a consistent track record of paying dividends, this stock is should be in your portfolio.
Stocks that can benefit from Biden win:
A. O. Smith Corp (AOS): A.O. Smith, a maker of water heaters in the US has been supplying its water heaters globally. It did not have an easy go in recent years. However, the stock has shown positive movement whenever the odds have improved in favor of Biden. Biden’s “Made in America” plan will help companies such as A.O. Smith, which manufactures in China and India for years but still produce most of the products destined for the US right here in America. The new policy from Biden should help companies who are not forced to stop offshoring and the new tax regime might help this company.
Oracle Corporation (ORCL): Oracle Corporation is a leading American multinational computer technology corporation that sells database software and technology, cloud engineered systems, and enterprise software products. With a market cap of 180 Billion, this tech giant is poised to take the next big leap under the Biden regime. This stock has also seen positive movements with any improvement of odds in favor of Biden. With a decent P/E ratio of just 18.78 which is relatively cheap for a tech company and a good dividend yield of 1.6%, this stock is expected to get some attention from investors in near future. Also, the consistent track record of dividend distribution should be an added advantage for the investors.
Exxon Mobil Corporation (XOM): ExxonMobil is a leading American multinational oil and gas corporation headquartered in Irving, Texas. In the recent past, Exxon Mobil’s share price has favorably moved in case of any improvement in odds in favor of Joe Biden. Though the oil and gas space is gaining less traction, the decent dividend yield of 10% and a consistent track record of paying dividends may help you to keep this stock in your portfolio.
Baozun Inc (BZUN): The last stock on our list is a relatively unknown company. Baozun is a leading digital technology and solution company in China. This stock has shown positive movement whenever the predictions have shown that the odds are improving in favor of Biden. As the USA-China deal may go for a change in the Biden regime this stock may also witness some change in fortune.