The 2024 U.S. presidential election season is heating up, with primary season coming to a close. But whether you're a Democrat, Republican, independent, or none of the above, election year stocks can be a great opportunity for your portfolio.
Even before the vote takes place on November 5, 2024, many stocks with election-related catalysts are likely to make big moves in anticipation of the outcome. As you might expect, some stocks tend to rise when presumptive Republican nominee Donald Trump appears likely to win a second non-consecutive term as president.
There are stocks that could rise if it becomes clear that the presumptive Democratic nominee, Joe Biden, will win re-election. In addition to these outcome-driven election-year moves, there are some stocks that could rise over the next four years regardless of who wins in November.
Let's take a look at these three election year stocks and see why each might be a buy heading into November.
GEO Group (GEO)
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geo group (New York Stock Exchange:geo) suffered a landslide defeat in the 2020 presidential election when the Democratic Party took back the White House. Immediately after his inauguration, President Biden issued an executive order phasing out the use of private prison operators such as Geo to manage federal prison facilities.
Although not impacting Geo's overall business, the EO was perceived as threatening the debt-laden company's prospects. As a result, GEO stock has fallen to multi-decade lows. However, since 2021, Geo stock has rebounded significantly, especially this year.
The company has won new contracts with other federal agencies. Geo has also successfully refinanced outstanding debt. But what's really driving GEO up are poll numbers that suggest Trump may win back the White House. If this trend continues, GEO could continue to rise as a Republican administration is likely to cancel the above EO.
Lockheed Martin (LMT)
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If you're looking for bipartisan election year stocks, look no further. lockheed martin (New York Stock Exchange:LMT). The occupant of the White House may change after the election, but what remains the same is that geopolitical contests will continue to intensify.
This includes rising tensions between the United States and China, Russia and Ukraine, and conflicts in the Middle East. With defense spending expected to continue rising for the United States and its Western allies, major defense contractor Lockheed Martin is likely to continue posting better-than-expected financial results.
That's not all. In addition to this geopolitical catalyst that could drive earnings growth and share price appreciation for years, LMT stock also has an attractive track record of dividend growth. At a current stock yield of 2.77%, LMT's dividend has increased by an average of 7.93% per year over the past five years.
Sturm Luger (RGR)
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Sturm Luger (New York Stock Exchange:R.G.R.) is one of the stocks to buy in an election year if you're betting on a “blue wave” this November. Firearm sales exploded during the pandemic, but demand began to decline starting in 2022. Since then, it has continued to decline.
As a result, Sturm-Ruger's sales and profitability declined. That's why RGR stock, which briefly reached over $80 per share in 2021, has now fallen to around $45 per share. But if Biden is re-elected, he could push for more gun control legislation, especially if Democrats retake the House and take full control of Congress.
New concerns about “gun grabbing” may emerge, similar to those during the Obama administration. If polls start to shift back toward Democrats, RGR and other gun stocks could start to rise again.
On the date of publication, Thomas Neal held a long position in GEO. He did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
