MW Trump Tariffs are rocking the markets, but investors are seeking refuge in these dividend names

By James Rogers and Philip van Doorn

Trump's latest tariffs have sent shock waves through the markets this week

The sweeping tariffs President Donald Trump announced Wednesday have sent shock waves through the markets, prompting widespread selloffs. Some investors, however, are seeking refuge from the storm in dividend names.

In a note released Thursday, Stifel analyst Barry Bannister recommended stocks that the firm defines as "defensive value" over "cyclical growth" amid the impact of tariffs.

"Sticky inflation and slower GDP (thus moderate stagflation) were our views entering 2025, and the trade war puts an exclamation point on pre-existing trends," he wrote. "We've recommended Defensive Value (Utilities, Pharmaceutical, Biotech Life Science, Healthcare Equipment & Services, Household Products, Commercial & Professional Services, gold, dividend yield and quality) which has effectively hedged this correction, especially versus Cyclical Growth (which is where much of Big Tech resides). That remains our preference."

Set against this backdrop, dividend payer Lamb Weston Holdings Inc. $(LW)$ led the S&P 500 index SPX on Thursday with a 10% increase, while the index fell 4.8%, with 81% of component stocks showing declines for the day. The frozen-potato seller's stock soared after the company gave a robust 2025 outlook when it reported fiscal third-quarter results. Lamb Weston paid $51 million in cash dividends to shareholders during the quarter, the company said. The company pays a quarterly dividend of 37 cents a share, for an annualized dividend yield of 2.48%, based on Thursday's closing price of $59.57.

Elevance Health Inc. (ELV) was also among the S&P 500 leaders Thursday, after the stock ended the session up 5.4%. Earlier this year the health company raised its quarterly dividend by 5% to $1.71 a share, for a dividend yield of 1.51% based on Thursday's closing price of $452.69.

Read: How growing your dividends may work better than picking high-yielding stocks

SBA Communications Corp. $(SBAC)$ - a real-estate investment trust that owns cellular towers - was another S&P 500 gainer, with the company's stock ending Thursday's session up 5.3%. In February the company increased its quarterly dividend by approximately 13% to $1.11 a share. That made for a dividend yield of 1.92% based on Thursday's closing price of $230.87.

Food retailer Kroger Co. $(KR)$ was close behind, climbing 5.2% in Thursday trading. The Cincinnati-based company paid a dividend of 32 cents a share during its recent fiscal fourth quarter for a dividend yield of 1.81%, based on Thursday's closing share price of $70.74. Speaking during a conference call to discuss the results earlier this month, Kroger Chief Financial Officer Todd Foley said that the company was committed to growing its dividend over time, subject to board approval.

Stocks with high dividend yields that bucked the market's dour trend on Thursday

For a list of dividend stocks that performed well on Thursday in the face of such a broad decline, we expanded our pool to the components of the S&P Composite 1500 Index XX:SP1500, which is made up of the S&P 500, the S&P MidCap400 MID and the S&P Small Cap 600 SML.

On Thursday the S&P Composite 1500 Index declined 5%, but 92 of its component stocks rose at least 1% for the session. Among those stocks, 19 have dividend yields that are at least double the S&P 1500's weighted dividend yield of 1.67%, as calculated by FactSet.

So we added one more stock, for a list of 20 with the highest yield among those whose share prices were up at least 1% on Thursday. Here they are, sorted by dividend yield.

   Company                           Ticker    Dividend yield  April 3 price changeIndustry 
   Altria Group Inc.                 MO                 7.05%                  1.3%Tobacco 
   Omega Healthcare Investors Inc.   OHI                6.93%                  2.0%REIT 
   Sabra Healthdare REIT Inc.        SBRA               6.80%                  1.7%REIT 
   Verizon Communications Inc.       VZ                 5.94%                  2.0%Telecommunications 
   Crown Castle Inc.                 CCI                5.85%                  3.1%REIT 
   Conagra Brands Inc.               CAG                5.23%                  1.5%Food 
   Kraft Heinz Co.                   KHC                5.19%                  2.3%Food 
   Flowers Foods Inc.                FLO                5.00%                  1.3%Food 
   CareTrust REIT Inc.               CTRE               4.64%                  1.1%REIT 
   FirstEnergy Corp.                 FE                 4.34%                  1.2%Electric Utilities 
   General Mills Inc.                GIS                3.94%                  3.0%Food 
   Campbell's Co.                    CPB                3.92%                  1.1%Food 
   AT&T Inc.                         T                  3.88%                  1.6%Telecommunications 
   Hormel Foods Corp.                HRL                3.69%                  2.7%Food 
   PepsiCo Inc.                      PEP                3.58%                  1.5%Food 
   Kimberly-Clark Corp.              KMB                3.47%                  1.6%Household/Personal Care 
   American Electric Power Co.       AEP                3.41%                  1.3%Electric Utilities 
   Exelon Corp.                      EXC                3.39%                  2.7%Electric Utilities 
   Duke Energy Corp.                 DUK                3.37%                  3.0%Electric Utilities 
   Philip Morris International Inc.  PM                 3.33%                  3.8%Tobacco 
                                                                                             Source: FactSet 

Click on the tickers for more about each company.

Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page

Don't miss: These companies tried to dodge China tariffs during Trump's first term. Now they're feeling the burn in Vietnam.

-James Rogers -Philip van Doorn

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April 04, 2025 09:31 ET (13:31 GMT)

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