President-elect Trump has proposed sweeping changes to many areas like immigration, trade, taxes, etc. While Mexico stands to be highly impacted by amended trade policies, Canada will also be affected as it is a member of the NAFTA agreement. Some of the Canadian firms may benefit from any changes to the current policies.
RBC Capital Markets has published a list of 20 stocks that stands to benefit. From the article in Financial Post quoting the list:
TD Bank, Magna International and TransCanada are among the 20 Canadian stocks best positioned to gain from U.S. president-elect Donald Trump’s “good policies” while being somewhat sheltered from any downside, RBC Capital Markets said on Monday.
“Canadian companies stand to benefit from President-elect Trump’s policies in two ways: 1) The direct impacts from lower corporate taxes and fewer regulations and 2) The impact of stronger U.S. growth and the flow through to Canada both through better domestic growth and some of the knock-on impacts,” said RBC analyst Matthew Barasch in a research note.
“The offset to this is trade and the potential barriers that president-elect Trump might erect.”
Canadian companies could benefit if they have significant U.S. revenues (and therefore would get a boost from economic growth under Trump’s corporate tax cuts), are leveraged to U.S. growth, are positively correlated to rising interest rates, and could potentially be rewarded by tighter oil differentials and increased oil demand, Barasch wrote.
As such, RBC constructed a basket of 20 Canadian stocks set to win in the Trump era, while avoiding the fallout from the president elect’s “disruptive proposals.”
Some of the popular stocks in the list are: Toronto-Dominion Bank (TD), Manulife Financial Corporation (MFC), Canadian National Railway Co (CNI), Magna International Inc(MGA) and TransCanada Corp (TRP).
For the rest picks please visit the link below.
Source: 20 Canadian stocks set to win from Trump’s ‘good policies’, according to RBC, Financial Post
Disclosure: Long CNI, MGA and TD