President Trump’s import tariffs are causing a lot of concern on Wall Street. The one-month reprieve on the 25% import tariffs on Mexico and Canada comes to an end on March 1.
The talk of reciprocal tariffs and auto tariffs continues to put pressure on stocks. Tariff talk has caused many investors to seek safe havens or take a risk-off approach to investing. While there’s no such thing as a 100% hedge, here are two safe havens to consider from import tariffs while also generating growth and income.
Goodyear: It’s Finally Going to Be a Good Year for This Company
[content-module:CompanyOverview|NASDAQ:GT]The nation's largest tire wholesaler, Goodyear Tire & Rubber Co.(NASDAQ: GT), may finally be seeing its turnaround efforts pay off. The company had been plagued with headwinds from weak auto sales to commodities inflation, which kept rubber prices high.
Famed activist investor Elliott Management took a $2 billion stake in the company in 2023, pushing for a turnaround, and its efforts may also be panning out.
The company has been divesting non-core assets and implementing its Goodyear Forward strategy, which has delivered over half a billion dollars in transformation benefits.
Here's How Goodyear Gains From Import Tariffs
While the talk of auto tariffs is spooking the autos/tires/trucks sector, Goodyear may actually benefit. Its competitors are all foreign tire makers like Michelin (OTCMKTS: MGDDY) and Bridgestone Co. (OTCMKTS: BRDCY), with manufacturing plants located in Mexico and Canada, making them susceptible to 25% tariffs.
Additionally, they source much of their rubber from China, which can add further costs. While Goodyear has 48 global facilities, it has 17 plants that manufacture tires in the United States.
Goodyear has the largest tire manufacturing footprint in the United States. These plants supply tires to the U.S., enabling them to bypass import tariffs. Additionally, less than 2% of their North American tire sales come from China.
In fact, import tariffs can be beneficial to them as there may be less competition from tariff-jacked imports, enabling Goodyear Tire to stay price-competitive. Goodyear also saw a surge in purchases from OEMs to front-run potential tariffs.
Goodyear Forward Plan Gains Traction in Q4
Under its turnaround strategy, Goodyear sold its Dunlop Brand to Sumitomo Rubber Industries for $701 million. The company expects to reduce its segment income by approximately $65 million per year.
[content-module:Forecast|NASDAQ:GT]The impact doesn't take into consideration other financial benefits resulting from the deal, including interest expense savings associated with the expected debt repayment.
Goodyear posted Q4 2024 EPS of 39 cents per share, beating consensus analyst estimates by 9 cents. Revenues fell 3.3% YoY to $4.95 billion, beating $4.85 billion consensus estimates.
Tire unit volumes reached 43.6 million. Adjusted net income was $114 million, down from $135 million in the year-ago period. Cash flows rose to $1.3 billion.
CEO Mark Stewart commented, "As I reflect on my first year at Goodyear, I am pleased with the progress we have made. We exceeded our full-year 2024 Goodyear Forward expectations and raised our targets for 2025, grew earnings and segment operating margins across all business units, and successfully reached agreements to divest non-core assets as part of our comprehensive strategic review. Moving forward, we remain committed to achieving our expanded Goodyear Forward targets, including further margin expansion and meaningful debt reduction.”
Exelon: Domestic Utility Focused With Minimal Import Exposure
[content-module:CompanyOverview|NASDAQ:EXC]Domestic regulated utility services provider Exelon Co. (NASDAQ: EXC) is a United States utility giant running power generation and distribution across Illinois, Pennsylvania, New Jersey and Maryland.
The company serves 10.7 million customers through six regulated transmission and distribution utilities. In 2022, it was split from deregulated power producer Constellation Energy Co. (NASDAQ: CEG).
The company doesn’t face import tariffs as everything is produced in the United States. Furthermore, as a utility stock, it provides a haven during volatile markets and offers a 0.50% dividend.
The freezing temperatures of the 2025 winter are spiking energy prices and consumption, which is bolstering its stock, which is trading up 15.28% year-to-date (YTD) as of February 21, 2025.
Solid Momentum in Q4 and Into the New Year
[content-module:Forecast|NASDAQ:EXC]Exelon reported Q4 2024 Eos of 64 cents, beating consensus estimates by 5 cents.
Revenues rose 1.9% YoY to $5.47 billion, crushing $4.51 billion consensus estimates.
The company plans to invest $38 billion in CapEx in the next four years, which is 10% higher than previously planned, to support grid reliability.
This will grow the base rate by 7.4% and operating EPS compounded annual growth of 5-7% from 2024 to 2028.
Exelon issued upside full-year 2025 guidance of EPS between $2.64 to $2.74 versus $2.63 consensus estimates.
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