Elections are tricky business and it’s important not to put too much emphasis on polls, especially polls before September. That said, it seems clear that Republican candidate and former President Donald Trump has a less-complicated path to the White House. Basically, conservatives voted decisively for the man. Therefore, investors should at least consider stocks for a Trump second term.
To be clear, that’s no disrespect to Vice President Kamala Harris. But if we’re being honest, I’m sure the Democrats would love to have more time on their hands to run a campaign. Their backs are to the wall. Then again, when the going gets tough, the tough get going. We might see a younger liberal candidate sway voters of diverse backgrounds.
But on paper, Trump seems to have a more straightforward path to victory. By assessing his policies based on current statements and past achievements, it’s relatively easier to formulate possible winning market ideas. Below are stocks for a Trump second term.
Caterpillar (CAT)
Fundamentally, Caterpillar (NYSE:CAT) is an obvious idea among stocks for a Trump second term. As a leading manufacturer of construction and mining equipment, it’s a powerhouse in fields which involve folks rolling up their sleeves — and these are fields often highlighted in conservative talking points.
Another factor to consider is the underlying financials. While CAT may seem like a boring idea, the business delivers the goods. In the past four quarters, the company posted an average earnings per share of $5.48. This easily beat out the collective consensus view of $4.82, yielding an earnings surprise of 13.85%.
To be fair, CAT stock wouldn’t exactly be considered undervalued at 2.61X trailing-year sales. Indeed, it’s overpriced relative to the industry average. Also, between the first quarter of 2023 to Q1 2024, the average metric sat at 2.29X.
Analysts project rough waters this year. However, in the following year, sales could hit $68.56 billion, an improvement over 2023’s haul of $67.06 billion. And who knows? Under a second Trump term, an infrastructure plan could boost sales.
General Dynamics (GD)
Defense contractor General Dynamics (NYSE:GD) is a tricky idea when it comes to stocks for a Trump second term. That’s because the former president has talked extensively about peace through an isolationist framework. Also, Trump’s language about dictators has U.S. global partners on edge. Cynically, that’s a great thing for GD stock.
Let’s look at it this way. With so many countries in the firing lane of belligerent nations or those with imperialistic ambitions, the rest of the world has never been more insecure. That means U.S.-friendly nations will likely need to bolster their own defense spending. That should help General Dynamics, which offers a range of military solutions.
Recently, the company posted its Q2 earnings report, which was slightly mixed. Earnings saw growth against last year but missed analysts’ target by a small margin. However, revenue also saw growth and managed to exceed the consensus view. As well, General Dynamics had an order backlog of $91.3 billion.
That last point is significant. If Trump wins, that backlog should skyrocket.
Exxon Mobil (XOM)
You knew I was going to talk about Exxon Mobil (NYSE:XOM) or some other major oil firm, right? XOM practically sells itself as one of the stocks for a Trump second term. As the man stated, one of his goals is to unwind President Joe Biden’s initiatives focused on electric vehicles. According to Trump’s words, he’ll end the EV mandate on day one.
Naturally, such a bold statement should be awesome news for XOM stock. Frankly, hydrocarbons had a longer-than-anticipated lifeline due to their underlying energy density. But with Trump in office again? You can buy XOM and ride that [insert poop emoji] to the moon. I’m serious. Exxon Mobil and its integrated oil peers just screams stocks for a Trump second term.
You know what’s interesting about Exxon? The price-to-sales ratio comes in at 1.38X. That’s a modest premium over the prior year’s metric of 1.24X. It would be an absolute steal right now if you knew for certain that Trump would win.
Analysts see a high-side estimate this year of $444.62 billion in sales. That’s well above last year’s print of $344.58 billion.
Tractor Supply (TSCO)
Agricultural goods retailer Tractor Supply (NASDAQ:TSCO) embroiled itself into a double controversy recently. Earlier, the company expressed the importance of climate-forward initiatives along with improving diversity, equity and inclusion (DEI). However, a conservative thought leader expressed concerns that Tractor was basically going “woke.” Facing a threatened boycott, management backed out of its progressive policies.
Of course, such a shocking turnaround has angered social advocacy groups. Tractor is basically in a no-win situation; that is, unless Trump pulls off an electoral victory. Frankly, the company needs the former president to win his second term. It would get the heat off the brand, if only because controversial conservative ideas would become normalized in a sense.
It was a major risk to back away from the climate goals and especially the DEI directive. Right now, shares trade at a premium to sales of 2.01X. That’s a big higher than the prior year’s average of 1.73X.
Still, analysts are looking for slow-and-steady growth in the top line over the next two years. By the end of fiscal 2025, sales could hit $15.88 billion, with a high-side estimate of $16.12 billion. Last year, revenue reached $14.56 billion.
Alcoa (AA)
Under another round of the Trump White House, Alcoa (NYSE:AA) may be one of the top entities to consider. As a global leader in the production of aluminum and other industrial products, Alcoa should benefit from Trump’s protective policies. You’d imagine that “The Donald” would have little qualms about imposing tariffs under the framework of protecting American jobs.
In that sense, AA ranks among the intriguing stocks for a Trump second term. Still, Alcoa is a risky proposition because of the broader economic challenges facing the world. In the past four quarters, the company incurred a loss per share of 59 cents. However, thanks to a blistering print in Q4 2023 and Q2 of this year, the quarterly surprise came out to 14.7%.
Right now, AA stock trades hands at a premium to sales of 0.57X. That’s only marginally higher than the trailing-year average since Q1 of 0.55X. What’s more, analysts project fiscal 2024 sales to hit $11.38 billion. If so, that would be up 7.8% from last year’s result of $10.55 billion. Also, the high-side estimate for the following year clocks in at $12.31 billion.
Barrick Gold (GOLD)
When it comes to Barrick Gold (NYSE:GOLD), I must admit some uncertainty about whether GOLD will represent one of the stocks for a second Trump term. That’s because I’m not entirely sure what monetary policy the Trump administration would seek. Granted, the Federal Reserve operates independently of the federal government, including the president. Still, the POTUS can have an indirect influence on monetary matters.
And that’s where questions lie: will interest rates swing higher or lower under a second Trump term? I’m not entirely sure. However, I would imagine that the indirect influence of a Trump presidency would push for lower rates. That would mean a propensity for growth in the money supply, which should be positive for GOLD stock.
If we’re being blunt, Americans generally prefer a dovish framework anyways. So, irrespective of who’s in charge, the nature of monetary policy should be inflationary. Again, that’s good for GOLD.
Analysts see robust growth over the next two years, culminating in fiscal 2025’s possible target of $14.76 billion in sales. That’s well above last year’s print of $11.4 billion.
Valvoline (VVV)
Saving the most unusual idea for last, investors looking for stocks for a Trump second term should consider Valvoline (NYSE:VVV). Yeah, that’s right – I’m talking about the quick-service oil-change specialist. Basically, the concept is that if Trump rolls back Biden’s EV initiatives, more people would be comfortable buying combustion-based vehicles.
Well, we all know that such vehicles are more complex than EVs. An electric-powered car runs on an electric motor and therefore doesn’t require many moving parts. That’s not the same with vehicles running internal combustion engines. There are thousands of parts and many systems or components require lubrication. That’s great for VVV stock.
Valvoline will release its fiscal Q3 earnings next week. So far, though, the company has been steadily delivering the goods, generating an earnings surprise of 5.05% in the past four quarters. It’s also priced at 4.24X sales, a bit lower than the prior year’s average of 4.53X.
For fiscal 2024, analysts anticipate revenue of $1.63 billion. That’s up 12.8% and would be a reasonable target under a second Trump term.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.