If you’re trying to beat inflation, you should invest in some stocks. These stocks should keep you ahead of inflation over the next few years. Some of them are Costco, GXO Logistics, Eli Lilly and Company, and KLA-Tencor. However, you should also pay attention to current global conditions. For example, the Russian invasion in Ukraine has cut off the country’s grain production, so the price of grains will likely continue to rise.
As interest rates rise and inflation increases, the best stocks to buy to fight inflation are the ones that can withstand higher costs and still produce a steady cash flow. Here’s a list of 10 of these stocks. Each of these stocks has a strong competitive advantage and has a solid price appreciation history.
GXO Logistics (GXO) is a high-growth company with an aggressive growth profile. This type of company is capable of delivering high growth, even in an inflationary economy. This company provides logistics services to many of the world’s leading omnichannel retailers.
Rising inflation can damage the stock market, as it increases the cost of materials and labor and reduces retail sales volumes. Early in 2022, investors were worried about inflation expectations, as well as Russia’s invasion of Ukraine. With so much uncertainty around the world, many investors sold their stocks. The S&P 500 and Nasdaq both fell sharply in April 2022.
GXO Logistics is the world’s largest pure-play contract logistics company. It recently delivered a solid earnings report. Consumer prices are rising rapidly in the U.S. and Europe, and the stock market has had its worst first half in 50 years. Many retail giants, such as Walmart, are cutting their profit guidance as a result of the inflationary pressures. Yet, despite these risks, GXO has remained profitable and has expanded its margins.
The company continues to grow rapidly, and is taking advantage of the growth in e-commerce. This type of business generates higher product returns, and GXO is helping e-commerce companies reduce product returns. Many customers have trouble handling product returns, and GXO is able to handle these situations efficiently and effectively. As a result, it’s able to resell up to 96% of the products it receives from customers.
There are a number of companies that offer great inflation-fighting potential. These stocks have a low cost asset base, stable dividend, and low debt, making them good picks for stock portfolios. Moreover, these companies’ recent sales are indicative of their durability. In addition, KLA-Tencor is not on the list of top 10 best stocks for investors, released by Zacks Investment Research.
As of March 20, KLA-Tencor’s revenue is expected to grow by 9% to 11% a year through fiscal 2022. Furthermore, it intends to return 85% of its free cash flow to shareholders, generating a profit margin of 30%. These are some impressive numbers, and they have a low PEG ratio, which measures a stock’s earnings growth rate.
Conventional Wall Street wisdom has it that rising inflation is bad for growth and technology stocks. However, individual investors have continued to pour money into these buzzy stocks, driving their prices higher. These stocks are the most popular with individual investors, and they have enjoyed some of the best gains of this year. NVIDIA, for example, has returned over 35K%. This has made many investors rich.
Moreover, the rise in interest rates will increase business expenses and make it harder for less profitable companies to generate cash flow. This means that the best stocks to buy to fight inflation in 2022 will be those with strong pricing power and the ability to deal with the higher interest rates.