Top Stocks To Take On Trump Tariffs

Tariffs Are Coming

Since returning to the White House in January, Donald Trump’s onslaught of tariff threats has left investors with a sense of whiplash. The latest development came on Tuesday when the Trump administration’s 25% tariffs on Canada and Mexico went into effect along with an additional 10% levy on the 10% tariff already placed on China. Beijing immediately launched a counter-attack, announcing a 10-15% tariff on U.S. agricultural exports, including soybeans, wheat, corn, and beef, starting March 10. Canada also hit back with its reciprocal tariffs, while Trump has warned that more proposed reciprocal tariffs will go into effect next month. In other words, the global game of tariff tennis is just getting started.

The latest tariff drama wasted no time reverberating across Wall Street. The S&P 500 (SPX) and Nasdaq Composite (COMP:IND) both lost more than 2.8% in afternoon trading on Tuesday, while the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ) lost around 1.2% and 0.32%, respectively. In comparison, the Dow Jones Industrial Average (DJI) shaved off over 1.2%—erasing $3.4T of ‘Trump Rally’ gains notched since inauguration day. The market mayhem follows data from the latest Conference Board Consumer Confidence Index, showing that consumer confidence tumbled by seven points in February—the lowest since August 2021. Confidence in the market isn’t any better. Only 46.8% of consumers expected stock prices to go up this year, down from 54.2% in January. And that was before this week’s massive sell-off.

The bears have the data on their side. Trump’s proposed tariffs could shave off S&P 500 Index earnings per share by 2-3%, according to a study by Goldman Sachs Research earlier this month. There are a few ways tariffs could impact corporate earnings:

• Companies could decide to absorb higher costs themselves, and profits could suffer.
• Companies could pass costs onto the consumer, and sales could take a hit.
• Tariffs could increase the value of the U.S. dollar, according to Goldman, an effect we’ve already seen play out in markets in recent weeks. A higher dollar could drag down the earnings of certain S&P 500 companies, which generate 28% of their revenues outside the US. (Less than 1% of S&P revenues are listed as explicitly derived from Mexico and Canada).

Whether you’re Team Bull or Team Bear, it doesn’t have to be a losing game. When the Trump administration first proposed imposing 25% tariffs on Canada and Mexico and 10% tariffs on Chinese imports, I advised readers to keep calm and carry on. Diversifying into stocks possessing strong fundamentals and healthy financials—while remaining disciplined in your existing investment approach—can protect your portfolio from potential volatility and invest opportunistically. In this piece, I outline three Strong Buy stocks that are defensively positioned for potential tariffs using Seeking Alpha’s Quant Ratings and Factor Grades.

Trump Tariffs: a Timeline and Market Reactions

Below is a timeline of key U.S. trade war moments since Donald Trump’s inauguration on January 20th, overlaid with the S&P 500. On February 1st, the Administration issued an executive order announcing tariffs on Canada, Mexico, and China, which would go into effect on February 4th.

Two days later, however, Canadian and Mexican tariffs were postponed for 30 days, and it wasn’t until early March that Trump announced they would go into effect on Tuesday, March 4. The Peterson Institute for International Economics has a more detailed timeline.

Polymarket, an online betting platform for future events, let traders speculate whether Trump would remove Mexican tariffs before March. The chart below compares this probability to the Consumer Staples Select Sector SPDR Fund (XLP). XLP rose nearly 5% from February 3 to February 28 as markets grew confident Trump would keep the tariffs. Investors favor this ‘defensive’ sector because it includes companies selling everyday necessities, which remain in demand regardless of economic conditions.

At the same time, traders also shifted their focus to the Federal Reserve, fearing a greater likelihood of Trump imposing Mexican tariffs and a potential trade war. In the middle of February, Federal Funds Futures priced in just one cut for 2025. By the end of last month, this grew to 2.6.

Which Sectors Will Perform the Best Under Tariffs?

In the face of an ongoing tariff war, consider non-cyclical stocks from sectors less impacted by economic downturns, such as consumer staples, healthcare, and utilities. Think stocks with dependable cash flow, reliable dividends, and strong fundamentals.

Each stock featured in this piece offers a consistent track record of earnings growth, excellent momentum, and income-generating potential, and possesses a “Strong Buy” rating based on its fundamentals. While tariffs may impact costs and supply chains, each of the companies I selected has demonstrated or should be able to explain how they offset the negative impact of tariffs and fluctuations in exchange rates with substantial gross profits and passing costs onto consumers.

Seeking Alpha’s Quant System—a blend of powerful computer processing and our special ‘Quantamental’ analysis—was developed to remove emotion from the investment process and identify high-performing stocks with excellent fundamentals from sectors that tend to outperform in bear markets. It analyzes the data of thousands of stocks from diverse sectors, then ranks them by value, growth, profitability, risk, and price momentum metrics vs. the broader sector to recommend “Strong Buy” picks. When it comes to bear markets, I also like to reference our Quant dividend grades, which rank stocks by their dividend safety, growth, and consistency to find companies that can provide extra stability.

1. Pilgrim’s Pride Corporation (NYSE: PPC)

• Market Capitalization: $13B
• Quant Rating: Strong Buy
• Quant Sector Ranking (as of 3/4/25): 6 out of 187
• Quant Industry Ranking (as of 3/4/25): 1 out of 54

The top-ranked Quant stock among Packaged Foods and Meats, Pilgrim’s Pride (PPC), has returned nearly 69% over the past year. As a multinational food product company, PPC is among the largest and top-performing chicken producers in the United States—and could see a potential boost in profits under Trump tariffs.

During Trump’s first term, trade tensions took a toll on U.S. pork shipments to Mexico in 2019. The country had previously been the biggest buyer of American ham, leading more Mexicans to turn to chicken—giving PPC a boost in its Q2 earnings that year. On the other hand, Mexico is PPC’s largest trading partner, a region where the poultry group has invested heavily in a new poultry farm in the Merida region. When asked about tariffs during its most recent earnings call in mid-February, CEO Fabio Sandri said he doesn’t expect “any important reduction” in trade volumes, but if it does occur, “will have the benefit of having our operation in Mexico. So, there’s a little bit of hedge for us.” Around 24% of its U.S. exports go to Mexico.

PPC also benefits from increased global demand for poultry, an industry estimated to grow from $360.5B in 2023 to $385.37B in 2024 at a compound annual growth rate of 6.9%. Those tailwinds were reflected in its Q4 2024 results: profits more than doubled per share to $2.3B due to lower chicken feed price, while adjusted EBITDA surged 70% to $525.7M. Sales missed expectations, however, falling 3.5% to $4.37B and causing shares to dip around 4% following the earnings release. The bird flu epidemic has also been a surprising source of headwinds for PPC. As SA analyst Harrison Schwartz notes:

Although counterintuitive, the bird flu is likely a positive headwind for Pilgrim’s because it lowers supply across many producers, reversing the previous poultry glut… Chicken inventories are very low, while soybean and corn stocks are high, over 30% above their 2021-2022 US levels. As a result, we can expect beneficial gross margin dynamics to persist for PPC into at least 2025.

With supply and demand on its side, let’s take a closer look at PPC’s underlying fundamentals.

PPC Stock Quant Breakdown

Winner winner, chicken dinner. With A’s across the board, PPC is a leading consumer staples stock for a reason.

PPC’s ‘A-’ Valuation Grade suggests that its shares are currently discounted compared to its earnings performance, with near-perfect trailing and forward PEG ratios of 0.05 and 0.2, respectively. A PEG ratio below one often indicates that a company’s shares are undervalued. With a forward price-to-earnings (P/E) ratio of 10.8x, a -40.9% difference from the sector median of 18.2, its valuation remains attractive with a healthy cash position.

PPC earns an A+ in growth, with year-over-year EBITDA growth of 112.5%, a 1,404.7% difference from the sector’s 7.5% median, and Y/Y EPS GAAP growth of 236%, an impressive 26,220% difference from the 0.9% sector median. Looking ahead, forward EPS diluted growth of 38%, a 489% difference, and forward free cash flow per share growth of 61.3%, a 778% difference, foreshadow more marginal expansion. Forward return on equity growth of 20.9%, a 6,162.3% difference, and Y/Y working capital growth of 50.3%, an 11,771.5% difference, reflect PPC’s consistent shareholder returns and reinvestment in Mexico operations and elsewhere.

Excellent profitability, including return on total capital (TTM) of 14.8%, a 103.5% difference from the sector, and return on common equity of 28.7%, a 171.2% difference, suggests that the company is benefitting from reinvesting in its business and its equity shares. PPC also boasts great momentum, with a one-year price performance of 70.6% compared to the -4.1% sector median as it continues to eclipse the S&P 500 and Tyson Inc. (TSN), its largest domestic competitor.

PPC Price Return vs. TSN and S&P 500 (as of 3/4/25)

With five positive EPS revisions from analysts over the past 90 days and one negative, Wall Street is also fairly confident in PPC’s continued success. My next pick also hails from the consumer staples industry and is unlikely to see tariffs interrupt its exceptional performance.

2. Brinker International, Inc. (EAT)

• Market Capitalization: $7.32B
• Quant Rating: Strong Buy
• Quant Sector Ranking (as of 3/4/25): 1 out of 481
• Quant Industry Ranking (as of 3/4/25): 1 out of 42

Restaurants tend to be more insulated from tariff constraints and trade wars because they rely less on imports. Currently ranked the top consumer discretionary stock and top restaurant stock by SA’s Quant System, Brinker International (EAT) remains high on my list due to an appetizing mix of growth, value, and profitability. The owner of fast-casual chains Chili’s and Maggiano’s Little Italy is serving up ‘Sizzlin’ Fajitas’ and sizzling returns, rallying 227.2% over the past 12 months. EAT achieved record results in Q2 FY 2024, an “otherworldly transformation” that CEO Kevin Hochman attributed to higher foot traffic, improved food, and an increased presence on social media. The aggressive turnaround strategy prioritized targeting budget-savvy customers amid prolonged inflation and redesigning its menu with social media in mind. New menu items like the “Big Smasher” burger and “Triple Dipper” gained significant traction on Instagram and TikTok, bringing in a new generation of price-conscious customers. Kitchen improvements have also helped spike sales.

We’ve been testing TurboChefs and restaurants and slowly expanding them for the past three years with very positive feedback from the operators,” Hochman told investors in January. “They cook the food much faster and much more evenly. They put out less heat, making the kitchen more comfortable for our team members. And they create superior-tasting products like crispier quesadillas and ribs with a delicious crust.

The company was actually able to lower the cost of its food in the second quarter despite inflation thanks to “sales leverage from top line growth,” Hochman added.

Like Chili’s $10.99 “3 for Me” promotion, EAT’s Quant Metrics reveal a tasty bargain.

EAT Stock Quant Breakdown

EAT made it into my Top 10 Stocks for 2025 and remains high on my list partly due to its solid valuation. Though scoring a ‘C’ in the category overall, an A-rated forward PEG of 0.5–64% below the sector median–shows that the company comes at a great discount to its peers. EAT’s forward P/E of 20.87, an 18% difference from the 17.7 sector median, reflects a decent value proposition. A forward price-to-book ratio of 21.7 weighs down its total valuation score. However, P/B ratios are limited, as they exclude intangible assets like EAT’s valuable brand equity and customer loyalty. An ‘A’ Growth Grade underscores the company’s blazing rally, with forward EBITDA growth of 29.7%, a 568.5% difference to the sector median, and forward EPS GAAP growth of 60.6%, a 714.2% difference. A forward free cash flow per share growth rate of 70.4% underlines the high potential for future growth and profitability.

EAT’s ‘A+’ Momentum Grade reflects Chili’s incredible turnaround on top of improvements at its other brands, even amid recent volatility with a three-month price performance of 22.4%.

The company’s overall ‘A’ earnings revision grade suggests even more growth potential. With 19 upward analyst revisions in the last 90 days, EAT looks like it may continue to deliver red-hot returns.

My next pick hails from the fintech world. Like restaurants, financial institutions are considered to be more resistant to tariffs than other sectors.

3. OppFi Inc. (NYSE: OPFI)

• Market Capitalization: $826.8M
• Quant Rating: Strong Buy
• Quant Sector Ranking (as of 3/4/25): 32 out of 689
• Quant Industry Ranking (as of 3/4/25): 4 out of 39

I recently compared OppFi (OPFI) with JPMorgan Chase & Co. (JPM) to see which was the better buy. OPFI emerged as a clear winner, driven by the Quant Ratings that showcased superior valuation, solid profitability, strong momentum, and high returns.

Powered by AI-driven underwriting, OPFI leverages its scalable tech platform and bank partnership model to serve consumers with less regulatory risk. In addition to its excellent fundamentals, the digital lender is propelled by powerful growth tailwinds, including heightened demand for small personal loans, particularly in lower-income brackets where access to traditional banking services is more limited. Focused on the subprime market, OPFI has risen as a more reliable alternative to payday loan providers, pawnbrokers, and other short-term lenders in the smaller but lucrative niche of high-yield credit. It’s crucial to point out that tariffs could negatively impact credit lenders, specifically triggering a decrease in loan demand under economic uncertainty. Nonetheless, the prospect of looser economic regulation under the Trump administration has led investors to pour funds into the financial sector, according to a note from Bank of America last week. And with limited to no exposure to imported goods to run its business, OPFI—and the financial sector as a whole—is fairly insulated from the more immediate risks of escalating tariffs.

OPFI posted strong results in Q3, reporting improvement across key growth and profitability drivers, including a 2.6% Y/Y increase in total revenue, a 12% Y/Y increase in total net originations, and a Y/Y average yield increase from 129% to 134%.

OPFI stock fell 16% on Monday, February 10, after hitting an all-time high of $17.73 that previous Friday. Investors pulled their gains after the stock had doubled over the past month and quadrupled over the past six months. However, as reflected by the Quant metrics below, I believe OPFI still has room to run.

OPFI Stock Quant Breakdown

Despite its extended surge, OPFI is still a great bargain, scoring an ‘A’ overall in the category. Its P/E ratio of 10.84 is nearly a 7.8% discount to the sector’s 11.74, while its ‘A+’ trailing PEG of 0.03 comes at a 94.7% discount. Trailing and forward price-to-sales ratios are a -76.7% and -86% difference to the sector median, respectively, further underlining why it could be a good idea to strike while OPFI is hot. The consumer lending platform has ‘A+’ growth metrics, OPFI including Y/Y EPS diluted growth of 775.9%, an impressive 12,553.7% difference from the sector median, and Y/Y return on equity growth of 92.3% versus the -3.7% sector median.

The fintech receives a ‘C+’ in profitability. The score reflects ‘A+’-rated return on common equity (TTM) of 31.5%, a 201.8% difference to the 10.4% sector median, and an ‘A’-rated gross profit margin (TTM) of 100%, a 68.8% difference to the 59.2% median. A ‘D-’ net income margin (TTM) of 2.8% weighs down its profitability score overall. Above all, OPFI’s ‘A+’ Momentum Grade underscores its lasting potential, with a six-month price performance of 102.7% coming in at a nearly 1,563.5% difference to the sector.

With solid fundamentals and powerful price momentum, OPFI is a small-cap stock poised for big potential returns.

Conclusion

While no sector is truly tariff-proof, exploring stocks from industries less reliant on global imports can be one way to protect a balanced portfolio in periods of economic uncertainty, particularly amid brewing trade wars and the ever-changing tariff timeline presented by the current administration. However, if you’re looking for additional stocks, consider Alpha Picks if you’re seeking a limited number of Seeking Alpha Quant’s best monthly ideas from the hundreds of top quant Strong Buy-rated stocks.

• I am Steven Cress, Head of Quantitative Strategies at Seeking Alpha. I manage the quant ratings and factor grades on stocks and ETFs in Seeking Alpha Premium. I also lead Alpha Picks, which selects the two most attractive stocks to buy each month, and also determines when to sell them.

This article was written by Steven Cress, Quant Team