President Trump's proposed tariffs on Chinese goods recently sent markets plunging on fears of a trade war. Tit-for-tat tariffs would certainly hurt US companies that rely heavily on China, as well as Chinese companies which sell goods to the US.

However, investors shouldn't panic. There are still plenty of all-American companies that don't do business in China and are well-insulated from escalating trade tensions. Let's take a closer look at three dividend-paying stocks that fit the bill.

An American flag interposed with a $100 bill.

Image source: Getty Images.

Home Depot

Home Depot (NYSE:HD) operates 2,284 retail stores across the United States, Canada, and Mexico. Most of its stores are in the US, and it retreated from the Chinese market in 2012.

Home Depot has benefited from robust home sales over the past few years. The company also continues to improve its overall retail experience with higher investments in its e-commerce platforms, customer service channels, and supply chain improvements.

Between 2013 and 2017, Home Depot's annual revenue rose from $78.8 billion to $100.9 billion. Its earnings per share nearly doubled from $3.76 to $7.29 per share. Wall Street expects that momentum to continue with its sales and earnings rising 7% and 27%, respectively, this year.

Those are impressive growth rates for a stock that trades at just 18 times forward earnings. Home Depot also pays a forward dividend yield of 2.4%, which is supported by a low payout ratio of 47%. It's hiked that dividend annually for five straight years.


Altria (NYSE:MO), the maker of Marlboro, is the largest tobacco company in America. Thanks to the spin-off of its international business as Philip Morris International (NYSE:PM) in 2008, Altria generates almost all of its revenues from the US market. It also sells the Copenhagen and Skoal moist snuff brands, MarkTen e-cigarettes, and Ste. Michelle Estates wine.

A pack of cigarettes.

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Altria might seem like a risky play -- US adult smoking rates plunged from 42.4% to 15.5% between 1965 and 2016, according to the CDC. The bears will also note that tighter FDA regulations and tougher competition from British American Tobacco could hurt Altria. However, Altria consistently raises prices, cuts costs, and repurchases stock to grow its earnings amid tepid sales growth.

That's why analysts expect its earnings to grow 17% this year, even as its revenue rises a mere 1%. That's a solid growth rate for a stock that trades at just 15 times forward earnings. Altria also pays a hefty forward dividend yield of 4.6%, which is supported by a payout ratio of 48%. It's hiked that dividend annually ever since it parted ways with PMI.

Tanger Factory Outlets

Tanger Factory Outlets (NYSE:SKT) is an REIT (real estate investment trust) that owns a portfolio of 44 upscale outlet shopping centers across 22 states and Canada. Those properties are leased to over 3,100 stores, which are operated by more than 490 different companies.

Two women hiding in racks of clothes.

Image source: Getty Images.

Shares of Tanger fell 32% over the past 12 months due to concerns about e-commerce players gutting brick-and-mortar retailers and higher interest rates throttling demand for high-yielding REITs. However, I believe that Tanger's business is often misunderstood.

Tanger isn't a retailer, it's a landlord. This means that investors should only focus on occupancy rates, which hit 97.3% last quarter; and its average rental rates, which rose 12% annually. This means Tanger's tenants aren't going out of business, and they're willing to pay higher rental fees to remain in its outlets.

Tanger foresees some closures and a dip in occupancy rates this year, but analysts still expect its earnings to rise 47% this year (as it moves past remerchandising expenses from last year) as its revenue growth remains roughly flat. That growth sounds mediocre, but investors usually own REITs for dividends, not price appreciation.

As an REIT, Tanger pays out most of its profits as dividends. Tanger currently pays a forward dividend yield of 6.3%, and it's hiked that payout annually for 24 straight years.

The bottom line

Investors should keep up with the tariff news, but they shouldn't panic. For now, companies that don't rely on China -- like Home Depot, Altria, and Tanger -- could offer downside protection while generating steady income through the volatility.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.