President Donald Trump’s sweeping tariffs take effect on April 4, 2025. The “worse than worst case” tariffs have naturally caused the vast majority of stocks to decline significantly. It’s no surprise that investors are spooked. Tariffs on major trading partners are going to ripple through the economy and raise inflation. A recession could be on the horizon if the Federal Reserve feels pressured to hike rates again to combat rising prices. To make matters worse, retaliatory tariffs from other countries will likely slam international-scale businesses.

That said, there are always winners, no matter the situation, though they often slip under the radar while the broader market panics. These hidden gems could thrive precisely because of the tariffs. If the tariffs stick around, these stocks could end up being some of the biggest winners in the market.

American Water Works (AWK)
American Water Works (NYSE:AWK) is the largest publicly traded water and wastewater utility company. This is a company with very little exposure to tariffs and hasn’t been hit hard by the recent bout of tariff fears.

In Q4, the company reported solid financials. Revenue reached $1.2 billion, up 16.38% year-over-year. Net income increased 39.8% to $239 million, with net margins at almost 20%. it also pays a 2% dividend yield, so the stock is great for long-term insulation from tariffs.

The company doesn’t directly benefit from tariffs. Instead, the stock benefits from the disruptions tariffs are going to cause. Recent fears have caused AWK to deliver gains and it is up 9.25% in the past month as many are rotating their gains into stocks resistant to tariffs. The longer these tariffs stick around, the more AWK is going to benefit.

Not only that, if tariffs lead to inflation or economic slowdown, investors often turn to defensive stocks like utilities. AWK fits this mold perfectly due to its stable cash flows and dividends.

USA Rare Earth (USAR)
USA Rare Earth (NASDAQ:USAR) is a company focusing on creating a domestic supply chain for rare earths and key minerals. This stock has popped by over 22% after China retaliated by imposing its own tariffs and restricting rare earth exports to the U.S.

Even if tariffs are rolled back in the coming years, this is a company that I think is a solid winner during this trade war. China’s export restrictions have made investors realize a big vulnerability in the domestic supply chain. China dominates rare earths, and USA Rare Earth could benefit a lot if these export restrictions stick around. The restrictions have lit a fire under the ongoing plans to diversify rare earth supply chains.

Rare earth elements power everything from electric vehicle batteries and wind turbines to smartphones and advanced defense systems. China currently controls about 60% of global rare earth mining and nearly 90% of the world’s refined production.

UnitedHealth Group (UNH)
UnitedHealth Group (NYSE:UNH) has been in the news recently for all the wrong reasons, but investors are warming up to it as it is a company that can dodge tariff-related hits. The company has four segments split between its two core businesses. UnitedHealthcare is the health benefits arm that provides insurance, and Optum focuses on health services and technology.

Both do not have any direct exposure to tariffs. Hence, the stock market has rewarded the stock in recent weeks as the broader market fell. It is for the same reason that I think the stock could actually become a winner as more investors pile in to escape tariff pressures.

Healthcare stocks often get labeled as “defensive” because people don’t cut back on medical care during tough times. These stocks are very attractive in the current environment. Cantor Fitzgerald believes that UNH stock can reach $700. The long-term outlook is very sturdy.

Analysts expect EPS to grow to almost $30 for all of 2025 and then climb by around 12-14% annually through 2030. The safety here could give the stock a much bigger premium in the coming months if tariff fears stick around.

— Omor Ibne Ehsan

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Source: Money Morning