3 TSX Stocks to Buy if Donald Trump Stays President

A Donald Trump win in November could provide a boost for stocks like CAE Inc. (TSX:CAE)(NYSE:CAE) and others.

| More on:

The United States Presidential election is less than a month away. It looks like the first debate between Donald Trump and Joe Biden will also be the last as both camps have dug in their heels on terms. Last week, I’d discussed which stocks could suffer if Trump stays President. Today, I want to look at three stocks that could thrive if Donald Trump hangs onto the White House.

Why this TSX stock can rise with a Donald Trump win

CAE (TSX:CAE)(NYSE:CAE) is a Montreal-based company that provides training solutions for the civil aviation, defence and security, and healthcare markets worldwide. Shares of CAE have dropped 38% in 2020 as of close on October 14. The aviation industry has been throttled this year, but it still boasts a promising defence division. Defence spending has ballooned in the U.S. under Donald Trump, and this has had a spillover effect in Canada.

In 2017, Canada pledged to boost defence spending by 73% over the next 20 years. That is good news for this TSX stock. It released its first- quarter fiscal 2021 results on August 12. Revenue fell 33% year over year to $550.5 million. Meanwhile, it reported a segment operating loss of $110.3 million – down from operating income of $113.3 million in the prior year.

Defence revenue fell 13% year over year to $280.2 million. This was largely due to delays in the execution of programs as a result of the COVID-19 pandemic. CAE is a TSX stock that looks like a buy-low candidate right now, especially if Donald Trump manages to pull off a win next month.

I’m bullish on this stock in 2020 and beyond

While the COVID-19 pandemic has hurt many consumer-driven sectors, alcohol is not one of them. Unlike cannabis, this is a space that is worth your attention no matter who wins in November. Younger consumers are drifting more to wine and liquor, which is great news for Corby Spirit and Wine (TSX:CSW.A). Donald Trump may be a teetotaler, but I’m buying alcohol stocks even if he wins.

Shares of this TSX stock have climbed 4.4% so far this year. Corby released its fourth-quarter and full-year results for 2020 on August 26. Net earnings rose to $26.7 million or $0.94 per share – up 4% from the prior year. Moreover, revenue increased 2% from 2019 on the back of a strong performance from Corby-owned brands in domestic and international markets. Its brands remained resilient in the face of the COVID-19 pandemic.

Corby stock last possessed a price-to-earnings ratio of 16 and a price-to-book value of 2.5, putting this TSX stock in favourable value territory. Better yet, it offers a quarterly dividend of $0.20 per share, which represents a strong 5.1% yield.

A Donald Trump win will also be positive for TSX stocks in the banking sector

Goldman Sachs recently projected that a Biden win would be positive for the U.S. economy and its banks. That does not mean a Donald Trump win will be a negative for this space. Trump’s tax cuts provided a huge near-term boost for banks in the U.S., as well as for Canadian institutions with a sizable footprint south of the border.

Royal Bank is Canada’s largest financial institution. This TSX stock has dropped 2.4% in 2020. It still has a favourable P/E ratio of 12 and a P/B value of 1.7. Moreover, it offers a quarterly dividend of $1.08 per share. This represents a 4.4% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan owns shares of ROYAL BANK OF CANADA. The Motley Fool owns shares of and recommends CORBY SPIRIT AND WINE LTD CLASS A.

More on Investing

Canada national flag waving in wind on clear day
Tech Stocks

Trump Trade: Canadian Stocks to Watch

With Trump returning to the presidency, there are some sectors that could boom in Canada, and others to watch. But…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Investing

Is Canadian National Railway Worth Buying for its 2.2% Dividend Yield?

Let's dive into whether Canadian National Railway (TSX:CNR) is a top buy for long-term investors at this point in the…

Read more »

nuclear power plant
Energy Stocks

Is Cameco Stock Still a Buy?

Cameco stock recently reported earnings that showed the Westinghouse investment is creating some major costs. But that could change.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

Start line on the highway
Investing

2 No-Brainer Growth Stocks to Buy Now With $5,000 and Hold Long Term

Market conditions today are ideal for growth investing, and two rising stocks are no-brainer buys in November.

Read more »