Why Investors Should Own Businesses That Can Win Under Any Administration

It is easy to get excited about big news events, and few things have been bigger lately than politics. Regardless of your political views, tying your investment strategy to a Republican or Democratic success story isn't likely to set you up for long-term investment success. Why? Because the United States holds elections every two years.

In other words, the political winds can change very quickly. And they often do, noting that the big Democratic win in the midterm elections came just two years after a big Republican win during the presidential election. This is why you may want to consider buying companies like Procter & Gamble (NYSE: PG), Federal Realty (NYSE: FRT), and NextEra Energy (NYSE: NEE). Here's a deeper dive into each one and the sector they represent.

Image source: Getty Images.

Procter & Gamble: You aren't going to stop buying toilet paper

Procter & Gamble is one of the world's largest consumer staples companies. It is a Dividend King, with over 50 annual dividend increases. It offers an attractive and well-above-market 2.6% dividend yield. But the real story here is that it sells products you are going to buy regardless of who occupies the White House or controls the Senate and House. In fact, you'll keep buying the toilet paper, toothpaste, and cough medicines that P&G makes right through bear markets and recessions, too. These products are life necessities.

What makes P&G extra attractive is that it has long focused on leading the industry through innovation. The goal is to make products that customers are willing to pay for, which was on clear display in the first quarter of fiscal 2027. Despite budget tightening among consumers, P&G organic sales rose a healthy 4%. P&G is a very well-run consumer staples business, and even the most conservative investor should feel comfortable owning it for the long term. But the business is a strong representative of a sector whose demand isn't tied to the political cycle.

Location, location, location will always matter

Fedearl Realty is the only Dividend King real estate investment trust (REIT). It uses a sharpshooter approach, owning only about 100 strip-mall and mixed-use properties. Essentially, its properties are located in areas with large populations of wealthy customers. It also invests significant time and money in development and redevelopment to ensure its properties are leading destinations in the regions they serve. Retailers want to be located in Fedeal Realty assets because the locations can't be replicated.

The stock's yield is hovering around 4% right now, but the real story here is all about location, location, location. A REIT with a great portfolio of assets isn't watching the political cycle. It focuses on serving its tenants and their customers well because the properties it owns will remain for decades. Two years is a drop in the bucket. Federal Realty's dividend record sets it apart from its peers, but it represents an industry that can't make decisions on a two-year schedule. In fact, it can take that long to just build an asset.

Electricity is a necessity of modern life

NextEra Energy is one of the world's largest utilities. It has increased its dividend annually for 31 years. (Black Hills (NYSE: BKH) is a Dividend King utility, for those that want to stick to stocks with the longest dividend records.) NextEra operates regulated utility assets and owns a large portfolio of unregulated renewable power assets. The dividend yield is an attractive 2.9%.

On the surface, NextEra is tightly tied to politics because of its government-regulated operations. But there's a catch: the modern world couldn't operate without electricity. So NextEra has to learn to work with whatever political group is running the show, but every political group has a vested interest in having a positive working relationship with NextEra, too. That's the norm in the utility sector, even though tensions can arise at times. What's especially attractive about NextEra today is that it has two avenues for growth, operating in both regulated and unregulated spaces. Consumers and government leaders want it to succeed on both sides of its business.

Businesses that are resilient to the political winds win either way

It's easy to get caught up in the emotions of a moment, and politics can elicit very strong emotions. But you have to keep in mind that the political cycle in the United States is very short, which is why you should try to keep your investment plans separate from your political expectations. You want to own businesses, like P&G in the consumer staples sector, Federal Realty in the REIT niche, and NextEra Energy in the utility space, that have businesses that can succeed regardless of which party is currently in favor.

Reuben Gregg Brewer has positions in Black Hills, Federal Realty Investment Trust, and Procter & Gamble. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool has a disclosure policy.