Worried About Tariffs? 2 Safe Haven Stocks to Buy on the Dip With $500

Earlier this year, all three major indexes — the S&P 500, the Nasdaq, and the Dow Jones Industrial Average — slid as President Donald Trump announced his plan to impose tariffs on imports. Investors worried this would result in higher costs for U.S. companies as they import their goods made abroad — and this might sink earnings.

Since then, indexes have rebounded, and the S&P 500 even reached new all-time highs recently as Trump negotiated with countries and industries and it became clear that worst-case scenarios would be avoided. For example, Trump said that by investing in U.S. manufacturing, tech and pharma companies would be exempt from the tariffs.

Still, some companies have spoken of impacts from tariffs when reporting earnings — and uncertainty remains regarding tariff levels and their impact down the road. But I have some good news for you if you're worried about these levies. There are two safe haven stocks you can buy on the dip — and with $500, you can get in on both of them.

1. Pfizer

Consider that Pfizer (PFE -3.36%) recently scored a home run, removing not one but two risks: the tariff situation and Trump's efforts to lower drug prices. The pharma giant became the first to strike a deal with the president, and as part of this deal, it agreed to lower the prices of many of its drugs — and in return, it won an exemption from tariffs for three years as long as it invests in U.S. manufacturing. (Trump had announced a plan to tax pharma imports at 100% unless a pharma company builds a manufacturing site in the U.S.)

Pfizer's decision is positive because it removes two big uncertainties, and the deal hasn't prompted Pfizer to lower earnings expectations — so it clearly isn't a major financial hardship for the company. It's important to keep in mind that Pfizer agreed to drop prices on most of its primary care drugs that can be sold direct to consumer, but prices of top-selling drugs and its blockbusters in specialty areas such as oncology aren't set to change.

All of this offers investors visibility on what's to come and means we don't have to worry about tariffs suddenly and unexpectedly hurting Pfizer's earnings. If Pfizer hadn't made such a deal, tariffs might have been a major concern since the company has manufacturing sites beyond U.S. borders.

Today, you can get in on this pharma giant — one with a broad range of products that have delivered growth over time — for only 8 times forward earnings estimates. That makes Pfizer a steal, especially for a stock that may offer you peace of mind during turbulent times.

Image source: Vertex Pharmaceuticals.

2. Vertex Pharmaceuticals

Vertex Pharmaceuticals (VRTX -0.06%) is the world's leading maker of treatments for cystic fibrosis (CF), and this has helped the biotech generate billions of dollars in revenue and profit in recent years. Its leadership is solid thanks to strong patents and ongoing innovation, offering investors reason to be confident about more growth ahead.

In addition to this, Vertex recently proved that it can innovate beyond this specialty area as it won approval for a blood disorders treatment as well as a pain management drug. These products should add to growth in the coming years, and the entire Vertex product portfolio and pipeline represent a good reason to buy the stock and hold on.

But one more element may convince the cautious investor to press the “buy” button on this stock. And that's the idea that Vertex isn't highly exposed to import tariffs. The company spoke about this in an earnings call earlier this year, saying the “vast majority” of its CF product manufacturing is in the U.S. The company also says it has a balanced supply chain and low exposure to China, a country that's been heavily targeted by tariffs.

All of this means that, trading at 22 times forward earnings estimates, down from more than 27 times earlier this year, Vertex makes a fantastic tariff safe haven to buy on the dip.