Which Stocks Will Benefit from the Stimulus?


Now that President Barack Obama has signed the $787 billion stimulus package, we can now take a deeper look to see which companies and funds may benefit.

To meet Obama's pledge to "save or create 3.5 million jobs and get our economy back on track," the package provides a plethora of perks.

To re-prime the retail pump, direct aid to individuals is slated to come in the form of a $250 one-time payment to Social Security recipients. For those of us still holding down a job, an income-capped $400 tax credit can be doled out in our paychecks as soon as withholding tables can be updated. Look for this money to begin to flow in the second quarter.

The two consumer-staples retailers favored by TheStreet.com Ratings' stock model are Wal-Mart (Stock Quote: WMT), at a "buy" rating of B, and BJ's Wholesale Club (Stock Quote: BJ) at B-. Tip-toeing into the shallow end of consumer-discretionary retailers, the model likes Family Dollar (Stock Quote: FDO), at B, and Dollar Tree (Stock Quote: DLTR), at B-.

To push ahead so-called "shovel-ready" building projects, the compromise puts forth $46 billion for road building and other transportation-development plans. While legislators bemoaned that this is just a drop in the bucket compared to the scope of our crumbling infrastructure and the need for job creation, it is a step in the right direction down the long, bumpy road to recovery.

One year ago and again last November, in my articles on funds favored by an Obama presidency, PowerShares Dynamic Building & Construction (Stock Quote: PKB) was offered as a potential beneficiary from expanded government construction contracts. This is still the case.

Two companies rated by our stock model in the "buy" range are in the right line of business to bid for a piece of the $19 billion in the stimulus package slated for revamping the way health care companies keep patient records. Both Transcend Services (Stock Quote: TRCR), rated at B-, and Computer Programs and Systems (Stock Quote: CPSI), rated at B, provide information-technology services to hospitals and other health care providers.

There is no guarantee that any of the companies or funds mentioned in this article will directly benefit from the stimulus package. However, there is something to be said for being in the right place at the right time.

For more information, check out an explanation of our ratings.



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