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By now, we all know Big Bird's fate may hang on the elections, since Mitt Romney said during the first presidential debate that he'd pull the plug on PBS funding.

But what about Big Energy and Big Banks? And little companies of all stripes?

Winners all, if Romney is the victor.

In contrast, a second term for President Barack Obama would favor health insurance companies, hospitals and green energy businesses, among others. And the stock market overall has gained strongly since Obama took the helm, with the Standard & Poor's 500 Index ($INX) up 73%. Historically, stocks overall and the economy do better under Democrats.

Those are the key take-aways on how the election outcome might help -- or hit -- select stocks and sectors, according to more than a half-dozen money managers, analysts and political experts I spoke with recently.

Let's take a closer look and how stocks might move, depending on who wins.

Big banks expect big gains under Romney

A good way to figure out what's going on in any situation is to follow the money. With banks, the money trail tells us lenders think they'll do much better under Romney. How so? In campaign contributions, banks favor Romney by a ratio of about 2-to-1, points out Daniel Dorn, an associate professor at Drexel University's LeBow College of Business. And this isn't just business as usual. Last election, the split was more even, according to OpenSecrets.org, which tracks campaign contributions. (Find out more on financial giving on OpenSecrets.org.)

Image: Michael Brush

Michael Brush

Why are banks with Romney? For two main reasons, says Anton Schutz, of the Burnham Financial Industries (BURFX) fund, which has outperformed competitors over the past five years, according to Morningstar.

First, a Romney victory would boost business confidence, says Schutz. That should help the economy, which in turn helps banks. This scenario would be particularly good for the big banks with capital market operations doing things like issuing stock and debt for companies and managing initial public offerings.

Top on the list: Banks such as Goldman Sachs (GS), JPMorgan Chase (JPM) and Bank of America (BAC), all of which have contributed to the Romney campaign. They've given three or four times as much money to Romney as to Obama. Citigroup (C) and Morgan Stanley (MS) would also benefit, since they, too, have big capital market operations, says Schutz.

Second, Romney would help banks by repealing most or all of the Dodd-Frank financial reform legislation, believes Schutz. Indeed, during the debate last week, Romney confirmed he would "repeal and replace" Dodd-Frank regulations on banks. He's also said he'd roll back the Sarbanes-Oxley reform legislation passed in 2002, after the Enron and WorldCom meltdowns.

New regulations have been particularly burdensome for smaller regional banks, says the money manager. So they'd see some good upside, he says.

Among regional banks, Morningstar has four-star ratings (of a possible five) on the following:

  • City National (CYN), which focuses on serving the wealthy, primarily in Los Angeles. Wealthy clients are a plus, because they default less on loans, and they flood the bank with cheap deposits, says Morningstar analyst Michael Kon. The bank has also established a presence in New York City, and it recently expanded in San Diego and Nevada by purchasing failed banks.
  • Comerica (CMA), a Michigan-based bank that is expanding into California, Texas and Florida. Given its exposure to Michigan, which was hit especially hard by the recession, Comerica has had a lot of bad loans. But Morningstar analyst Maclovio Piña thinks that the bank has turned the corner on bad loans and that it has adequate capital to deal with any more that surface.
  • Wells Fargo (WFC), a superregional bank that is a favorite of Warren Buffett for its high-quality management. By avoiding the big mistakes other banks made during the credit bubble, Wells Fargo has positioned itself well to grow as the economy recovers, says Morningstar analyst Jim Sinegal. Following the 2008 purchase of Wachovia, Wells Fargo is now one of the four largest banks in the United States. It still has plenty of room to grow by cross-selling services to Wachovia customers.

Even if Romney fails to repeal Dodd-Frank regulations altogether, a GOP victory would boost sentiment toward banks, pushing their shares higher, believes Randy McLaughlin, of Baird Investment Management. "Banks are dirt cheap," he says, singling out JPMorgan Chase and PNC Financial Services Group (PNC).

Another company that would benefit if Romney wins is the student lender Sallie Mae, formally known as SLM (SLM), says Jason Benowitz, a co-manager of the Roosevelt Multi-Cap Fund (BULLX). A Romney victory would likely reduce the role of the federal government in student lending. "Then we would see an expansion of private education lending, and SLM is the largest private education lender," says Benowitz.

Health care: An Obama win is key

For obvious reasons, the election outcome is going to have a big impact on health care stocks. That's because "Obamacare," or the Affordable Care Act, brings huge changes to health care, creating many obvious winners, including insurers and hospitals.

Hospitals gain because Obamacare would extend health insurance to tens of millions of people who are not currently covered. That would help hospitals a lot by lowering their bad-debt burden, points out Ron Sloan, the portfolio manager of the Invesco Charter Fund (CHTRX). Most health insurers would gain simply because they'd have a lot more customers, says Sloan. "The whole idea of the health care act is to push another 30 million to 40 million people through the system," he says.

Companies that stand to benefit include HCA (HCA), the nation's largest hospital operator, Tenet Healthcare (THC) and Coventry Health Care (CVH). Insurers that would benefit include Aetna (AET), Humana (HUM), UnitedHealth Group (UNH) and WellPoint (WLP).

Since Romney has vowed to roll back Obamacare, and the election race is so tight, the stocks of these companies haven't fully priced in the potential gains under Obama. "A Romney victory would be a negative for the group, because it adds uncertainty," says McLaughlin. "For the group, it would be, 'Oh no, here we go again.'"

Indeed, this explains why many of the stocks above fell after the first presidential debate, which seemed to go to Romney. "Should Mitt Romney take the White House and Republicans win the Senate, full Affordable Care Act repeal will almost certainly be on," says Thomas Carroll, a health care sector analyst with Stifel Nicolaus. Even if Romney fails to repeal all of Obamacare, he could block much of it, points out Wells Fargo analyst Gary Lieberman.

Look for these stocks to rally -- and continue to do well -- in an Obama victory.

Energy: Drill, baby, drill

If Romney wins, expect solid gains for energy companies, as well as the companies that help with drilling, exploration and pipelines, says Cetera Financial Group. Analysts cite three main reasons.

First, Romney would likely give states more power to regulate exploration and production on their own turf and on federal lands inside their borders, says Wells Fargo analyst Gordon Douthat. He'd also likely limit the power of the Environmental Protection Agency to restrict production. "I think there is going to be a big push under a Romney administration to open up access to other parts of the country," says John Derrick, the director of research for U.S. Global Investors.

This would directly benefit energy producers that are pure plays on U.S. production, he says. One Derrick likes is Gulfport Energy (GPOR), which operates mainly on the Louisiana Gulf Coast and in Texas, Colorado and eastern Ohio. Two other companies that fit this theme are Pioneer Natural Resources (PXD) and Continental Resources (CLR), which do all, or most, of their production in the U.S., says Baird Investment Management's McLaughlin.

Second, Romney would likely take steps to increase deep-water drilling off U.S. coasts, says McLaughlin. This would be good for Noble (NE) and Ensco (ESV), which provide offshore drilling services. It would also help Oceaneering International (OII), which provides remotely operated submersible vehicles and other services for offshore drilling.

Third, Romney would likely approve the Keystone XL pipeline, says Sloan, of the Invesco Charter Fund. The pipeline would transport unrefined crude from the Athabasca oil sands region in Alberta, Canada, to refineries in Illinois and along the Gulf Coast of Texas. Pipeline approval would benefit engineering and construction companies Chicago Bridge & Iron (CBI) and Shaw Group (SHAW).

The shares of coal companies like Arch Coal (ACI), Alpha Natural Resources (ANR), Consol Energy (CNX) and Peabody Energy (BTU) bounced up after last week's presidential debate because of positive comments from Romney. "I like coal. I'm going to make sure we can continue to burn clean coal," he said.

But it's not clear that a Romney win would really help these companies, since one of their biggest problems is the low price of natural gas, which has companies switching from coal. "Coal's real problem is natural gas prices," says Sloan, of the Invesco Charter Fund. Romney can't change that.

A Romney victory would be bad news for green energy companies like First Solar (FSLR), says Derrick, because Romney would roll back federal support for this sector.

Defense stocks: Big winners in a Romney victory

Military spending is another key area where the two candidates disagree sharply. Romney says he won't cut defense spending. He's touted a plan to devote 4% of gross domestic product to military spending, says Wells Fargo analyst Sam Pearlstein. In contrast, Obama is likely to cut military spending to hit deficit-reduction targets.

That makes classic defense plays -- such as Lockheed Martin (LMT), Northrop Grumman (NOC) and Raytheon (RTN) -- winners in a Romney victory.

Lockheed Martin is the world's largest defense contractor, with a broad range of products, including the F-35 fighter jet, the C-130 Hercules and the C-5 Galaxy aircraft, missiles and surveillance systems. Northrop Grumman makes drones, manned aircraft and intelligence and surveillance systems. Raytheon supplies radars, sensors, communication equipment and cybersecurity products.

Morningstar's Rick Tauber has a high rating -- four stars out of five -- on a lesser-known defense company called SAIC (SAI). It supplies products used in intelligence, surveillance, reconnaissance, cybersecurity and logistics. These are all high-priority and high-growth areas of defense. This suggests SAIC would do well if Romney wins but also hold up well in a second term for Obama.

Tech stocks and midcaps: Winners with tax cuts

U.S. companies have more than a trillion dollars in cash overseas, which they're reluctant to bring home for tax reasons, says Andrew Busch, a public policy strategist at BMO Capital Markets. The money has already been taxed abroad. But under U.S. tax rules, it would get taxed again if it made the trip home.

Obama has suggested he'd take steps to make it easier to bring the money back. Romney says more definitively that he wants to eliminate taxes on repatriated funds quickly, though he has restricted himself to not making tax cuts that raise the federal deficit.

This change would be a huge benefit to tech companies, one of the sectors with the most money abroad. Apple (AAPL), Microsoft (MSFT), Cisco Systems (CSCO), Google (GOOG) and Oracle (ORCL) each have tens of billions of dollars sitting in foreign accounts. "They would be major beneficiaries of a Romney victory," says Busch. (Microsoft is the publisher of MSN Money.)

Busch also believes Romney's desire to cut corporate taxes and tax exemptions would help small and medium-sized companies. The reason: "They don't have the legions of tax attorneys to take advantage of all the exemptions," he says. "If we get Romney as president, these stocks would outperform," he says.

Be careful what you wish for

But what should we expect stocks to do overall do under either contender?

Wall Street obviously prefers Romney. And more than 100 CEOs recently surveyed by Wells Fargo said they expect a better business environment and less regulation under Romney.

But these folks should be careful what they wish for, if history is any guide. Since the 1930s, the economy, stocks and company profits have all posted higher gains during Democrats' administrations.

But politics and investing being as confounding as they are sometimes, that's not the end of the story. History also shows that on average a victory by a challenger, regardless of party affiliation, generates much stronger stock market gains than an incumbent win, says Citigroup strategist Tobias Levkovich. That's true for both the first year of office and during the full term.

Unfortunately, though, the worst outcome is also the most likely: Romney or Obama as president, with a divided Congress -- meaning something like we have now, with a House controlled by Republicans and a Senate dominated by Democrats.

Since 1901, the average stock gain in the first year under a Republican president with mixed Congress is -1.7%, says Wells Fargo. A Democratic president and mixed Congress has produced average first-year gains of just 0.2% for the S&P 500.

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The best result for investors, according to history, would be a re-election of Obama and a Republican takeover of Congress. A similar scenario has happened twice -- in 1933 and in 1997 -- and those were two great years for stocks.

At the time of publication, Michael Brush owned or controlled shares of the following company or fund mentioned in this column in his personal portfolio: JPMorgan Chase.

Michael Brush is the editor of Brush Up on Stocks, an investment newsletter. Click here to find Brush's most recent articles and blog posts.