It’s no secret that this year’s presidential election in the United States will significantly impact the stock market. Whether the market reacts with optimism or pessimism to the party and candidate that wins, there will be an overall shift in market dynamics. Considering the outcome of the first presidential debate back in June and the overall attitude toward President Joe Biden’s health, the current picture seems to be in favor of former President Donald Trump.
Much can change by November, but it’s a good idea to start preparing your portfolio for the inevitable reaction the market will have following the presidential election. Moreover, the energy sector will likely experience changes due to the differences between Trump’s outlook on fossil fuels and Biden’s. As such, energy stocks dependent on the extraction of oil and natural gas are likely to experience a generous bump if Trump turns back toward his pro-fracking and pro-domestic production policies.
Chevron (CVX)
Regardless of one’s stance on fossil fuels, Chevron (NYSE:CVX) remains a crucial player in the global energy market and stands to gain a lot from another Trump presidency. The company has constantly had to skirt around the Biden administration’s tight issuance of permits. It also faced recent pressure from the Federal Trade Commission regarding its Hess (NYSE:HES) acquisition to gain a foothold in Guyana’s oil-rich basins.
With Trump back in office, Chevron might have access to more exploration permits, and the FTC’s regulatory pressure could soften. Should these things occur in tandem, CVX stock would certainly see a boom following a Trump victory.
From a financial standpoint, CVX remains healthily in the green and offers a 4.19% dividend yield. Thus, CVX is attractive to long-term dividend-seeking investors who are realistic about the future of fossil fuels. As such, investors should keep an eye on CVX and energy stocks like it as the presidential election approaches.
Halliburton (HAL)
Arguably the most controversial company on this list, Halliburton (NYSE:HAL) remains a dominant force in the fracking industry. That’s because it remains one of the technological experts, having contributed to the development of fracking technology in the 1940s. Today, Halliburton offers a comprehensive range of services, from pressure pumps to fluid design. This positions the company to benefit significantly from any potential governmental shifts regarding fracking regulation.
Considering Trump’s prior support of fracking during his first presidency and his current campaign promises of new pipelines and renewed fracking on federal land, HAL stock has much to gain from a Trump win in November.
Moreover, the company consistently surpasses earnings-per-share expectations and concluded Q1 FY2024 with $5.8 billion in revenue and a 10.44% operating margin. As such, for investors seeking substantial returns in the event of a new U.S. president, Halliburton presents a promising opportunity.
Baker Hughes (BKR)
Baker Hughes (NASDAQ:BKR), a leading American specialist in oilfield services and equipment, which means it also has much to gain from Trump’s return. The company serves the oil and gas industry with a comprehensive portfolio of equipment and digital technologies designed to boost operational efficiency and safety.
This focus has made Baker Hughes a notable sustainability-oriented player in the fracking industry. Yet, that’s not as relevant as the business boom the company will see once fracking returns to its Trump-era successes. Baker Hughes’ strong reputation positions itself advantageously in the event of changing government regulations on fracking.
Moreover, BKR stock has successfully weathered the last four years of the Biden administration’s policies on domestic drilling and extraction. In fact, BKR is up 35% over the last five years and continues to improve its revenue YOY.
On the date of publication, Viktor Zarev 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.