Presidential elections are important. Candidates typically have competing visions for the country. Those visions can produce winners in some areas — and losers in others. As a result, prudent investors keep a close eye on elections.
It’s not too early to think about which stocks could be winners depending on which presidential candidate wins. And there’s one Dividend King that could be a no-brainer buy if Kamala Harris defeats Donald Trump in November.
Go high, go Lowe’s
Most Americans are probably familiar with Lowe’s Companies (NYSE: LOW)The company is the world’s second-largest home improvement retailer, with a market capitalization of around $140 billion.
Lowe’s operates more than 1,700 home improvement stores in the U.S. It serves homeowners who are doing home improvement projects. The company also caters to professionals, including tradespeople, remodelers and property managers.
While Lowe’s shares are lagging behind the S&P 500 So far through 2024, it has beaten the market over the long term. For example, Lowe’s has more than doubled the return of the S&P 500 over the past 10 years.
Lowe’s is also a favorite of income investors. The company has paid a dividend every quarter since it went public in 1961. Lowe’s has increased its dividend for 51 consecutive years.
Why a Harris win could be good for Lowe’s
In August, Vice President Harris unveiled her plan to lower the cost of housing. She would provide up to $25,000 to first-time homebuyers to help with their down payments. First-time homebuyers would also receive a $10,000 tax credit. Harris’ plan also includes tax breaks to encourage the construction of starter homes and affordable rental housing.
How can this plan help Lowe’s? First, Lowe’s is focused on homebuilders. It even has a strategic alliance with the National Association of Home Builders that offers discounts to the organization’s members. Lowe’s should have the opportunity to benefit from any federal initiative that encourages new homebuilding.
But Harris’ plan doesn’t just spur new home construction. It should also spark a renovation frenzy for existing homes, especially those that appeal to first-time buyers. Again, Lowe’s would likely be a major beneficiary of any increase in home improvement projects.
Of course, a victory for Harris in November might not be enough on its own. If she is elected as the next president, she will need support in Congress to pass her housing plan.
A good choice regardless of which candidate wins
Lowe’s could be a no-brainer buy if Harris defeats Trump. However, the stock could be a good choice regardless of which candidate wins.
In the short term, lower interest rates could be a catalyst for Lowe’s stock. Federal Reserve Chairman Jerome Powell has strongly suggested that rate cuts are coming. When interest rates fall, mortgage rates usually do too. That spurs home purchases — and home improvement projects for existing homeowners looking to move into a new home.
Lowe’s should also have great long-term prospects. The average age of homes in the U.S. is over 40 years old. Home improvement projects will be needed for decades to come. And Lowe’s will be there to meet those needs.
Should You Invest $1,000 in Lowe’s Companies Now?
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Keith Speights has positions in Lowe’s Companies. The Motley Fool recommends Lowe’s Companies. The Motley Fool has a disclosure policy.
This Dividend King Could Be a No-Brainer Buy If Kamala Harris Beats Donald Trump in November was originally published by The Motley Fool
