Vice President Kamala Harris has a slight edge in becoming the next president, according to Decision Desk HQ’s model. The Democratic Party could have a tougher time gaining control of Congress, though. Decision Desk HQ estimates that the GOP has a 54% probability of holding onto its majority in the House and a 71% chance of recapturing a majority in the Senate.
Still, it’s possible that momentum could swing toward the Democrats in the final weeks of the campaign. How might investors take advantage of such a scenario? Here are three no-brainer stocks to buy if Harris and Democrats sweep in November.
1. D.R. Horton
D.R. Horton (NYSE: DHI) would likely be among the biggest winners if Harris wins and Democrats control Congress in the upcoming elections. The company has been the largest U.S. homebuilder by volume since 2002. It operates in 121 markets across 33 states.
Harris has proposed a plan that she says will promote the construction of 3 million new homes over the next four years. She wants to give $25,000 to first-time homebuyers to help them with down payments. The Democratic presidential nominee also seeks to provide a tax incentive for homebuilders who sell homes to first-time homebuyers. Both proposals would almost certainly boost D.R. Horton’s revenue.
Another key reason many D.R. Horton shareholders might cheer a Democratic sweep is inflation. A survey of nearly 40 top U.S. economists by the Financial Times and the University of Chicago found that 70% believed Harris’ policies would lead to lower inflation than those proposed by former President Donald Trump. Lower inflation translates to lower interest rates — an important ingredient to D.R. Horton’s success.
Regardless of which party is in control after the elections, though, D.R. Horton should be in great shape over the long run. The U.S. continues to face a housing shortage. And there’s only one practical solution to the problem: Building more homes.
2. Brookfield Renewable
Democrats have been vocal supporters of renewable energy for years. Harris is no exception. She promises to “invest in building the energy industries of the future.” The Vice President also wants to cut red tape to allow clean energy projects to be completed quickly. Brookfield Renewable (NYSE: BEP) (NYSE: BEPC) could be a beneficiary of these policies.
Harris seeks to protect the energy security of the U.S. and keep the country from having to rely on foreign oil. While domestic production of oil and natural gas will be needed to achieve this goal, renewable power will be increasingly important.
Brookfield Renewable is one of the largest producers of clean energy with hydroelectric, wind, and solar facilities across the world. The company currently has an operating capacity of around 37 gigawatts, twice as much as it had in 2020. Its development capacity is roughly 200 gigawatts.
Two other factors should help Brookfield Renewable even if Democrats don’t win across the board in November. First, renewable power is already the lowest-cost energy alternative. Second, the demand for electricity is growing rapidly, especially with the surging number of data centers.
3. UnitedHealth Group
Harris has committed to making permanent the tax credits available to working and middle-class families purchasing health insurance on the Affordable Care Act (ACA) marketplace if elected president. She wants to accelerate the speed of Medicare drug price negotiations.
Both proposals should help companies that offer health plans on the marketplace and Medicare Part D prescription drug plans. UnitedHealth Group (NYSE: UNH) is the biggest health insurer in the group.
UnitedHealth Group offers individual and family health plans on ACA health insurance marketplaces in 26 states. Last year, the company enrolled 10.2 million people in Medicare Part D plans, including stand-alone plans and Medicare Advantage plans.
There’s a bigger tailwind, though, that should be more important to UnitedHealth Group over the long term than which party is in power in Washington, D.C.: an aging population. The number of Medicare enrollees is projected to soar by 2030 as baby boomers retire. Look for Medicare Advantage to become an even more important part of UnitedHealth’s business in the coming years.
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Keith Speights has positions in Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has positions in and recommends Brookfield Renewable and D.R. Horton. The Motley Fool recommends Brookfield Renewable Partners and UnitedHealth Group. The Motley Fool has a disclosure policy.
3 No-Brainer Stocks to Buy If Kamala Harris and Democrats Sweep in November was originally published by The Motley Fool
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