Top 5 Dividend Stocks to Buy as Inflation Protection

Dividend Stocks: The U.S. consumer price index rose 8.3 percent year on year in April, and inflation is nearing a 40-year high.

Distribution chain disruptions and growing economic restart demand have pushed up prices, putting pressure on US budgets and sending costs to some economic sectors.

Inflation will completely rule out fixed-income, but dividend stocks in anti-inflation sectors such as energy, consumer goods, real estate, and commodities are the best way to offset the negative impact of inflation on investors.

According to CFRA analysts, there are nine dividend stocks to buy with a yield of at least 2% to help investors fight inflation.

Top 5 Dividend Stocks to Buy as Inflation Protection

Dividend Stocks to Buy as Inflation Protection

Here Are Top 5 Dividend Stocks to Buy as Inflation Protection:

Exxon Mobil Corp. (Ticker: XOM)

Dividend Stocks: Exxon Mobil is the largest oil and gas company in the United States.

Energy stocks performed historically well during periods of high inflation, as prices of oil, gas, coal, and refined petroleum all rose, pushing up the profit margins of the energy sector.

Exxon shares have risen 52.1% so far this year in terms of total earnings, including dividends, and analyst Stewart Glickman is even higher.

According to Glickman, Africa and the U.S. Improving oil and gas properties in the sea area of ​​the Permian Basin will enable Exxon to continue its booming pace shortly.

CFRA has a “buy” rating for the XOM stock and a $ 102 price target, closing on May 19 at $ 91.14.

Dividend yield: 3.9%

Procter & Gamble Co. (PG)

Dividend Stocks: Procter & Gamble manufactures home appliances and owns several popular brands including Bomber, Tide, and Gillette. Consumer Staples stocks performed relatively well when inflation was high, as shoppers would recoup their preferred expenses before cutting back on purchases such as diapers or laundry detergent.

According to analyst Arun Sundaram, Procter had the best sales chain before the epidemic in 2020 and had positive sales and margin momentum. Sundaram says that despite the inflationary pressures, Procter’s market share gains are sticking. CFRA has a “buy” rating and a $ 180 price target for PG stock, up from $ 141.70 on May 19.

Dividend dividend: 2.5%

Coca-Cola Co. (KO)

Dividend Stocks: Coca-Cola is the largest non-alcoholic beverage company in the world, and it is the type of consumer staples stock that holds relatively well when inflation rises.

The total return on Coca-Cola shares was 2.1% until May 19, 2022, while key indices fell by double digits. Analyst Gareth Nelson says the settlement of the pending $ 12 billion tax case could be a good boost for Coca-Cola, and he predicts the company will see 11% revenue growth this year.

According to Nelson, price improvements and a resurgence in on-premises sales will continue Coca-Cola’s strong base momentum in the coming quarters. CFRA has a “buy” rating and a $ 72 price target for KO stock, up from $ 60 on May 19.

Dividend yield: 2.9%

PepsiCo Inc. (PEP)

Dividend Stocks: PepsiCo is the mother of Frito-Lay, another leading global beverage company and snack subsidiary.

Like Coca-Cola, PepsiCo stocks beat S&P in 2022, falling just 6.6% in terms of total earnings as of May 19, compared to the 18.2% drop in the benchmark index.

According to Nelson, PepsiCo has a defensive, blue-chip investment, strong balance sheet, and stable and predictable returns. According to Nelson, the beverage market should improve by 2022.

In the long run, he says, international expansion and Frito-Le Snacks will be the driving force behind PepsiCo’s two primary sales growth, with healthy snacks and beverages distinguishing its portfolio.

CFRA has a “buy” rating for the PEP stock and a $ 200 price target, closing on May 19 at $ 161.20.

Dividend yield: 2.8%

Philip Morris International Inc. (PM)

Dividend Stocks: Philip Morris is the largest tobacco company to be traded in public.

Many tobacco users are well aware of how difficult it can be to quit smoking or other nicotine products, even if they want to, so Philip Morris customers will not be intimidated by rising prices.

According to Nelson, Philip Morris shares are attractive in value and offer investors a compelling return opportunity.

Global cigarette levels may be in a secular slump, Nelson said, adding that pricing and further penetration into emerging markets will help support Philip Morris’ earnings in the years to come.

CFRA has a “buy” rating for the PM stock and a $ 120 price target of $ 100.50 on May 19.

Dividend yield: 4.7%

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