In just over a month, on November 5, voters will go to the polls or mail in their ballots to determine who will lead our country for the next four years.
While not everything that happens in Washington DC affects Wall Street, the economic policies of the new President and Congress are certainly helping to shape the landscape for corporate America, and will ultimately have an impact on stock prices. market.
Current Vice President and Democratic Party presidential candidate Kamala Harris has made sweeping proposals, including increasing construction of new starter homes, lowering food and drug costs, expanding certain tax breaks for middle-class families and increasing the corporate tax rate by 33%. .
While some publicly traded companies may be adversely affected by Harris’ policies – this is an issue I will discuss in more detail next week – there are also stocks that could benefit enormously if she emerges victorious on November 5.
What follows are three unstoppable stocks that could rise if Kamala Harris wins in November.
NextEra Energy
The first great stock that would have the necessary catalyst to rocket higher with a Kamala Harris win is the nation’s largest electric utility by market value. NextEra Energy (NYSE: NO).
While Harris has been non-committal on whether she would require automakers to produce only electric and hydrogen vehicles, as she proposed in 2019 when she ran for the Democratic presidential ticket, she remains a steadfast supporter of reducing greenhouse gas emissions and promoting clean energy solutions. . Her vote was the deciding factor that led to the Inflation Reduction Act (IRA) becoming law, which will free up hundreds of billions of dollars for clean energy initiatives.
Aside from its size, NextEra Energy distinguishes itself from dozens of other listed electricity companies by its focus on renewable energy sources. It currently has a capacity of 72 gigawatts (GW), almost half of which comes from renewable energy sources. No electricity company in the world generates more from solar or wind energy than NextEra.
Even though interest rates have risen significantly since March 2022, the company’s management team has kept its proverbial foot on the accelerator when it comes to clean energy investments. NextEra plans to invest a total of $85 billion to $95 billion in various infrastructure projects between 2022 and 2025, and predicts that between 36.5 and 46.5 GW of new renewables and storage capacity will come online between 2024 and 2027.
In other words, NextEra Energy would be way ahead of the curve if the Harris administration were to impose clean energy emissions targets on electric utilities. To boot, so have these investments substantial NextEra’s electricity generation costs have been reduced and turned it into something of a growth stock (sustained earnings growth in the high single digits) in an industry known for slow growth.
NVR
Another key tenet of Harris’ plan if she is elected president is to oversee the construction of 3 million new homes during her first term. Harris would offer tax breaks to homebuilders targeting first-time buyers and increase funding available to local governments to encourage them to lift zoning restrictions that limit the number of homes they can build.
While such legislation, if passed, would be seen as positive across the housing industry, it would be especially good news for NVR (NYSE:NVR)which focuses primarily on entry-level affordable housing on the East Coast through its best-known subsidiary Ryan Homes.
Despite the focus on generally lower-priced homes, NVR is consistently the most profitable homebuilder, based on return on invested capital.
The not-so-subtle secret to the company’s success is its asset-light approach. Instead of spending a lot of capital to buy and develop land, the country relies on lot purchase agreements (LPAs). With LPAs, NVR puts down a relatively small, non-refundable deposit that gives it the ability to build homes. By not having to spend much of its capital, it was able to handily outpace the larger homebuilders in terms of growth – posting 23% annualized profit growth over the past five years.
NVR also has a mortgage banking segment that is likely to benefit from the newly initiated interest rate easing cycle. Mortgage servicing is a complementary segment for NVR, but provides the company with a way to keep first-time buyers within its ecosystem of products and services. A dovish Federal Reserve and a presidential candidate focused on ending the housing shortage is a dream scenario for NVR and its shareholders.
Mobileye Global
The third unstoppable stock with all the tools and intangibles needed to soar higher if Kamala Harris wins in November is the provider of advanced driver assistance systems (ADAS) and autonomous driving solutions Mobileye Global (NASDAQ: MBLY).
While Kamala Harris hasn’t thrown her unwavering support behind the electric vehicle (EV) industry as she did in 2019, she is a staunch supporter of clean energy solutions. At the very least, we will likely see policy proposals focusing on improved fuel efficiency and reduced CO2 emissions for new vehicles if she is elected.
But newer vehicles are becoming increasingly dependent on technology for operational efficiency and safety. Harris’ cleaner energy policy, coupled with the prospect of tariffs being off the table – former President Donald Trump wants to impose tariffs on goods imported into the US – is likely to provide a meaningful boost to ADAS supplier Mobileye Global. As vice president, Harris has overseen the passage of the IRA and the Bipartisan Infrastructure Law, which provide tax credits for clean vehicles and investments in EV infrastructure.
Mobileye’s EyeQ chips power the end-to-end SuperVision platform, which consists of 11 cameras and autonomous vehicle maps that get smarter over time. If Harris simply maintains these clean vehicle tax credits and oversees the buildout of clean energy infrastructure, Mobileye should see demand for SuperVision steadily increase over time.
Moreover, Mobileye Global has an enviable amount of cash. It ended the June quarter with $1.2 billion in cash and cash equivalents, and no debt. Even if electric vehicle sales hit a rough patch in the near term, Mobileye Global has the financial flexibility to weather the storm and thrive during Harris’ four-year term, assuming victory in November.
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Sean Williams has positions in NextEra Energy. The Motley Fool holds positions in and recommends NVR and NextEra Energy. The Motley Fool recommends Mobileye Global. The Motley Fool has a disclosure policy.
Prediction: 3 Unstoppable Stocks That Could Soar Higher If Kamala Harris Wins in November was originally published by The Motley Fool
