So far, April has been a roller coaster ride for investors, with the benchmark S&P 500 index down by around 9% year to date based on uncertainty surrounding the Trump administration's trade policy.
In times like these, it's a good idea to pivot to safe, recession-resistant stocks that aren't very vulnerable to weakening macroeconomic conditions. Let's explore why Phillip Morris International (NYSE: PM) and Alpine Income Property Trust (NYSE: PINE) could be long-term winners.
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Because nicotine is habit-forming, demand for cigarettes and other tobacco products typically remains strong no matter what is happening in the economy. However, the industry's strength comes at the expense of health risks, which have attracted harsh regulations. Philip Morris International has tackled this challenge through geographic diversification and a pivot to safer, reduced-risk tobacco products.
Unlike its former partner Altria Group (the two companies split in 2008), Philip Morris generally avoids the U.S. market in favor of globalized revenue streams across Europe, Asia, and Latin America.
The company has also pivoted away from traditional cigarettes to reduced-risk products like Iqos, which release nicotine through heating instead of burning to reduce the release of harmful chemicals while maintaining a desirable flavor profile.
Philip Morris is also a major player in the oral tobacco market with its Zyn nicotine pouches, which are so popular that they even experienced U.S. shortages in 2024.
Philip Morris is a mature company, so investors shouldn't expect breakneck top-line growth. However, its resilient business model allows it to offer the promise of consistent profits, which are returned to investors via a dividend that has increased every year since 2008.
If you love dividends, you will love Alpine Income. As a real estate investment trust (REIT), the company is allowed to avoid taxation if it returns the majority of its profits to shareholders. And its small size makes it a great alternative to more prominent players in the industry.
REITs were founded in the 1960s, and since then, many have grown into megacap behemoths. However, the larger a REIT becomes, the more property it must acquire to drive growth, potentially compromising the quality of its acquisitions.
Image source: Getty Images.
With a market cap of around $246 million, Alpine Income is poised for substantial long-term growth as it scales up its business model. And it can pick and choose the best deals.
Top clients include major brick-and-mortar retailers like Lowe's and Dick's Sporting Goods. The company's 134 properties are diversified across the U.S., with a 98% occupancy rate and an average lease of 8.7 years, making them a source of reliable long-term income.
With a dividend yield of 7.4%, Alpine Income towers above other net lease REITs like Realty Income and W.P. Carey (offering 5.8% and 6.2%, respectively). The stock looks like a long-term winner.
Financial markets hate uncertainty because it makes it harder to plan investments for the future. And the Trump administration's unpredictable and extreme trade policy will likely increase market volatility over the next few months or even years. The rising probability of a U.S. recession in 2025 further complicates the economic situation.
The good news is that chaos can create opportunities. Investors should use market weakness as an opportunity to buy quality stocks for a discount. Philip Morris International and Alpine Income Property Trust could make good buys because of their defensive business models and big dividends.
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Will Ebiefung has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Lowe's Companies and Philip Morris International. The Motley Fool has a disclosure policy.