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How The 2020 Presidential Election Could Impact Energy Stocks

October 29, 2020 12:35 pm
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How The 2020 Presidential Election Could Impact Energy Stocks

Democratic presidential nominee Joe Biden and incumbent Republican President Donald Trump have very different stances on the energy sector.

Biden favors clean energy and a shift to renewables, while Trump has voiced support for the fossil fuel industry and the jobs it provides. 

Energy Stocks Under Trump: Oil stocks have been among the worst-performing sectors in the stock market. Trump has been a supporter of the sector and has supported some of the companies with tax breaks.

A win by Trump could help some of these large companies rebound, as a Biden win may be priced in. 
Two large fracking companies, Helmerich & Payne (NYSE:HP) and Patterson -UTI Energy (NASDAQ:PTEN), could see their share prices drop further if Biden wins, on a gloomy outlook for fracking long term.

A Trump win could boost shares of these stocks, which have each fallen more than 65% in 2020.

Related Link: Biden Win Would Prop Up American Electric Power’s Renewable Energy Plans, CEO Says

Energy Stocks Under Biden: One of the top-performing energy stocks in 2020 is NextEra Energy Inc (NYSE:NEE). The company is now the most valuable energy stock in the U.S. after surpassing the market cap of Exxon Mobil Corporation (NYSE:XOM).

NextEra is among the world’s largest wind and solar energy providers. The stock is up big in 2020 and could continue to run on a Biden win.

Another clean energy stock to watch is recent solar energy IPO Array Technologies (NASDAQ:ARRY). The company is a leader in the tracker market, a key component of ground-based solar panels.

The IPO was well-received with shares rising sharply in their first day and week of trading. Shares have since fallen to the level of their first day of trading. This stock could be a winner with a push for solar energy from Biden.

A win by Biden could hurt pipeline stocks, as the former vice president would shut down the Keystone XL and Dakota Access projects, according to Axios.

Dakota Pipeline owner Energy Transfer LP (NYSE:ET) and Keystone Pipeline owner TC Energy Corporation (NYSE:TRP) could have their businesses dramatically affected by a Biden win.

Benzinga’s Take: Another popular way to play a Biden presidency win is the Invesco Solar Portfolio ETF (NYSE:TAN). The ETF is up 126% year-to-date and could benefit from further spending on the solar sector under a Biden win.

Other clean energy ETFs for a Biden win are the ALPS Clean Energy ETF (BATS:ACES) and VanEck Vectors Low Energy ETF (NYSE:SMOG).

A win by Trump could boost some of the larger oil companies due to tax breaks and Trump’s support for fossil fuels over clean energy. A Trump win could create buying opportunities in the beaten-down oil sector. 

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