The Trump election victory has left many people surprised, with some being in shock. However, now isn’t the time for investors to allow emotion to rule their actions. Certainly, Trump’s win may not be popular (except among those who voted for him), but it’s a reality that must be accepted. Although stock markets across the globe have fallen today, there’s still opportunity for long-term investors to profit. Here are three shares that could outperform the wider index over the medium term.
National Grid
National Grid (LSE: NG) offers defensive appeal at a time when the outlook for the global economy is highly uncertain. Since its financial performance is less positively correlated to the wider economy than is the case for most of its index peers, National Grid offers stability and consistency at a time when they’re in short supply. As a result, previous crises have shown that National Grid can become an asset to which nervous investors flock in order to find a degree of certainty.
Looking ahead, National Grid’s yield of 4.4% provides a return in excess of inflation over the medium term. Should the company’s share price fail to rise significantly in the coming months as uncertainty among investors remains high, this income return should provide a real-terms return for National Grid’s investors. As such, now could be a good time to buy it.
Imperial Brands
One sector unlikely to be affected by a Trump win is tobacco. Smokers aren’t about to change their habits just because there’s a new US President, with demand for cigarettes to remain constant in the short run. This means that Imperial Brands (LSE: IMB) has significant defensive appeal, while also having the potential to grow within a fast-changing tobacco industry.
Imperial Brands’ acquisition of the blu e-cigarette brand provides it with access to growing demand for e-cigarettes in the US, since blu is the second biggest brand in the US. When combined with its defensive characteristics, this makes Imperial Brands a hugely appealing defensive growth stock. And with its yield being 4.7% from a dividend covered 1.6 times by profit, its income return should stay ahead of inflation in the coming months.
Centamin
One sector that has soared following Trump’s victory is gold miners. For example, Centamin (LSE: CEY) has risen by around 8% today and more gains could be on the cards. That’s because gold is viewed as a store of wealth during uncertain periods. Since investors are unsure as to exactly what a Trump-led administration will look like, the popularity of gold could increase.
Centamin currently trades on a price-to-earnings (P/E) ratio of just 10.4, which indicates that there could be significant capital gains ahead. The company is increasing production and is on track to meet guidance for the full year. As such, even if US interest rates are raised next month, Centamin looks set to buck the wider trend and rise over the short and medium term.
