The good news for all of us is that in about seven weeks the political cycle will be over, at least as far as the presidential election is concerned, and we can concentrate more on other fall activities. While the polls have the race pretty tight, one thing is for sure: a victory by Donald Trump would favor a far different group of stocks than a victory by Hillary Clinton.
In an effort to be balanced, earlier we presented a selection of stocks that could have a favorable reaction to a Trump victory, so it’s only fair to put out the companies that could benefit if Mrs. Clinton emerges the victor. In a new research report from Deutsche Bank, they make the case that certain outcomes of the election could ratchet up the volatility big-time. For years Wall Street has always seemed to be happiest when power was split to some degree, and there was an element of gridlock.
The Deutsche Bank team has a 15 stock basket for a Clinton victory, we picked five that we think may do okay either way and some pay dividends as well.
This top bank stock is still down over 15% from highs that were posted last summer, and the company also posted very solid second-quarter results. Citigroup Inc. (NYSE: C) has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. It provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management.
Trading at a very cheap 9.8 times estimated 2016 earnings, this stock looks very reasonable in what is becoming a pricey stock market. A continuing stock buyback program at the bank is a positive. The company’s institutional clients group appeared to be holding its ground last quarter. While investment banking revenue was down in an unsure macro environment, trading revenue remained strong, up 2% from last year.
Citigroup investors receive a 1.35% dividend. The Wall Street consensus price objective for the stock is $54.07. Shares closed most recently at $46.59.
The huge social media leader has posted gigantic quarterly numbers that truly blew most of Wall Street away. Facebook Inc. (NASDAQ: FB) operates as a mobile application and website that enables people to connect, share, discover and communicate each other on mobile devices and personal computers worldwide.
Its solutions also include Instagram, a mobile application that enables people to take photos or videos, customize them with filter effects, and share them with friends and followers in a photo feed or send them directly to friends; Messenger, a messaging application for mobile and web on various platforms and devices, which enable people to reach others instantly, as well as enable businesses to engage with customers; and WhatsApp Messenger, a mobile messaging application.
Facebook also develops Oculus VR technology and content platform, which allows people to enter an immersive and interactive environment to play games, consume content and connect with others.
As of December 31, 2015, Facebook had 1.04 billion daily active users (DAUs) and 934 million DAUs who accessed Facebook from a mobile device. Most Wall Street analysts point to the fact that Facebook remains the top beneficiary of the adoption of mobile internet trends with total U.S. internet time spent on Facebook and Messenger.
The consensus price target is $155.34. Shares closed Monday at $128.65.