Inflation: Top Stocks to Buy for a Stable Portfolio


Inflation slowly erodes the purchasing value of your currency. The greatest method to beat inflation is to grow your money faster than inflation. We’ve picked some of the greatest stocks with strong performance regardless of economic conditions to assist you in completing this objective.

Consumers cut back on discretionary spending during periods of rising inflation, such as presently. However, there are certain basics that are considerably more difficult for consumers to stop purchasing. One of the best strategies to avoid inflation is to invest in firms that manufacture essential goods and services.

Our list of the top inflation stocks includes ten companies that provide goods and services that Americans cannot live without. These stocks have attractive valuations that should hold up well in the face of rising prices. They also produce consistent dividends and provide consistent price appreciation over time.

Eli Lilly and Co (LLY)


Dividend Yield: 1.2%

Eli Lilly is one of the major pharmaceutical businesses in the United States, with a diverse product range. Morningstar has given LLY a “A” financial rating, and it has generated the highest 10-year annualized return on our list. If this level is maintained, the company’s returns should continue to surpass inflation.

Since 2018, Lilly has boosted its dividend payout every year. In 2023, sales and earnings are predicted to expand by 5.2% and 14.9%, respectively.

Despite the company’s good expected future profits growth and strong historical price performance, Lilly has the highest forward price-to-earnings ratio (P/E ratio) on our list, at 48. In the last five years, P/E has never been less than 21. This stock is rarely “cheap,” and quality frequently necessitates a premium P/E.

The stock is in an uptrend over the long term, with most pullbacks increasing after a 10% to 20% decline. The greatest drop in the recent decade was little under 25%.

Hormel Foods Corp (HRL)

Dividend Yield: 2.2%

Hormel Foods is a consumer staples behemoth that offers a diverse array of packaged meat products. The corporation dominates the shelf-stable meats, ready meals, pepperoni, deli meats, and guacamole markets.

HRL has a decent dividend yield and has continuously increased distributions for more than a decade. Morningstar gives it a “A” financial rating.

Analysts predict that the company’s revenue and earnings per share (EPS) will increase by 3.2% and 9%, respectively, in 2023. The stock currently has a forward P/E ratio that is greater than 25. HRL’s lowest P/E ratio during the last five years has been 18.4. This means that the stock is now appropriately priced.

Hormel is in an uptrend over the long run, with most pullbacks finishing 10% to 25% lower and then rebounding upward. The greatest drop in the last decade was 30%.

AstraZeneca PLC (AZN)

Dividend Yield: 2.2%

AstraZeneca is a renowned multinational pharmaceutical business headquartered in the United Kingdom. The United States contributes for almost one-third of its annual sales.

AstraZeneca has maintained consistent dividend payments over the last decade and is rated “B” by Morningstar.

Analysts predict that AZN’s sales and earnings per share will rise by 3.9% and 15%, respectively, during the next year. This is the highest EPS growth forecast on this list.

AZN is attractively valued, with a forward P/E of 18, and it also has the highest five-year ahead EPS growth rate on our list.

AZN is now on a long-term upward trend. However, it has previously had periods of sideways trading. The highest drop in the last decade is close to 30. After a 10% to 20% dip, the majority of its pullbacks finish and reversal higher.

Amgen Inc (AMGN)

Dividend Yield: 3.3%

Amgen is a biotechnology business that develops and sells medications to treat a variety of ailments.

The company has the highest dividend yield on the list and has grown its annual dividend payment on a consistent basis over the last decade. Morningstar gives it a “A” financial rating.

Analysts anticipate that AMGN’s sales and earnings per share will increase by 3.8% and 8.6%, respectively, in 2023. AMGN’s five-year annualized EPS growth prediction is 6.8% each year. The company’s forward P/E ratio is about 19, indicating that it is a reasonably priced stock.

AMGN’s stock price has been range bound since 2020 and is currently trading slightly below its 52-week high. Over the last ten years, the biggest drop was 25%, with occasional 10% to 20% pullbacks from recent highs giving favorable entry points.

Church & Dwight Co Inc (CHD)

Dividend Yield: 1.4%

Church & Dwight makes and sells household and personal hygiene items such as kitty litter and deodorant. The company is most recognized for its Arm & Hammer trademark, although it also manufactures a wide range of well-known products.

The company has a reasonable dividend yield and has grown the distribution every year for more than a decade. Morningstar gives it a “A” financial rating.

Analysts anticipate 3.3% and 7.6% increases in sales and earnings per share in 2023, respectively. Over the following five years, growth should slow to 5.3% each year.

The forward P/E of CHD is roughly 24. The company’s P/E ratio has fluctuated from 16 to 37 over the last five years, making today an average moment to buy the stock in terms of valuation.

The stock’s long-term trend is upward, with a 25% drop over the last decade (based on daily closes). Most pullbacks in this stock, like the others on the list, are between 10% and 20% before the uptrend resumes. The stock is down 17% from its 52-week high.


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