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President Donald Trump's long-discussed overhaul of U.S. trade policies culminated in updated tariffs on more than 180 countries this week. This tariff plan has been anticipated for a while, and a lot was (and still is) at stake for thousands of American companies and their customers. Some of the country's most important imports will now face cost increases, and the global trade landscape is sure to be shaken up, with countries potentially retaliating with their own tariffs.
How Trump's tariff plan plays out remains to be seen, but some companies' operations are relatively safe from the impacts. One of those is Altria Group (NYSE: MO). If you're concerned about Trump's tariffs and want a stock that could weather the current storm, look no further than this high-dividend-yield tobacco giant.
Altria doesn't depend a lot on international imports
Altria Group owns popular tobacco brands like Marlboro, Copenhagen, Skoal, Black & Mild, and several others. It's the biggest tobacco company in the country by a decent margin and has been for quite a while.
As tariffs get placed on products like steel, aluminum, electronics, wood, and other commodities, one thing works in Altria's favor: Its tobacco comes from American sources, so it's largely shielded from the newly enacted tariffs.
Nearly all of Altria's revenue comes from tobacco sources. Of Altria's $24 billion in revenue in 2024, $21.2 billion came from smokable products (cigarettes and cigars), and $2.78 billion came from oral tobacco products.
The tobacco industry as a whole has faced tough times in recent years as U.S. adult smoking rates have dropped (down around 20% in the past decade), but this is one time when it could work out in Altria's favor, as the overwhelming majority of its revenue comes from tobacco.
A business built to withstand a recession
There are concerns that the new tariffs could put the U.S. economy on the path to a recession, as higher import costs could drive up inflation and hurt consumer spending.
There aren't 100% completely recession-proof businesses, but Altria is one of the more recession-resistant you'll find because of the nature of its business.
When money is tight, tobacco users will get rid of a lot of other expenses before completely doing away with their tobacco product of choice (for better or worse). That's why the tobacco industry tends to remain steady even when the broader economy is down.
This addictive nature of tobacco also gives Altria a lot of pricing power, which is how it has been able to offset declining smoking rates over the years and maintain relatively steady finances. Of course, this isn't to be celebrated, but it's the product's and industry's very real nature.