Election Day 2022 is over, and the dust from midterms is finally starting to settle. As of this writing, most key races have been called, with a few notable exceptions. However, the Republican “red wave” that pundits on both sides of the aisle had spent months forecasting hasn’t totally happened. And now, with results indicating a Democrat-majority Senate and a Republican-controlled House, partisan gridlock seems basically certain. As markets brace for turbulence in the coming weeks, investors are left to consider the best stocks to buy.
Wall Street doesn’t like uncertainty, but it does love gridlock. Of course, midterms tend to generate considerable volatility for financial markets. But in the weeks that follow, stocks often bounce back as the clouds of uncertainty shift. InvestorPlace’s Luke Lango believes that this latest election cycle will usher in a new bull market.
No election results will change the fact that rising inflation and further rate hikes still pose a threat to U.S. markets, however. Even as investors prepare for a historic market rebound, it may be best to proceed with caution. Wall Street may love gridlock, but not all industries do.
So, with that said, let’s take a look at the best stocks to buy that can withstand U.S. government gridlock.
Campbell Soup Company (CPB)
For cautious investors who like to hedge their bets, Campbell Soup Company (NYSE:CPB) is always a safe option. Although many high-growth stocks have spent the past six months steadily declining, Campbell has remained in the green. CPB stock has even managed to climb 18% year-to-date (YTD), demonstrating an impressive ability to withstand a raging bear market.
This company’s power as a safe harbor stock lies in its products. It’s a truly iconic brand that Americans have trusted for generations. In scary times, Campbell’s soup is even one of the first things consumers stock up on.
Like its foods, CPB stock may be unexciting, but it’s also reliable. Even rising interest rates won’t push the company’s sales down. Regardless of what the political landscape looks like, CPB stock is a good bet to safeguard any portfolio, making it one of the key stocks to buy amid gridlock.
Procter & Gamble (PG)
As InvestorPlace contributor Josh Enomoto advises, when investors meet “troubling economic circumstances” they should typically focus on “boring Dow stocks.” While this argument can be applied to CPB stock, Enomoto specifically points to Procter & Gamble (NYSE:PG) as a good example of a safe and boring stock.
P&G is often placed on lists of safe stocks to buy — and for good reason. Like CPB, it’s also a trusted name that makes products consumers need. Procter has a truly dynamic reach across many sectors as well, producing everything from baby care products to laundry detergent to toothpaste. If you need it, this company probably owns a brand that makes it.
The fact that PG stock has a foot in almost every major industry makes it a good stock to bet on in times of economic uncertainty. Like CPB stock, shares have a demonstrated history of steadily climbing even through the most troubled economies. A gridlocked government won’t affect PG stock too much, allowing the company to continue its upward trajectory come what may for markets. That lands it soundly on this list of stocks to buy.
Waste Management (WM)
It’s hard to get excited about companies in the trash business. Obviously, the sector is less than glamorous. But Waste Management (NYSE:WM) stock is certainly worth holding.
This company fills a true need. Through both bull and bear markets, people will always have garbage to take away. What’s more, Waste Management is attempting to revolutionize how it does business. Despite operating in what is often labeled as a dirty business, the company has won plenty of points on the environmental, social and governance (produce solar power and other types of renewable energy. This has helped save the company money amid rising gas prices.) scale, using its landfill properties to
Like Campbell, Waste Management has managed to stay in the green for the past six months. This shows a clear ability to withstand market volatility and weather the storms generated by politics. New gridlock may make it harder for more environmental policies to pass, but WM stock will be saved by the constant demand for Waste Management’s services.
Costco Wholesale (COST)
For investors seeking a play on the retail space prior to the holiday season, Costco (NASDAQ:COST) is definitely a tempting opportunity on this list of stocks to buy. The big box retailer operates a membership-centric business model that has served the company well in recent years.
Of course, COST stock has slightly dipped over the past six months, but it has also outperformed competitor Walmart (NYSE:WMT) over the same period. And, while the latter may be a tempting stock to buy for bad economic times, Costco has garnered a significant following of people who like to buy things in bulk. COST stock rose steadily during the pandemic and it hasn’t stopped gradually inching upward. Two years since the onset of Covid-19, Costco has proved to be a reliable hedge against negative economic forces.
Lockheed Martin (LMT)
Russia’s invasion of Ukraine led to a new demand for aerospace and defense technology, pushing LMT stock up this year alongside many of its peers. While what kind of aid the U.S. will be delivering to Ukraine moving forward remains uncertain, Republicans have historically prioritized funding defense initiatives. That will mean more demand for Lockheed’s products as well as more military contracts. All signs point to another excellent year for the defense sector leader.
Lockheed is well-positioned to rise in 2023, regardless of how the dust settles from midterms. Between the ongoing conflict in Ukraine and the threat that China may pose to Taiwan, the need for defense technology is undeniable. Additionally, LMT stock is an excellent dividend stock with a demonstrated history of generating consistent returns.
SoFi Technologies (SOFI)
For months, this fintech darling has been waiting patiently for its breakout. SoFi Technologies (NASDAQ:SOFI) provides a one-stop shop for banking and personal finance needs. One of the factors keeping SOFI stock from soaring has been the moratorium on student loan payments. Now, though, the moratorium is set to stop in January 2023. That means a clear shot to the top for shares.
Luke Lango has been bullish on SOFI stock for months; Lango expects it to boom in 2023. Recently, the analyst called SoFi’s current $5 price point the “best deal” he has seen. Others, like InvestorPlace contributor Faizan Farooque, have praised the company’s demonstrated growth and expansion initiatives. Looking forward, the new political gridlock will likely create more demand for SoFi’s services as well. In fact, the stock has the rare chance to benefit from both student loan forgiveness and the end of the payment moratorium.
First Solar (FSLR)
While government gridlock may make it harder for environmental policies to succeed, some green energy companies are still well-positioned to grow. As InvestorPlace contributor Larry Ramer notes, that specifically applies to many companies in the solar energy space.
First Solar (NASDAQ:FSLR) is at the top of this sector, an industry leader that has helped revolutionize solar technology in the United States. The company already operates multiple factories in the U.S. and plans to open more in the years ahead. Analysts have also praised First Solar’s backlog of projects.
Of course, alternative energy and green solutions are typically a Democrat issue. However, more and more conservatives have come out in support of solar and wind energy in 2022. So, the issue may not be as partisan as it once was. That may mean that a Republican House majority will look more favorably on initiatives aimed at funding green energy. First Solar has the potential to keep rising no matter what, but further support from Capitol Hill could help its sector grow even more over the next two years.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.