The ‘Oil Shocks and Tariff Fears’ Investing Thesis: Why Ultra-High-Yield Stocks Are Outperforming Everything

A certain type of investor doesn’t really care what the Nasdaq did yesterday when they enter a brokerage office or, more likely, open an app while riding the train. The check is what they want. They want it fat, predictable, and on a monthly or quarterly basis.

That investor was viewed as a relic for the majority of the past ten years—someone who didn’t quite get it and hadn’t progressed to growth, artificial intelligence, or whatever the next big thing was. That investor is quietly making money in 2026.

The explanation is almost embarrassingly straightforward. Half of the S&P 500’s cost structure was altered by President Trump’s so-called Liberation Day tariffs, which were implemented in a single afternoon last spring. The conflict with Iran caused the price of crude to spike this year in a manner not seen since the early 2020s. However, until you apply pressure, the wider market simply absorbed it in the same way that a sponge absorbs a spill. It appears that investors think the worst is over. Whether they are correct is still up for debate.

You can sense the reluctance if you read the transcript of any quarterly earnings call. CFOs avoid discussing the tariff line. They bring up “supply chain optionality” in the same way that an anxious host brings up the weather. In the meantime, three businesses that no one includes on a “future of investing” panel—a phone carrier, a pipeline operator, and a massive tobacco company—have continued to operate as they always have. distributing checks.

The obvious one is Altria Group. A 6.5% forward yield, fifty-plus years of dividend increases, and a customer base that doesn’t quit when gasoline gets expensive. The corporate equivalent of a midlife rebrand, the company’s tagline now refers to “moving beyond smoking,” but the cash machine underneath is the same as it has been for decades. The supply chain is located inside U.S. borders, so tariffs hardly scratch the surface. Observing Altria’s chart this year gives the impression that the market has finally realized why investors once held this stock.

The more intriguing example is Enterprise Products Partners. The nation is traversed by more than 50,000 miles of pipelines that transport crude, natural gas liquids, and the unglamorous middle of the energy industry. As a tollbooth, the company doesn’t really care how much oil costs; it charges the same amount whether the barrel is $70 or $110. However, the shock to Iran forced buyers around the world to purchase American barrels, which pass through Enterprise’s pipes. It has built-in escalation clauses in about 90% of its long-term contracts. This is the kind of information you would ignore in an annual report until inflation becomes the most significant sentence.

And there’s Verizon. For the past ten years, it has been boring, derided, and dismissed as a value trap about once every quarter. Nevertheless, Verizon’s stock rose in the weeks after the Iranian conflict while the market as a whole faltered. Nineteen years in a row of increases, a 6.3% yield, and a business model that seems suspiciously unaffected by events in the Strait of Hormuz. People don’t turn off their phones. The bill is paid by them.

Here, it’s difficult to ignore the pattern. These businesses are all uninteresting. They won’t all become trillionaires. However, the dull stocks begin to appear almost radical when the macro becomes ugly—really ugly, not the cable-news kind. There’s a sense that this won’t last forever, that as soon as the headlines settle down, capital will be pulled back by some new hot trade. Perhaps. However, the dividends continue to come in for the time being.