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Historically, investors have been able to make small gains by buying certain election-related stocks during election years, but reelection years offer larger returns. Since 1952, S&P500 They averaged 7% of the vote in election years, but 12.2% in re-election. This reflects the president’s desire to promote economic growth through fiscal and regulatory policies during his re-election campaign.
Other indexes have also profited from investing in electoral stocks, but their performance has been more modest. for example, DJIA We have an average return of 5.4%. Nasdaq During the election period, it was 7.4%. But the Nasdaq’s performance has been more volatile. In the last election in 2020, the index increased by 47.6%. In contrast, Nugget’s decline was recorded in his 2008 year, when he fell 41.9%.
Election results will impact certain election stocks and sectors depending on who wins. Some analysts believe Biden’s re-election could maintain the status quo and benefit past top performers. On the other hand, some believe that Trump’s victory could spur a change in the military landscape, adding defense to the list of stocks for the 2024 presidential election.
Investors have the opportunity to profit from election cycles by diversifying their investments across promising industries and election stocks.
General dynamics (GD)
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The defense industry could benefit under a pro-military Trump administration, but it could also benefit from rising geopolitical tensions regardless of who wins the election. General dynamics (New York Stock Exchange:GD) You could be one of the winners. F-16 manufacturers could potentially supply Ukraine and are well-positioned to benefit from additional funding and new program awards regardless of the outcome. The company is also a major producer of artillery shells, as the United States ramps up production of 155mm ammunition for NATO allies.
The company has a price-to-earnings ratio (PE) of 21 times and a dividend yield of 2.1%. Analysts expect full-year earnings to beat nearly 20% to $14.91 per share on a backlog of $95.6 billion. In the most recent quarter, General Dynamics generated $1.1 billion in free cash flow, using almost half of it to pay down debt.
Enbridge (ENB)
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Enbridge (New York Stock Exchange:ENB) is a major North American energy infrastructure company that could benefit under either administration. On the other hand, Biden could limit new pipelines and increase Enbridge’s reliance on existing infrastructure. Meanwhile, President Trump could stimulate demand for production and transportation by increasing drilling and oil production. The company owns and operates an extensive network of crude oil, liquids and natural gas pipelines, which would benefit under the Trump administration.
Enbridge offers stability amid uncertainty with its 7.3% dividend yield and steady cash flow. It trades at a P/E ratio of 33x and has available cash of $2.61 billion, up from $861 million last year, giving it the firepower to invest in expansion should the opportunity arise. Moreover, the average expected price by analysts is $39.80 and the current price is $36.70.
Granite construction (GVA)
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Granite construction (New York Stock Exchange:G.V.A.) The country may be poised to benefit from increased infrastructure spending in the run-up to the 2024 US election. The company, one of the nation’s largest infrastructure contractors, could potentially benefit from state and local spending as well as the federal government. Contextually, the company generated more than 70% of its 2022 revenue from public infrastructure projects.
With a price-to-sales ratio of 0.66x and a dividend yield of 1.1%, Granite Construction has increased its revenue by 11% this year and has a record-high committed project backlog of $5.6 billion (up 1.5 billion year over year). The company reported that it recorded an increase in Because the company specializes in transportation infrastructure, it is well-positioned to take full advantage of election-year infrastructure spending.
On the date of publication, Stavros Tousios did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publishing guidelines.
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