The United States presidential election is just days away. In fact, over one-third of the electorate has already voted early via mail. Millions more will vote on November 3rd. The outcome could have a drastic impact on stocks listed in Canada and exposed to the economy south of the border.
There are likely to be clear winners and losers from the upcoming election. Canada’s energy and private equity firms, for example, would be boosted by a second term for the Trump administration. Meanwhile, renewable and export stocks will surge if Biden wins. However, in this article I want to take a closer look at three stocks that will surge regardless of who wins.
Election winner 1
U.S. real estate is undervalued and that fact doesn’t change after the election. While Biden is likely to focus on housing affordability, Trump is likely to focus on tax cuts and incentives for home buyers. Both scenarios are good for Tricon Residential Inc. (TSX:TCN) which owns and operates rental properties in the U.S.
While the real estate investment trust lost some value in March, it has quickly recovered since then. Now, the stock is up 4% year-to-date and offers a reasonable 2.55% dividend yield. However, the fact that American real estate is undervalued at the moment allows Tricon to scoop up more properties at bargain valuations.
Expanding the portfolio will allow the REIT to generate more cash flows in 2021 and beyond. Since both Trump and Biden are likely to implement fiscal stimulus measures to keep families afloat during the pandemic, Tricon’s rental income shouldn’t suffer much.
I believe this is a great bet for long-term investors.
Election winner 2
I own Barrick Gold (TSX:ABX)(NYSE:GOLD) for one simple reason: it’s an undervalued gold miner in an era of surging gold prices. Regardless of who wins the election, the U.S. (much like Canada) has a hefty debt burden to deal with. The U.S. Fed has already declared its intention to aim for higher inflation to reduce this debt burden over time.
That means the U.S. dollar is expected to lose value. This, in turn, makes gold more valuable. Barrick Gold is probably best positioned for such a surge. The world’s second largest gold miner has economies of scale to lower its cost of gold production. As the market value of gold rises, Barrick stock should follow along.
This trend is beyond politics, which means gold will continue to rise regardless of who wins the upcoming elections. That’s the reason Warren Buffett himself has a position in this company.
Election winner 3
Shopify is my final pick for an election-proof winner. Online shopping is a long-term trend that will sustain regardless of who takes office. The convenience and efficiency of shopping from the comfort of home is simply too compelling. Shopify’s growth is likely to go on for years.
That’s why it’s the perfect bet for investors who’re looking for a safe bet on election night.
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