Is it possible that the high and mighty Amazon.com Inc. (NASDAQ: AMZN) might have finally become so big and powerful that politicians actually go after the company where it hurts the most? A report from Axios signals that President Trump is obsessed about Amazon. The points brought up by Axios generally have been well known for the better part of a decade, and state and local politicians have complained about these tax points for years. The president also has been vocal about Amazon and founder Jeff Bezos before on multiple occasions.
But when you consider the taxes angle, the real estate angle and even the political angle, it’s important to understand what would happen if the president and federal regulators really did go after Bezos and Amazon. The reality is that many companies would love to see Amazon get its wings clipped.
While the U.S. Postal Service has been addressed before, with mixed views, it’s important to look beyond a single report. If the president were to target Amazon in one of multiple ways, there are dozens of large companies that could easily benefit from the effort. In fact, their CEOs might even send thank you notes to anyone able to reign in Amazon’s might in retail. A few hundred cities and counties also might appreciate the potential sales taxes and the real estate taxes from the brick-and-mortar stores that have closed.
24/7 Wall St. has identified 10 large companies that probably would love to see President Trump or any other politicians and regulatory agencies go after Amazon in any manner possible. Two of these have been combined because they are so similar, and we have included dividend yields and the relation to past highs as an example. Again, this is just a sample of the companies, as there are literally too many to name that could benefit if Amazon gets targeted.
> Market cap: $22 billion
Digital Realty Trust Inc. (NYSE: DLR) is a real estate investment trust (REIT) focused on owning data centers with colocation and interconnection strategies for many of the largest companies and enterprises. While it is not a retail play, imagine how the company might win if Amazon Web Services (AWS) was somehow carved out of the online retailing strategy, with its thousands of vendors who use AWS and sell through the Amazon third-party platform. You could argue the same for other companies, but Digital Realty shares were last seen up 1.7% at $104.45 on Wednesday. That is down about 18% from its 52-week high of $127.23. Digital Realty now has a dividend yield of almost 4%.
> Market cap: $25.5 billion
Dollar General Corp. (NYSE: DG) would love to see Amazon get its wings clipped. While the “dollar store” has reached up and now includes many items priced well above a $1.00, the reality is that Dollar General competes against many retail categories now. It’s also hard to do online-only living with selling lower-priced items when consumers are often spending hundreds of dollars at a time through Amazon. Dollar General shares were last seen up 1.9% at $94.15, which is 11% lower than its 52-week high of $105.82.
> Market Cap: $6.2 billion
Kimco Realty Corp. (NYSE: KIM) is one of North America’s top REITs that owns and operates open-air shopping centers in major metro areas. If more and more people do not want to own cars, and if they don’t want to go out shopping indoors, they are far more likely to be an Amazon web potato. Kimco shares were last seen up 2.7% at $14.51, in a 52-week range of $13.69 to $23.03. And while it has a dividend yield of more than 7%, its shares are currently less than half of the $32 share price that was seen in mid-2016.
> Market cap: $21 billion
Now that Amazon has taken over Whole Foods, one obvious beneficiary would be Kroger Co. (NYSE: KR). Being a massive retailer competing with Walmart and Whole Foods was hard enough, but adding Amazon into the mix made this much more relevant beyond theory. Kroger shares were last seen up 1.8% at $23.90 on this report.