Red vs. Blue: 3 Stocks That Could Get a Boost From Political Division in the U.S.

Larry Ramer

February 28, 2024 4 min read

Politically, America is bitterly divided. Democrats fear and despise former President Trump, while Republicans have similar sentiments about President Biden. Most Americans are paying close attention to election coverage, and that number will only increase as we near November. Since a media outlet’s audience sizes dictate ad costs, well-known election coverage firms and political stocks will see a huge increase in their top and bottom lines this year.

Moreover, Trump’s strong anti-immigration, anti-China and anti-war views, have left many media firms opposed to him. Therefore, Biden’s campaign and allied political action committees will likely spend heavily on political ads, benefiting media outlets. With that said, here are three political stocks will get boosts from this highly contentious, expensive U.S. presidential election.

Fox (FOXA)

The Fox Corporation (FOXA) headquarters in New York City.

Source: Leonard Zhukovsky / Shutterstock.com

Many Republicans have grown disillusioned with Fox’s (NASDAQ:FOXA) flagship asset, Fox News. Of course, Fox News is a cable TV news and opinion station that caters to right-wing viewers. Last year, Fox News’ audience dropped to its lowest level since 2015.

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But nine of the top ten cable news shows in January were on the network, with its afternoon show, The Five, attracting an impressive 2.95 million viewers. Nearly 300,000 viewers in the coveted 25-54 age range tune into Jesse Watters Primetime.

As the campaigns heat up, Fox News should see a boost in numbers from Republicans and conservative independents. Both Democrats and Republicans will probably shell out a great deal of money to appeal to that audience, making FOXA an ideal option among political stocks.

Roku (ROKU)

The entrance sign at Roku San Jose campus. Roku produces a variety of digital media players that allow customers to access internet streamed video or audio services.

Source: Tada Images / Shutterstock.com

As the king of connected TV, Roku (NASDAQ:ROKU) should get a big bonanza from political ads this year. According to Insider Intelligence, 45% of “Digital political ad spend” will be devoted to connected TV, up from just 19% in 2020.

The total amount spent on digital political ads is expected to come in at $3.46 billion, so, based on Insider Intelligence’s forecast, about $1.56 billion will be devoted to political ads on connected TV. If Roku gets 30% of those funds, its revenue will be boosted by $468 million. That amounts to 13.4% of the firm’s 2023 revenue. So Roku is well-positioned to get a sizeable boost from political ad spending in 2024.

Also importantly, Roku’s forward price/sales ratio is just 2.36 times. That’s a low valuation considering that analysts, on average, expect its top line to jump 12% this year.

The New York Times Company (NYT)

A photo of a person reading the Feb. 16, 2020 issue of the New York Times.

Source: pio3 / Shutterstock.com

The New York Times Company’s (NYSE:NYT) flagship product, The New York Times, is one of the favorite news outlets of Democrats who despise Trump. As a result, it’s one of the political stocks likely to benefit a great deal from the 2024 election campaign.

Indeed, NYT already appears to be getting a big “Trump bump.” During the current quarter, it expects its digital-only subscription revenues to jump 11%-14% versus the same period a year earlier, and it predicts that its total subscription revenues will climb 7%-9%. On a negative note, the firm expects its total ad revenue to fall about 5% YOY. But I believe that guidance will prove to be conservative, and I think its ad revenue will surge for the rest of the year.

Also noteworthy is that NYT added a net total of 300,000 new digital-only subscribers in Q4, while its subscription revenues from digital products soared 7.2% YOY.

Last year, the firm’s free cash flow jumped to $338 million versus $113.7 million in 2022.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.