What is corporate lobbying and why does it matter for investors?

Corporate lobbying is when companies spend money to influence government policies, regulations, and legislation. For investors, companies that effectively lobby can gain significant advantages—like favorable regulations, tax benefits, government contracts, or protection from competition. These advantages can translate to stronger financial performance and more resilient business models, potentially making them attractive investment opportunities.

How do companies benefit from political influence?

Companies can benefit from political influence in several ways. They may secure government contracts (especially defense companies), shape regulations to favor their business models, obtain subsidies or tax breaks, protect intellectual property rights, or create barriers to entry for competitors. This political capital can translate into a more predictable business environment and potentially higher profits over time.

What is a "regulatory moat" in investing terms?

A regulatory moat refers to a competitive advantage that a company gains through favorable government regulations or relationships. Unlike traditional moats (like brand power or economies of scale), regulatory moats come from a company's ability to influence policy in ways that benefit their business while potentially creating barriers for competitors. These advantages can be particularly durable because changing regulations typically requires significant political capital and time.

Why might election years be important for these types of stocks?

Election years often serve as catalysts for companies with strong political influence strategies. During election cycles, these companies typically increase their lobbying and political contribution activities to build relationships with potential new lawmakers. This increased spending represents an investment in future policy influence. Additionally, market uncertainty around elections can sometimes create buying opportunities in companies with established government relationships, as these firms may be better positioned to navigate policy changes regardless of election outcomes.

What risks should I consider when investing in politically-connected companies?

While political connections can provide advantages, they also come with risks. Changes in administration or political sentiment can disrupt regulatory relationships. Public backlash against corporate political influence may damage company reputations. Excessive reliance on government contracts or favorable regulations can become a weakness if political winds shift. Additionally, high lobbying expenses might not always deliver the expected returns. Investors should consider these factors alongside traditional metrics when evaluating companies in this theme.

15 handpicked stocks

Friends in High Places

This collection features companies that strategically invest in political lobbying to influence policy and secure their competitive edge. Our analysts have carefully selected firms that leverage government relationships to create regulatory advantages and sustained profitability.

Han Tan | Market Analyst

Published on June 17

Top Picks from This Group

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Lockheed Martin Corporation

LMT

Current price

$499.79

As a top defense contractor, its revenue is heavily dependent on government contracts, making political influence essential for its business.

Boeing Company, The

Current price

$218.00

This aerospace and defense giant relies on government contracts and favorable aviation regulations, driving its significant lobbying efforts.

Exxon Mobil Corp.

XOM

Current price

$111.50

A leading energy producer, it lobbies extensively on environmental regulations, energy policy, and international trade agreements.

Chevron Corporation

CVX

Current price

$153.40

Altria Group Inc.

Current price

$65.75

Comcast Corp.

CMCSA

Current price

$30.73

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+10.79%

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About This Group of Stocks

Our Expert Thinking

These companies aren't just spending on lobbying—they're making strategic investments to shape regulations in their favor. By creating favorable regulatory environments and securing subsidies, these firms build powerful competitive moats that can lead to consistent long-term profitability.

What You Need to Know

This collection includes established companies in heavily regulated sectors like defense, energy, finance, and pharmaceuticals. Their significant political spending indicates a deliberate strategy of using government relationships as a business advantage, potentially offering resilience against regulatory changes.

Why These Stocks

We've identified companies that consistently rank as top spenders on lobbying and political contributions. These selections are based on public data showing both the scale and consistency of their investment in political influence, highlighting a clear strategic focus.

Group Performance Snapshot

10.79%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 10.79% over the next year.

13 of 15

Stocks Rated Buy by Analysts

13 of 15 assets in this group are rated Buy by professional analysts.

65.7% vs 4%

Group Growth vs Bank interest

This group averaged a 65.7% return last month, beating the typical 4% bank rate.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🗳️

Election Boost Coming

Major election cycles typically trigger increased corporate political spending as companies position themselves with potential new lawmakers. This could be a catalyst for many stocks in this collection.

🛡️

Regulatory Moat Advantage

These companies aren't just playing defense against regulations—they're actively shaping the rules of their industries. This creates lasting competitive advantages that more passive competitors simply can't match.

💼

Connected in All the Right Places

From defense contracts to energy policy and healthcare reforms, these companies have established strategic relationships with policymakers that can help them navigate changing political landscapes.

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