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Can a company’s efforts in lobbying pay off on Wall Street? It sounds too simple, but there may be some evidence to prove the theory true. In 2014, a team of researchers from Vanderbilt, Wake Forest and the University of Zurich drew a correlation between the amount of money spent on lobbying and market performance, outperforming their peers by 5.5 percent over a three-year period. Using data provided by OpenSecrets.com, here are the 10 publicly traded companies spending the most on lobbying in 2017.
Boeing Co. (NYSE: BA)
Boeing is one of the world’s largest aerospace and defense companies, providing commercial and military aircraft, technology and services. Boeing SEO Dennis Muilenburg recently said that defense contracts and international defense markets would continue to be a growth area for Boeing. Earlier this year the company complained that its potential competitor, Canada’s Bombardier, was receiving unfair government subsidies for a new aircraft. The result was that 300 percent tariffs were slapped on Bombardier’s C-Series planes.
Spent on lobbying: $17.02 million
2017 stock performance: 24.6 percent
AT&T (T)
This massive telecom company provides mobile and landline services, as well as television through DirecTV. Early in November it was learned that the Justice Department might block the company’s plans to purchase Time Warner (TWX), which owns news organization CNN as well as other cable outlets. The idea to buy Time Warner was controversial from the outset, but the news of possible DOJ intervention still came as a shock to investors, beating shares down at the time.
Spent on lobbying: $16.37 million
2017 stock performance: -17.7 percent
Alphabet’s search division Google has become synonymous with the search business but also has other key lines of business including the YouTube video channels and the Android smartphone operating system. The European Union recently hit the firm with $2.5 million in fines over anticompetitive breaches. The company is appealing, stating that there was insufficient proof of violations. In some sense, Google’s dominant market share makes it a victim of its success.
Spent on lobbying: $15.43 million
2017 stock performance: 29 percent
Comcast Corp. (CMCSA)
The company, which owns Comcast Cable as well as NBC Universal, announced recently that losses of subscribers continued in the third quarter. But it also said it would make other consumer offerings in addition to cable subscriptions. Despite the rise in the consumer preference for on-demand viewing rather than traditional television, the company seems happy with its broadcast division. “This is the fourth year in a row of NBC being in first.” chief executive Brian Roberts says. Still, the popularity of shows from Netflix (NFLX) and Amazon.com (AMZN) remains a growing threat to all traditional terrestrial and cable TV companies such as NBC.
Spent on lobbying: $14.33 million
2017 stock performance: 1.8 percent
Southern Co. (SO)
Headquartered in Atlanta, gas and electric utility Southern is perhaps better known to its 9 million customers by local brand names such as Southern Nuclear, Georgia Power, Mississippi Power and many others. The firm, which describes itself as “America’s premier energy company,” said earlier this month that it would sell stakes in as many as 26 solar power projects. The move partly takes advantage of a favorable market for such assets and also should raise cash to complete some existing nuclear power plants. Investors are looking for this type of long-lived assets, says Arthur Beattie, Southern’s chief financial officer.
Spent on lobbying: $13.9 million
2017 stock performance: 8.1 percent
DowDupont (DWDP)
The world’s largest chemical company got formed by the merger of DuPont and Dow Chemical Co. in late August. However, that is unlikely to last as the company plans to split into three by spinning out the agriculture and specialty products divisions into separate companies. Earlier this month the combined firm announced strong core earnings and revenue growth driven by higher volume and increased prices. Meanwhile, the company is slashing jobs and closing facilities to save an annual $3 billion in costs.
Spent on lobbying: $13.66 million
2017 stock performance: 25.1 percent
Lockheed Martin Corp. (LMT)
The continuing wars and other military conflicts in Afghanistan, Iraq, Syria, Ukraine, as well as rising tensions on the Korean Peninsula and in the South China Sea should sustain demand for high-tech military hardware and warplanes of the type that Lockheed Martin develops. The company, which is the biggest military contractor in the U.S., announced earlier this month that it would design an unmanned underwater drone for the U.S. Navy. The company is also behind the F-35 jet fighter, which is experiencing a shortage of spare parts, it was reported last month.
Spent on lobbying: $13.62 million
2017 stock performance: 22.2 percent
FedEx Corp. (FDX)
The company which started as a student project (and reputedly gained a “C” grade from a professor) has become synonymous with express and overnight delivery. The performance of the company is also seen as a bellwether of the entire U.S. economy because when people send a lot of packages, it means that there is a lot of economic activity. Despite feeling increased pressure from Amazon, FedEx says it expects to ship up to 400 million items this holiday season, up as much as 26 percent versus two years ago. Such a surge would be good for both FedEx and the market.
Spent on lobbying: $12.54 million
2017 stock performance: 20.3 percent
Northrop Grumman Corp. (NOC)
Like its peers Boeing and Lockheed Martin on this list, defense contractor Northrop Grumman has seen a boost in its stock price since President Donald Trump took office. It recently reported a 6 percent jump in sales driven in part by its aerospace division. Its MQ-AC Titron drones, or unmanned aircraft, will become the Navy’s new way to keep an eye on the oceans when they are deployed to the Pacific territory of Guam next year.
Spent on lobbying: $12.05 million
2017 stock performance: 27.4 percent
Exxon Mobil Corp. (XOM)
Headed until this year by Secretary of State Rex Tillerson, Exxon recently announced it would spend more than $1 billion a year on renewable energy sources including algae, biodiesel and fuel cells. Such ventures may be years away from commercial viability, but the company is planning for life after oil. “These areas are massively challenging, and if we can solve those, they will have huge impacts on our business,” said Vijay Swarup, vice president of research and development.
Spent on lobbying: $11.84 million
2017 stock performance: -4.3 percent
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Which Companies Spend the Most on Lobbyists? originally appeared on usnews.com
