Investing

Worried About China Trade Issues? 5 Stocks to Buy With Zero Exposure

American Electric Power

This industry-leading utility is also a solid dividend-paying company. American Electric Power Co. Inc. (NYSE: AEP) is one of the largest electric utilities in the United States, delivering electricity to more than 5.4 million customers in 11 states. It ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the United States. It also owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.

Many on Wall Street feel that the stock trades at a discount to its utility peers, and they feel it deserves a premium. Top analysts also think the company may sell generating assets and buy back shares with the proceeds, which would be also accretive.

AEP shareholders receive a 3.16% dividend. The $93 Merrill price target is higher than the $84.19 consensus target. Shares closed most recently at $84.83.

Jack in the Box

This top fast-food offering for investors to consider also has zero Chinese exposure. Jack in the Box Inc. (NASDAQ: JACK) operates and franchises Jack in the Box restaurants, one of the nation’s largest hamburger chains, with more than 2,200 restaurants in 21 states and Guam. Additionally, through a wholly owned subsidiary, the company operates and franchises Qdoba Mexican Eats, a leader in fast-casual dining, with more than 600 restaurants in 47 states, the District of Columbia and Canada.

Jack in the Box reported in late February fiscal first-quarter operating EPS above the consensus estimates, with lower selling, general and administrative expenses and tax rate driving the beat. Comparison sales tracked down 1% to 2% in the first seven weeks of the quarter but inflected after the company pivoted to a more value-oriented strategy.

Shareholders receive a 2.04% dividend. Merrill’s price objective is $94. The consensus target price is $91, and shares closed at $78.28 on Monday.

Kroger

This top grocer does almost all of its business in the United States. Kroger Co. (NYSE: KR) is the second largest U.S. food supermarket retailer and generates $120 billion in annual sales. Kroger operates roughly 2,800 supermarkets throughout 35 states and under two dozen banners. Kroger also sells fuel at 1,450 supermarket fuel centers and operates 2,268 pharmacies and 274 jewelry stores.

The stock remains very cheap, as Kroger has a market cap of under $21 billion despite massive sales each year. 2018 sales decreased 1.2% to $121.2 billion, but when excluding fuel, an extra week in 2017, the company’s convenience store business unit divestiture and the impact of a merger with meal-kit company Home Chef, total sales during the year were up 2.0%. This is slightly lower than the company’s adjusted sales growth of 2.2% in 2017.

Kroger shareholders receive a 2.19% dividend. Merrill has set its price target at $37. The consensus target is $28.26, and shares closed at $25.71.

There is a very good chance the president is bluffing to some degree, as a trade deal with China is something that is absolutely critical, as the United States is a huge buyer of the imported goods the People’s Republic. If tariffs are lifted even higher than the current percentages, it could put a huge dent in the Chinese economy.

In any event, these five stocks rated Buy have zero exposure, for the most part, in China, and they offer a degree of safety for investors worried over the potential for an all-out trade war.