What investments do well during inflation
3 Inflation Resistant Dividend Stocks
Investing in inflation resistant dividend stocks is a great way to protect your investment portfolio from this rising price trend. While inflation may never subside completely, you can buy dividend stocks to provide you with some protection. In this article, we'll discuss 3 of the best inflation resistant dividend stocks to invest in. We will also discuss a few other investments that perform admirably well during periods of inflation.
Coca-cola performance during inflation
The Coca-Cola Company reported first-quarter earnings and sales that topped analysts' estimates, and increased sales 16% to $10.5 billion. Profits were up 24% to $2.8 billion, or 64 cents a share, thanks to price increases. Overall, the company raised its price/mix by 7%, including a 11% increase in North America. Analysts are confident that the company will keep up its momentum for the remainder of the year.
The company's performance during the inflation period may not be so impressive. Coca-Cola has been increasing its marketing spend over the past few years to entice consumers, but higher prices might cause a company to increase its marketing budget. Large companies can increase their spending, while smaller companies may need to lower theirs to maintain margins and competitive pricing. Moreover, Coca-Cola has been introducing more premium products and flavors and has discontinued Tab.
Keurig Dr Pepper
One of the best ways to protect your dividend from inflation is to invest in inflation resistant dividend stocks. These types of stocks are generally undervalued, yet still generate generous payouts. The beverage industry, which includes coffee, teas, and juices, is a good place to look. According to CFRA Research, soft drink stocks are especially attractive due to the rising interest rates. Inflation, which is currently at a forty-year high, will likely continue to push up prices.
Keurig Dr Pepper is a well-established beverage company based in Plano, Texas. The company has a diverse portfolio of brands, including coffee, tea, juices, and mixers. It is the leading provider of single-serve coffee brewing systems. The dividend yield is 102.5%, which is nearly four times higher than the industry average. As of March 31, 2017, the company had a dividend payout of $0.1875 per share. If you're looking for a dividend stock to invest in, Keurig Dr Pepper is a good choice. It pays a high yield and carries a low payout ratio.
Is Monster Beverage an inflation-resistant dividend stock? The answer is a resounding "yes." The common stock of Monster Beverage (MNST) traded at just 18 cents in 2001, and by the end of 2017, it was trading for $130. This return represents an incredible 72.122 percent growth over 15 years. However, I do caution investors against making such a move just yet. The following are three factors to consider when making your Monster beverage investment decision:
First, Monster Beverage has a stellar history. It is one of the best performing stocks since its 1992 IPO, with a return on equity greater than six-hundred percent. The company's growth has been exceptional, eclipsing that of peers PepsiCo by 200 percent and Coca-Cola by 40 percent. While the stock's recent drop may not be enough to reverse that trend, it still remains a high-margin winner.
Bonus stock performer during inflation.
If you're looking for an inflation resistant dividend stock to add to your portfolio, look no further than PepsiCo. The global food and beverage giant was founded in 1898 and oversees all aspects of its manufacturing, distribution, and marketing. PepsiCo owns 22 iconic brands and generates over $1 billion in sales. The company's products are recession resistant, and its sales only declined by 0.5% during the Great Recession. Free cash flow, which is a key factor for dividend growth, increased over that same period.
The company's recent earnings release shows it's still a good place to invest in. While it has suffered in the past, PepsiCo has demonstrated a resilient history of growth and profits. Its diverse product offerings and global operations make it an excellent choice for investors interested in long-term growth. Inflation will likely continue to affect the consumer price index, but PepsiCo's diversified operations will keep the company's earnings and cash flow up over the long run.
What is the best investment during inflation?
During inflation, it is generally wise to invest in assets that tend to appreciate in value as prices rise. These can include tangible assets such as real estate, precious metals like gold and silver, and commodities like oil and gas. Additionally, some stocks, such as those in the healthcare, technology, and energy sectors, can also perform well during inflation.
What stocks do well when inflation rises?
Some stocks that tend to perform well during inflation include those in the energy, materials, and financial sectors. Energy stocks may do well because energy prices tend to rise during inflation, while materials stocks may benefit from higher commodity prices. Financial stocks may also perform well, as interest rates tend to rise during inflation, which can be beneficial for banks and other financial institutions.
How do you profit from inflation?
One way to profit from inflation is to invest in assets that tend to appreciate in value as prices rise, such as real estate, precious metals, and commodities. Additionally, some stocks, particularly those in sectors like energy and materials, may perform well during inflation. Investors can also consider investing in inflation-protected securities, which are specifically designed to protect against inflation.
Who benefits from high inflation?
While high inflation can be detrimental to the economy as a whole, some individuals may benefit from it. For example, borrowers may benefit from high inflation, as the value of the money they borrowed will be worth less in the future when they have to pay it back. Additionally, some companies may benefit from high inflation, particularly those that produce goods or services that are in high demand during inflationary periods.
Where should I invest to avoid inflation?
Investors looking to avoid the negative effects of inflation may consider investing in assets that tend to hold their value during inflationary periods. This can include stocks in sectors like healthcare, technology, and consumer staples, as well as inflation-protected securities like TIPS (Treasury Inflation-Protected Securities). Additionally, investors may consider keeping some of their portfolio in cash or cash equivalents, such as short-term Treasury bills, to help protect against inflation.
Investing in inflation-resistant dividend stocks can protect an investment portfolio from the current trend of rising prices. Three dividend stocks that perform well during inflation are Coca-Cola, Keurig Dr Pepper, and Monster Beverage, and highlights their performance during inflation. Investing in assets that tend to appreciate in value during inflation, such as real estate, precious metals, commodities, and some stocks in sectors like energy, materials, and financials all perform well. Additionally, it mentions that inflation-protected securities like TIPS (Treasury Inflation-Protected Securities) can help protect against inflation.
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