It is officially time for a campaign crisis. In just 19 days, Americans will head to local voting booths or mail their ballots to determine who will lead the United States for the next four years.
As we learned in 2016, a lot can happen in the last weeks of elections. However, research consistently shows that Democratic candidate Joe Biden has a remarkable lead nationally and in volatile states over current Republican Donald Trump. Although victory is far from guaranteed, Biden’s policy proposals could seriously affect the growth trajectory of a number of sectors, industries and companies.
Hypothetically speaking, if Joe Biden wins on November 3, the next five stocks become trouble-free purchases.
Perhaps the most logical beneficiary of Biden’s presidency is the renewable energy industry. Trump released a number of environmental measures during his presidency. Biden has made it clear that he plans to restore those protections and focus on cleaner energy sources.
Electrical stock NextEra Energy (NYSE: NEE) is at the forefront of renewable energy innovation. Currently, no program generates more solar or wind power than NextEra. Lack of competition is key to reducing electricity generation costs. Although these investments in renewable energy are not cheap, NextEra’s growth rate is significantly higher than that of its counterparts. In addition, its industry leadership puts the company on track to make any potential policy changes in Washington regarding the use of fossil fuels by utilities.
Don’t overlook the likelihood that interest rates will remain low, no matter who is chosen after 19 days. Low interest rates are important as NextEra uses debt to finance a number of its renewable energy projects.
If elected, Biden has promised to revise the U.S. Individual and Corporate Tax Code, though not to the same extent that we saw Donald Trump do so through the 2017 Tax Relief and Jobs Act. In particular, Biden wants to increase the peak marginal corporate tax rate from 21% to 28%, and move the peak marginal individual tax rate from 37% back to 39.6%.
The software company is an obvious beneficiary of corporate and individual changes in the income tax Intuition 09.30 NASDAQ: INTU. Intuit has three main business segments, but is best known for its QuickBooks accounting solutions, as well as its DIY income tax preparation software. Significant changes in the tax code almost always portend good for Intuit, as small businesses and individual taxpayers rely on the company to address their most pressing issues and concerns.
On the other hand, Intuit has developed a lot of history to achieve or win high expectations, no matter which side meets. With a focus on high margins on desktop and cloud-based software, Intuit has consistently produced operating margins in the medium to high range of 20% over the past five years.
Biden’s presidency would likely mean an increase in federal spending on infrastructure projects, some of which will be aimed at boosting the US economy after the biggest contraction in gross domestic product in decades. A significant increase in infrastructure costs can be exactly what the doctor has ordered for an engineering and consulting firm. Fluorine (NYSE: FLR).
You see, Fluor was a little confused as the company was under internal investigation, which revealed a number of errors in recognizing the costs. Eventually, Flour restarted its operating results between 2016 and 2019, as well as delayed its quarterly operating results for 2020. The company also suspended its dividend to keep capital.
None of this sounds like good news, but the amount recalculated each year was relatively small, considering all things. In addition, Fluor received $ 12.6 billion in new contracts for its government and continued operations last year and ended 2019 with a lag of $ 31.9 billion (that’s about two years in revenue). If Biden and Congress open the proverbial federal treasury to restore economic growth, Fluor’s new rewards and lag may be stronger.
Gold on Lake Kirkland
Gold stocks could be another trouble-free purchase if Biden wins. Biden is much more likely than Trump to increase federal spending to fix the U.S. economy. In this way, we can continue to see an increase in the federal deficit and national debt levels. Combined with historically low interest rates on loans, which should remain very low for years to come, the table looks set for physical gold to thrive.
No company in the gold mining industry has a more virgin balance than Gold on Lake Kirkland (NYSE: KL). In an industry known for overdoing it in the early 2010s and accumulating debt to take advantage of rising gold prices, Kirkland Lake Gold ended June with $ 537.4 million in cash and no debt. It is also a company that doubled its quarterly dividends earlier this year and bought nearly $ 380 million of its common stock by June.
In addition to having the best balance, Kirkland Lake’s three production assets are among the most efficient in the industry. In the second quarter, total maintenance costs reached $ 751 per gold ounce. This equates to a cash operating margin of better than $ 1,100 an ounce, based on the current spot price of gold.
Biden’s presidency could be a golden opportunity for Kirkland Lake shareholders.
Biden does not prefer Medicare at all; instead, he wants to build on Barack Obama’s flagship legislation, the Affordable Care Act. Profitable health companies will sigh with relief if Biden wins, but the innovative players will be the real winners.
The problem-free healthcare you buy here is the telemedicine king Teladoc Health (NYSE: TDOC). Virtual doctor visits were already gaining momentum before the coronavirus, but in the last two quarters they have jumped sharply. In the second quarter, Teladoc’s total visits increased by 203% compared to the previous year.
Particularly remarkable about virtual visits is their up and down benefits in the healthcare industry. Benefit providers prefer telemedicine visits because they are usually cheaper than office appointments. Teladoc also allows patients and doctors to “meet” from anywhere, which fits right into the topic of personalized / precision medicine, which is likely to dominate in the 2020s.