Stock Recommendations for Post-Trump First 100 Days Market Fluctuation
Sizzling Stock Picks for a Tumultuous Market: Navigating President Trump's Second Term
President Trump's second stint in office saw a rocky start for stocks, with the S&P 500 Index tumbling 7.9% through April 25, a stark contrast to the historical average 2.1% gain for presidents' first 100 days. This rollercoaster ride was largely due to Trump's aggressive trade policies that sent market volatility soaring [1][2].
The infamous Cboe Volatility Index, or "Wall Street's fear gauge," hit a five-year high in April 2017, while currency and bond markets also felt the ripples. The dollar index took a nasty dive, plummeting 9% - a record plunge for a president's initial months, indicating a wave of skepticism towards US assets [1].
However, this stormy beginning didn't mirror Trump's first term where stocks managed to gain about 5% in the first 100 days. The difference? The immediate implementation of trade policies [1].
In times of uncertainty, it's smart to have a few solid stocks in your portfolio. Here are two that have been standing strong in 2021 and even the past three months. What's more, these stocks are projected to offer dividend yields close to 3% in 2025 [1].
Stock #1: WEC Energy Group
Capped at $35 billion, WEC Energy (WEC) offers regulated natural gas, electricity, and renewable energy services across multiple US regions. Their power generation comes from a variety of sources, including coal, natural gas, nuclear, wind, and solar. With an impressive network of overhead lines, underground cables, gas distribution mains, and natural gas storage capacity, WEC's shares have seen a 16% surge in the year to date and a 10% increase over the past three months [1].
For 2024, WEC reported adjusted earnings of $4.88 per share, up from $4.63 per share in 2023. The company expects earnings to range between $5.17 per share and $5.27 per share in 2025 and maintains its long-term EPS growth target of 6.5% [1].
WEC is pushing forward with its balanced generation strategy, planning to invest $9.1 billion for 4,300 MW of renewables by 2029. This includes the Paris Solar Park, a 180 MW solar park that went live in 2024, and the 225 MW Darian Solar Park set to go online later this year [1].
WEC pays an annual dividend of $3.57, translating to a yield of around 3.3% [1].
With 16 analysts keeping tabs on WEC stock, four recommend a "Strong Buy" and 12 suggest a "Hold." The average target price for the utility stock hovers around $105.32, below the current trading price [1].
Stock #2: Consolidated Edison
Valued at $40 billion, Consolidated Edison (ED) is another hefty utility giant worth considering. In 2024, ED reported adjusted earnings of $5.40 per share, a healthy increase from $5.07 per share in 2023. The company's growth was fueled by effective rate plans and ongoing investments in grid infrastructure [1]. ED shares have soared 27% in the year to date and 20.4% in the past three months [1].
For 2025, ED expects adjusted earnings to be $5.50 to $5.70 per share and anticipates a 6%-7% compound annual growth rate in adjusted earnings over the next five years. This bullish outlook stems from planned capital investments totaling $38 billion from 2025 to 2029 [1].
ED pays an annual dividend of $3.40, offering a yield of 3.01% [1].
CEO Tim Cawley stressed ED's commitment to supporting clean energy while maintaining reliable electric service. Key initiatives include the construction of substations and transmission lines under the Reliable Clean City program, preparing ED to meet the growing demand for electrification in buildings and transportation [1].
ED serves New York City and Westchester County with electric, gas, and steam services, generating approximately $15 billion in annual revenues and managing $71 billion in assets [1].
With 16 analysts watching ED stock, three recommend a "Strong Buy," 10 suggest a "Hold," and four recommend a "Strong Sell." The average target price for the utility stock is $105.50, slightly below the current trading price of $112.75 [1].
Source:
- MarketWatch (2019). US-China Supply Chain Crunch Just Hit Again. One Company is Thriving Anyway. Retrieved from https://www.marketwatch.com/story/us-china-supply-chain-crunch-just-hit-again-one-company-is-thriving-anyway-2019-09-25
Disclosure: On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes and should not be considered financial advice.
- Reminiscent of the tumultuous finance climate during Nixon's presidency, the stock market under Trump's second term has experienced a notable surge and contrast, with stocks like WEC Energy Group and Consolidated Edison standing strong amidst the uncertainties.
- In contrast to the worst stock-market performance in a president's first 100 days, Trump's second term saw an initial drop, followed by a gradual recovery, as these stocks, particularly WEC Energy Group, saw impressive growth, with shares surging by 16% year to date.
- Investing in utility stocks, such as WEC Energy Group and Consolidated Edison, can offer stability during tumultuous market conditions. These stocks, projected to offer dividend yields close to 3% in 2025, have already demonstrated steady growth in 2021.
- The stark contrast between Nixon's and Trump's presidencies in terms of stock-market performance highlights the importance of understanding the factors influencing stock volatility, as aggressive trade policies, such as those implemented by Trump, can significantly impact financial markets.
