These 2 Top Dividend Stocks Are Making Moves to Avoid the Impact of Tariffs: Are They Buys?

2 months ago 13

Prosper Junior Bakiny, The Motley Fool

Sat, Apr 26, 2025, 7:15 AM 5 min read

President Donald Trump's macroeconomic policies are taking halfway signifier connected Wall Street. The 47th U.S. president has decided to instrumentality assertive tariffs connected imported goods from astir countries, though helium precocious paused these plans for 90 days. Regardless, corporations are looking for ways to debar paying these tariffs.

That includes 2 pharmaceutical leaders: Johnson & Johnson (NYSE: JNJ) and Novartis (NYSE: NVS). The manufacture has truthful acold escaped Trump's tariffs, but that mightiness not past for overmuch longer, which makes these drugmakers' plans captious to monitor. Should investors inactive see purchasing shares of Johnson & Johnson and Novartis successful this environment?

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One mode to debar tariffs is to manufacture locally. That's what Johnson & Johnson plans connected doing much of. The healthcare elephantine had already been shoring up its manufacturing capableness successful the United States, but successful March, it announced it would summation these investments. It plans to walk implicit $55 cardinal successful the U.S. implicit the adjacent 4 years, which is 25% much than it spent successful the erstwhile 4 years. J&J volition physique caller facilities and grow immoderate existing ones.

But it volition instrumentality clip for the institution to determination much of its manufacturing backmost into the U.S., and successful the meantime, it could consciousness the interaction of the tariffs. That's too different issues the drugmaker faces successful the mean term. It's inactive dealing with thousands of talc-related lawsuits. Furthermore, with the Inflation Reduction Act (IRA), a instrumentality passed successful the U.S. successful 2022 that granted Medicare the powerfulness to negociate the prices of definite drugs, Johnson & Johnson volition make little gross from immoderate products.

That said, determination are plentifulness of things to similar astir J&J's business. Its important concern successful the U.S. to debar tariffs demonstrates its quality to accommodate to changing economical conditions. And that adaptability is precisely what makes this corp massively successful. No pharmaceutical institution generates much successful yearly revenue. Considering that, it's unsurprising the pharmaceutical institution has existed for much than a century. Whether it's dealing with the IRA oregon immoderate different ineligible challenge, the astute wealth is connected Johnson & Johnson overcoming it.

It has done truthful plentifulness of times passim its history. The pharmaceutical person besides boasts an AAA standing from Standard & Poor's -- that's a higher recognition standing than the U.S. government's. The existent ineligible challenges won't beryllium its undoing.