Will the Corporate Tax Cuts Benefit the Investors?
The Republican tax Bill aimed at refueling United States economic growth prospects, has big benefits to offer to the corporations that are hitting the growth pedal hard to inch up their growth meters.
Though the states will starve with the impact of less income, corporations and individuals will benefit from this bill and in the long-term, as a result of increased economic activity, state governments will start seeing increased flow of income. Most importantly the overall GDP growth rate of the country will get invigorated for the long run.
On Friday December 22th, Donald Trump signed the much-touted Tax Cuts and Jobs Act into law, lowering the corporate tax rate from 35 percent to 21 percent. This is a major boost to the earnings of corporate companies.
Companies are not likely to keep the 15% direct and unmeasurable indirect benefits (at this time) in their pockets in the form of excessive capital, they are most likely to expand operations and look for opportunities to fasten their revenue and earnings growth. There will be increased economic activity.
In addition to the corporate tax cut, the tax rate on corporate income brought back to the United States was decreased to between 8% and 15.5%, instead of the existing 35%.
Play the Tax Reform Top Picks for January 2018
Some companies are well positioned to gain the most than others, due to the additional benefits they get in multiple ways as a result of strong improvement in business growth prospects driven by the tax cuts.
Experts on Stockchase picked stocks that are advantageously positioned to gain the most from the Tax cuts as their Top Picks.
David Burrows, President & Chief Investment Strategist, Barometer Capital Management – presented Comerica Inc (CMA-N) as a Top Pick
Ross Healy, Chairman, Strategic Analysis Corp has picked The Stars Group Inc (TSGI-T) as a Top Pick
David Burrows, President & Chief Investment Strategist, Barometer Capital Management – Picked United Rentals (URI-N) as Top Pick
Kash Pashootan, Sr.VP & Portfolio Manager, recommends Columbia Banking System (COLB-Q)
Mostly all the companies recommended above tend to benefit in multiple ways from the Tax cut, for example Comercia’s earnings generally get a boost from the tax cut. In addition, the company’s commercial lending exposure, that is already witnessing increased activity is likely to see accelerated growth further as a result of companies increasing expansion and merger activities with the help of increased earnings and debt
The above four stocks are the top picks recommended by experts at Stock Chase to play the Tax cut reform. They not only benefit from the tax cut reform, they also have multiple levers that will get effected positively due to the tax reform.
Top 6 Tax Links Refered to in this Post
- Comerica Inc – referenced by David Burrows
- United Rentals – referenced by David Burrows
- The Start Group Inc – referenced by Ross Healy
- Columbia Banking System Inc referenced by Kash Pashootan
- Gop tax bill winner
- Republicans Poised to Enact Transformative U.S. Federal Tax Reform