Many Americans may not like how the 535 members of the U.S. Congress manage the nation's money. However, quite a few representatives and senators manage their own money pretty well. It's not uncommon for lawmakers' investments to handily beat the S&P 500.
Which stocks do members of Congress especially like? Here are the 10 high-profile stocks politicians have gravitated to most over the last three years.
1. Apple
Apple(NASDAQ: AAPL) reigned as the biggest company based on market cap for most of the last three years. It's not surprising, therefore, that it was also the most popular stock with U.S. representatives and senators.
The Capitol Trades website, which tracks politicians' investing activity, found that 42 members of Congress have traded Apple stock over the last three years. Even though some of those trades were sales, Apple has been a top stock for legislators. Many of them no doubt initially bought the stock largely because of the massive and loyal customer base for Apple's ecosystem of products and services.
2. Microsoft
Microsoft(NASDAQ: MSFT) is the company that finally knocked Apple out of the No. 1 spot based on market cap. It figures that the tech giant also ranks high on our list.
Over the last three years, 39 politicians have traded Microsoft stock. Democrats invested more in Microsoft than Republicans did. That was the general pattern with tech stocks as a group too.
3. Alphabet
Technically, Google parent Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) tied Microsoft with 39 lawmakers trading the stock over the last three years. However, Alphabet had fewer trades, so I've placed it at No. 3 on the list.
There has been more selling of Alphabet stock than buying on Capitol Hill in recent months. The most active stock trader in Congress, Rep. Ro Khanna of California, is a notable exception, though. Khanna has continued to buy Alphabet as well as other tech stocks.
4. Amazon
So far we've had nothing but "Magnificent Seven" stocks on the list. This streak continues with Amazon(NASDAQ: AMZN) claiming the No. 4 spot. Thirty-eight members of Congress have traded the stock over the last three years.
Amazon stands out for its bipartisan investment activity. The number of Democrats and Republicans trading the stock in recent years is almost the same. Amazon's commanding positions in the e-commerce and cloud-services markets appear to have attracted lawmakers nearly equally regardless of their political leanings.
5. JPMorgan Chase
JPMorgan Chase(NYSE: JPM) is the lone bank stock to make the top-10 list for legislators. Over the last three years, 35 members of Congress have traded the stock.
GOP representatives and senators have been drawn to JPMorgan Chase a little more than their Democratic peers. Although the bank stock hasn't been a big winner from the AI boom, it outperformed a couple of AI stocks on the list over the last three years.
6. Verizon Communications
Thirty-two politicians traded Verizon Communications(NYSE: VZ) stock over the last three years, according to Capitol Trades. That's enough to land the telecommunications giant in the sixth-highest position on the list.
Democrats traded Verizon much more than Republicans did, by more than a 2-to-1 ratio. The stock has been a loser in recent years, but Verizon's juicy dividend yield helped cushion the losses.
7. Johnson & Johnson
Johnson & Johnson(NYSE: JNJ) is the only healthcare stock in the top 10. It tied Verizon with 32 lawmakers trading the stock over the last three years. However, J&J is ranked behind Verizon because it had fewer trades during the period.
As was the case with Verizon, Johnson & Johnson pulled down politicians' portfolios, with the stock declining over the last three years. But the Dividend King's dividends continued to flow and grow throughout the period.
8. AT&T
Verizon is joined in the top 10 by another telecom stock -- AT&T(NYSE: T). Thirty-one members of Congress traded AT&T over the last three years, putting it at No. 8 on the list.
AT&T's story is unsurprisingly similar to Verizon's. The stock has fallen in recent years. However, its dividends have helped offset some of the pain.
9. Nvidia
Nvidia(NASDAQ: NVDA) has been the hottest megacap stock on the planet thanks to the skyrocketing demand for its graphics processing units (GPUs). It's attracted a lot of attention on Capitol Hill, with 29 lawmakers trading the stock over the last three years.
Interestingly, Democrats have executed more sale transactions than buys during the period while the opposite is true for Republicans. In recent months, though, members of both parties have sold Nvidia more than they've bought it -- likely reflecting politicians seeking to take profits off the table after the stock's huge gains.
10. PayPal Holdings
PayPal Holdings(NASDAQ: PYPL) takes the final spot in the top 10. Twenty-eight politicians traded the fintech stock over the last three years, according to Capitol Trades.
Both Democrats and Republicans made more sales transactions than buys of PayPal during this period. That's probably because of the stock's dismal performance. PayPal shares have plunged close to 75% since April 2021.
Which of these 10 stocks are the best picks now?
I think Verizon looks like the best pick for income investors thanks to its dividend yield of nearly 6.7% and 17 consecutive years of dividend increases. However, both AT&T and Johnson & Johnson are solid choices too.
Value investors should like the low forward price-to-earnings multiples of AT&T and Verizon. Don't overlook PayPal, though, especially with its growth prospects factored in.
What about growth investors? There are several potentially good choices. I'd go with Amazon as my top pick. Its profitability continues to improve. The company's cloud unit also has strong growth prospects.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of April 22, 2024
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Keith Speights has positions in Alphabet, Amazon, Apple, Microsoft, and PayPal. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, JPMorgan Chase, Microsoft, Nvidia, and PayPal. The Motley Fool recommends Johnson & Johnson and Verizon Communications and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short June 2024 $67.50 calls on PayPal. The Motley Fool has a disclosure policy.
