Written by Eben Esterhuizen, CFA



Election season is upon us, and the state of the economy will likely be at the forefront of discussions. With that in mind, we wanted to identify the stocks that have historically shown a correlation to presidential cycles.
More specifically, we wanted to focus on stocks that do well during Democratic administrations, suggesting that these stocks might do well if Obama gains another term in office.

In a follow-up article, we'll focus on the stocks that do well under Republican administrations.

How We Created the List
To create this list, we analyzed the performance of thousands of stocks during Democratic administrations. Here are the dates we used for our calculation…

Democrat Presidents:
Jan. 20, 1993 – Jan 20, 2001 (Clinton)
Jan 20, 2009 – Present (Obama)

Interactive Chart: Press Play to compare changes in market cap over the last two years for the first nine stocks mentioned below.







IMPORTANT: A Word of Warning
Past performance of a stock is no guarantee of future results. Just because a stock performed well under past market conditions, it does not mean it will do so again in the future.

Also, correlation DOES NOT always imply causation. In other words, just because a stock did well during times of Democratic presidencies, it does NOT mean Democratic administrations will boost the value of the stock.

For each stock, we'll list the price change, and the alpha vs. the S&P 500 index. Only use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)

1. The Interpublic Group of Companies, Inc. (NYSE: IPG): Provides advertising and marketing services worldwide. On average, this stock outperformed the S&P 500 by 123.05% during Democratic administrations (ranked 115/500 companies = better than 77.0% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $9.97 to $42.47, a price return of 325.98% (alpha of 116.19%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $3.39 to $9.68, a price return of 185.55% (alpha of 129.91%). [Average Alpha: 123.05%]

2. ONEOK Inc. (NYSE: OKE): Operates as a natural gas distributor primarily in the United States. On average, this stock outperformed the S&P 500 by 183.71% during Democratic administrations (ranked 75 / 500 companies = better than 85.0% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $2.89 to $14.89, a price return of 415.22% (alpha of 205.43%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $24.41 to $77.53, a price return of 217.62% (alpha of 161.98%). [Average Alpha: 183.71%]

3. NiSource Inc. (NYSE: NI): Provides natural gas, electricity, and other products and services. On average, this stock outperformed the S&P 500 by 106.92% during Democratic administrations (ranked 130 / 500 companies = better than 74.0% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $3.67 to $15.53, a price return of 323.16% (alpha of 113.37%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $8.68 to $22.23, a price return of 156.11% (alpha of 100.47%). [Average Alpha: 106.92%]

4. OGE Energy Corp. (NYSE: OGE): Operates as an energy and energy services provider that offers physical delivery and related services for electricity and natural gas primarily in the south central United States. On average, this stock outperformed the S&P 500 by 86.42% during Democratic administrations (ranked 144 / 500 companies = better than 71.20% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $3.41 to $13.49, a price return of 295.6% (alpha of 85.81%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $21.7 to $52.66, a price return of 142.67% (alpha of 87.03%). [Average Alpha: 86.42%]

5. Harman International Industries Inc. (NYSE: HAR): Engages in the development, manufacture and marketing of audio products and electronic systems primarily in the United States, Germany and other parts of Europe. On average, this stock outperformed the S&P 500 by 100.59% during Democratic administrations (ranked 134 / 500 companies = better than 73.20% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $3.92 to $16.32, a price return of 316.33% (alpha of 106.54%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $17.26 to $43.2, a price return of 150.29% (alpha of 94.65%). [Average Alpha: 100.59%]

6. Helmerich & Payne Inc. (NYSE: HP): Engages in the contract drilling of oil and gas wells in the United States and internationally. On average, this stock outperformed the S&P 500 by 117.97% during Democratic administrations (ranked 120 / 500 companies = better than 76.0% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $3.05 to $13.44, a price return of 340.66% (alpha of 130.87%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $21.02 to $54.8, a price return of 160.7% (alpha of 105.07%). [Average Alpha: 117.97%]

7. Southern Union Co. (NYSE: SUG): Engages in the gathering, processing, transportation, storage and distribution of natural gas in the United States. On average, this stock outperformed the S&P 500 by 240.52% during Democratic administrations (ranked 54 / 500 companies = better than 89.20% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $2.64 to $15.5, a price return of 487.12% (alpha of 277.33%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $11.71 to $42.08, a price return of 259.35% (alpha of 203.71%). [Average Alpha: 240.52%]

8. Halliburton Company (NYSE: HAL): Provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. On average, this stock outperformed the S&P 500 by 71.86% during Democratic administrations (ranked 159 / 500 companies = better than 68.20% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $4.2 to $15.86, a price return of 277.62% (alpha of 67.83%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $16.05 to $37.16, a price return of 131.53% (alpha of 75.89%). [Average Alpha: 71.86%]

9. Johnson Controls Inc. (NYSE: JCI): Engages in building efficiency, automotive experience and power solutions businesses worldwide. On average, this stock outperformed the S&P 500 by 73.08% during Democratic administrations (ranked 158 / 500 companies = better than 68.40% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $2.26 to $8.56, a price return of 278.76% (alpha of 68.97%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $13.98 to $32.55, a price return of 132.83% (alpha of 77.19%). [Average Alpha: 73.08%]

10. PNC Financial Services Group Inc. (NYSE: PNC): Operates as a diversified financial services company. On average, this stock outperformed the S&P 500 by 112.88% during Democratic administrations (ranked 124 / 500 companies = better than 75.20% of companies). Between 01/20/1993 to 01/20/2001 (Bill Clinton): Price changed from $11.55 to $51.19, a price return of 343.2% (alpha of 133.41%). Between 01/20/2009 and 11/04/2011 (Barack Obama): Price changed from $21.24 to $52.67, a price return of 147.98% (alpha of 92.34%). [Average Alpha: 112.88%]




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Disclosure: Kapitall's Eben Esterhuizen does not own any of the shares mentioned above.

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Tickers in this Article: TEA, ESI, STRA, NFLX, WTW, BPI

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