You may not realize it or have thought of it, but lots of well-known American companies actually generate much of their revenue outside the U.S. For example, in its last reported quarter, ExxonMobil posted total revenue of $6.8 billion, 72% of which was generated outside the U.S. And McDonald's generated 59% of its revenue for 2024 outside the U.S.
Where a company's dollars come from may not always matter that much, but it matters now. With trade wars being waged and tariff uncertainty high, companies generating a lot of revenue abroad may face big price increases for their offerings, which could depress sales. (Such companies may benefit, though, if the dollar falls in value relative to other currencies.)
Image source: Getty Images.
Here, then, are some solid companies that generate most or all of their revenue domestically. If you're worried about the impact of tariffs, you might want to take a close look at some of them or some other companies with most revenues generated domestically.
1. Verizon Communications
Tariffs aside, Verizon Communications (NYSE: VZ) is a compelling investment candidate, as it recently featured a dividend yield of 6.4%. Part of the reason for that fat payout is that the stock hasn't soared lately. It is up a solid 14% over the past year (as of May 16), but its average annual gain over the past decade has been 3.2%.
What's going on? Well, the company is rather debt-heavy, something investors don't love to see. And it hasn't been adding postpaid wireless subscribers very rapidly. With its recent forward-looking price-to-earnings (P/E) ratio of 9.3, it may look like a bargain, but that number is quite near its five-year average of 9.1, and it's largely due to the company's slow growth.
Still, it does sport that hefty payout, and it generates plenty of cash from its various business lines to cover it. Its payout ratio, measuring the percentage of earnings paid out in dividends, was recently only 64%. So Verizon is an American company well worth considering if you're seeking income.
2. Kroger
Supermarket titan Kroger(NYSE: KR), with brands such as Kroger, Ralphs, Dillons, Smith's, King Soopers, Fry's, QFC, City Market, Shop-Rite, Fred Meyer, and Harris Teeter, recently boasted 2,731 stores, across 35 states and the District of Columbia.
The U.S.-based Kroger should be a good stock to own if you're worried about a recession, since it's a "defensive" business. That means its offerings -- groceries, drugs, fuel, and more -- are things people can't really do without when the market heads south. (Refrigerator makers and fitness-equipment companies are considered "cyclical" stocks, as they can see sales slip when consumers are stressed.)
It might surprise you to learn that over the past 15 years, Kroger has averaged annual gains of 13.7%. Some might dismiss it due to its low net profit margin (recently below 2%), but remember that it does a lot of volume. Lots of modest profits can add up.
Kroger's stock isn't exactly bargain-priced at recent levels, though, with its recent forward P/E ratio at 14, a bit above the five-year average of 12. That's not wildly overvalued, though, so if you plan to hold for a long time, you might still consider Kroger.
Note that it's a dividend payer, with a recent yield of 1.9%. Kroger has doubled that payout over the past five years, too.
3. UnitedHealth Group
UnitedHealth Group (NYSE: UNH) is a massive U.S. health insurance company, and it's recently been in the news -- and not for good reasons. For one thing, it's being investigated by the Department of Justice for possible Medicare fraud, and its CEO has just stepped down.
Such issues have sent the stock down by more than 50% recently, creating a buying opportunity for those who believe the company can turn itself around. Many companies do recover from such events, after all. (If you're not confident about its future, there are certainly other appealing stocks.)
Note, too, that some of the company's problems are quite addressable -- such as how it seems to have misjudged utilization rates of its services, leading to poor performance. And the lower price has pushed the stock's dividend yield up to 2.7%. UnitedHealthcare's forward P/E ratio was recently 10.5, well below the five-year average of 19.6. Consider buying some shares after further research, or wait and watch.
These are just three of many companies in the U.S. that derive much of their profits within American borders. They're the kind of company you might focus on if you're worried about tariffs driving up prices and depressing sales.
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Selena Maranjian has positions in Verizon Communications. The Motley Fool recommends Kroger, UnitedHealth Group, and Verizon Communications. The Motley Fool has a disclosure policy.
