Trump vs Harris: Dividend Plays Under Diverging Economic Visions
Income investors are carefully assessing the contrasting economic platforms proposed by President Donald Trump and Vice President Kamala Harris ahead of the 2024 election. With their conflicting policies on taxes, trade, energy and more, certain dividend-paying sectors and investment vehicles may flourish or founder depending on who occupies the White House.
Here's a look at potential dividend opportunities under each candidate:
Trump's Tax Cut Dividend Boost
Trump has made extending the individual and corporate tax cuts from his 2017 Tax Cuts and Jobs Act a central campaign promise. A second Trump term ensuring those tax reforms remain intact could provide a sustained tailwind for dividend payers across sectors:
Financials - The lower corporate tax rate allowed major banks and financial firms to boost payouts. Companies like JPMorgan Chase and Wells Fargo could keep increasing dividends.
Energy - Integrated majors like Exxon and Chevron announced hefty dividend increases after receiving hefty tax cut windfalls that would be cemented under Trump.
Consumer Staples - Firms like Coca-Cola and Walmart used tax savings to raise dividends and buy back more shares, further boosting yields.
REITs - The reformed tax code slashed rates for real estate investment trusts, allowing them to pay higher dividends. A Trump re-election would extend this setup.
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Harris's Renewable Dividend Play
On the other hand, Harris has outlined big policy shifts that could elevate some new dividend payers while pressuring existing yields:
Green Energy Dividends - Harris aims to unleash a renewable energy revolution catalyzing investment in wind, solar and other emission-free sources generating dividends.
Dividend Cuts for Fossil Fuels - Her clean energy transition could come at the expense of oil/gas firms currently yielding lofty dividends if regulations and taxes bite profits.
Bring Pharmaceutical Payouts - Harris has talked about allowing Medicare to negotiate drug prices, which could dent dividend growth at big pharma companies.
Housing Hike for Homebuilders - Harris's proposed $25,000 tax credit for homebuyers may elevate demand and dividend prospects for residential construction stocks.
Trade Policy Dividend Swings
Additionally, both candidates' stances toward trading partners like China have potential to reshape dividend profiles across industries sensitive to tariff disputes:
Manufacturers/Industrials - The dividend security of these firms remains challenged by lingering supply chain constraints under Trump's trade war footing.
Consumer Goods - Further decoupling from China under Trump could jeopardize dividends of multinationals relying on its consumer market versus Harris's multilateral approach.
Regardless of which candidate prevails, the divergent economic visions of Trump and Harris are poised to trigger major rotations among income stock winners and losers. Dividend investors will want to carefully assess the potential impacts and rebalance portfolios accordingly based on their assessments. As always, maintaining diversification across sectors and styles remains the wisest wealth-building strategy.
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America's Next Nightmare (has nothing to do with November)
Roosevelt failed to make it work during World War II. It failed again for Nixon in the ‘70s.
Right now, our government is so desperate, they're pulling the same dangerous maneuver... and when it inevitably fails this time, it could tip America into an economic nightmare.
It doesn't matter who the Dems select as their nominee – Biden has already set this in motion. Full details here.
