BMO Recommends Buying U.S. Stocks with Significant Domestic Sales Shielded from Tariffs

BMO says buy U.S. stocks whose large domestic sales are insulated from tariffs

The Resilience of Domestic Stocks in the Face of Tariff Concerns

At Extreme Investor Network, we understand that navigating the world of investing can be challenging, especially in an era where tariffs and trade policies loom large over the market landscape. Recently, BMO Capital Markets shed light on how some U.S. stocks may be better insulated from these uncertainties compared to their international counterparts. Let’s delve into the insights, emphasizing why domestic-oriented stocks could shine in these turbulent times.

Tariffs: A Cloud Over Corporate Profitability

The specter of tariffs has recently re-entered the conversation, as fears of potential retaliatory duties cast a shadow over investor sentiment. With President Donald Trump hinting at the possibility of imposing tariffs on nations levying similar charges on U.S. exports, attention has turned to how these levies might impact corporate profits. This environment has necessitated a reevaluation of investment strategies.

BMO Capital’s Chief Investment Strategist, Brian Belski, noted, “We have been bullish on America for quite some time… the U.S. will remain a critical source of growth in both economic and stock market performance in the upcoming years.” This bullish sentiment is crucial, particularly when considering the implications of tariffs on companies operating primarily within U.S. borders.

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The Bright Side: Domestic Stocks as Safe Havens

As tariffs loom on the horizon, U.S.-facing stocks are gaining renewed attention. According to Belski, domestic-focused companies could benefit from the current climate, where tariff fears are forcing investors to reconsider their portfolios. He stated, “More domestic-focused stocks are positioned to reverse this multi-year relative performance slide.” This is due not only to their relative protection from tariffs but also the strong macroeconomic data favoring the U.S. market.

Criteria for Resilience: A Deep Dive into BMO’s Analysis

To identify promising domestic stocks that are better positioned to weather tariff-related storms, BMO applied specific criteria, which we believe can also guide your investment strategies:

  1. Limited Foreign Revenue Exposure: Stocks with a five-year average foreign revenue less than 50% showcase a strong dependency on the U.S. market.
  2. Valuation Metrics: A full-year price/earnings-to-growth (PEG) ratio below that of the S&P 500 can indicate better valuation for growth potential.
  3. Strong Earnings Forecasts: Companies with earnings growth projections exceeding 10% for 2025 signal robust health and potential in profitability.
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Based on these criteria, three standout stocks emerged from BMO’s analysis.

Top Domestic Stocks to Watch

  1. AbbVie (ABBV)

    • Performance: Shares have advanced approximately 11% over the past year.
    • Recent Triumphs: AbbVie’s approval from the FDA for the treatment Emblaveo amplifies its growth potential in the pharmaceutical space.

  2. J.B. Hunt Transport Services (JBHT)

    • Performance: Despite a decline of over 23% recently, J.B. Hunt is turning challenges into opportunities.
    • Sustainable Initiatives: With initiatives like launching a solar facility to power its corporate campuses, the company is investing in sustainability and stability. Plus, a 2% increase in its quarterly dividend demonstrates a commitment to returning value to shareholders.
  3. Vistra Corp (VST)
    • Performance: A remarkable gain of over 21% in 2025 positions Vistra as a potential leader in the energy sector.
    • Market Trends: As demand surges for energy—especially from tech-driven sectors like artificial intelligence—Vistra stands to benefit significantly from this escalating need.
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Conclusion: Shaping Your Investment Strategy

In a world of shifting economic landscapes, focusing on domestic U.S. stocks presents a strategic opportunity for investors looking to navigate the complexities of tariffs and global trade policies. At Extreme Investor Network, we advocate for a balanced approach that considers both current market dynamics and long-term potential. The stocks discussed exemplify resilience in a challenging environment and could serve as valuable additions to any well-diversified portfolio.

Stay informed, stay prepared, and remember to leverage unique insights like those presented here to make informed investment decisions. Whether you’re an experienced investor or just starting, understanding market trends and adapting your strategy is crucial. Together we can thrive in this dynamic landscape!