The Cold War may be over, but the tensions that came with it are still cooling off, to say the least. And while the U.S. and Cuba are far from best pals, President Barack Obama has made it a priority in his second term to begin easing relations with our Caribbean neighbor. With time, the easing of economic sanctions should be a substantial growth catalyst, and there are more than a handful of ways investors can take advantage of this once-in-a-lifetime opportunity.
Here are six stocks and a fund that investors can use to buy into Cuba’s growth now.
Royal Caribbean Cruises (ticker: RCL). The cruise industry is frothing at the mouth for strict travel restrictions to be lifted, and for all intents and purposes, it has. The White House has given the thumbs-up to ferries and cruises between the U.S. and Cuba within the past year, and expect Royal Caribbean to take full advantage. In 2006, RCL acquired Pullmantur, a Spanish cruise line with a home port in Havana, perhaps unknowingly foreshadowing its eventual return to Cuban shores. Ten years later, that day is almost here.
[Read: 7 Tips to Help Your Portfolio Keep Up With Inflation.]
Marriott International (MAR). When it comes to betting on Cuba, don’t scoff at Marriott, one of a few prominent U.S. companies that have lobbied lawmakers to drop the embargo sooner rather than later. Why? Not only are there more than 300 million Americans 90 miles north of the island nation, but there are millions of Cuban-Americans who’d love nothing more than to legally visit their relatives — and they may need a place to stay when they get there.
Copa Holdings (CPA). Copa Holdings might not be a household name in the States, but this Latin American airline is primed to profit nicely from Cuba’s reignited economy. Investors will be happy to know that Copa already operates in Cuba, so there’s no speculation about whether the company will have exposure. Wall Street sees the correlation too; when Obama shocked the world and announced easing tensions between Cuba and the U.S. in 2014, shares of Copa Holdings jumped 7 percent in a single day.
[Read: Investors Should Reconsider Target-Date Funds.]
JetBlue Airways Corp. (JBLU ). Into playing the airlines but not necessarily sold on the future of Copa Holdings? JetBlue is your best bet by far. Through 2014, JetBlue had more exposure to the Caribbean than any other U.S. airline, and by a pretty substantial margin: JBLU controlled 12.5 percent of the market, while American Airlines Group (AAL) controlled 9.7 percent, followed by the field. JetBlue’s focus on the Caribbean is clear, and the fact that it’s significantly smaller than rivals like American Airlines and United Continental ( UAL) means Cuba’s impact will be more meaningful.
Stonegate Bank (SGBK). Looking for a longer-term play? Look no further than Stonegate Bank, a small-capitalization Florida bank that possesses some truly admirable opportunism. Taking advantage of the worst economic environment since the Great Depression, Stonegate snapped up several distressed competitors between 2009 and 2011. It’s poised to do something similar today, establishing relations with both the Cuban embassy and Cuba’s central bank. With those connections, Stonegate is positioned to handle business for U.S. companies licensed to do business in Cuba.
[See: How to Invest in Marijuana Legalization.]
Teletech Holdings (TTEC). You’ll be forgiven for not having heard of Teletech Holdings, but if you’re serious about figuring out the best ways to invest in Cuba, TTEC is definitely worth a gander. This consulting firm should be a major beneficiary as Cubans gain more access to capital, face less oppressive government restrictions and start their own businesses. As one of the smaller members of the “Engage Cuba Coalition,” the $1.3 billion Teletech has been lobbying for the end of the Cuba embargo and is poised to benefit as restrictions are lifted.
Herzfeld Caribbean Basin Fund (CUBA). The previous six stocks should all benefit as the U.S. and Cuba normalize relations, but each pick is also subject to company-specific risks. That’s something some investors may understandably want to diversify away from, and for those individuals, Herzfeld Caribbean Basin Fund may be just the right opportunity. This closed-end fund holds several of the stocks already listed above, and it tends to react very positively to any positive developments in U.S.-Cuban relations. Mind its premium to net asset value, but aside from that, CUBA is a solid play.
More from U.S. News
13 Stocks to Buy to Bet on China
12 Tips for Investors in Their 50s and 60s
8 Stocks Headed for a Fall in 2016
7 Ways to Invest in Cuba originally appeared on usnews.com