Inflation isn’t cooling off at all.
In fact, it may only get worse from here.
According to Barron’s, “Already-high food and energy prices are jumping as the war in Ukraine rages on, threatening world food and energy supply given the amount of fertilizer, oil, and crops that come from the region. Food and energy are taking increasingly more of business and household income, in turn souring sentiment and lifting inflation expectations.”
Making matters worse, the Russia-Ukraine war shows no signs of cooling either, which could prop up inflation even more.
So, how do we protect our portfolios from all the chaos?
One way to weather the storm is with dividend stocks, especially since “they usually grow faster than inflation. Based on an average of all rolling 12-month periods since 1940, DPS [dividends per share] growth has outpaced inflation by 2.4 percentage points per year.”
Some high yielding stocks to take a look at include;
- Altria Group (MO) – which carries a yield of 6.59%
- EPR Properties (EPR) – which carries a yield of 6.14%
- NextEra Energy (NEE) – which carries a yield of 2.08%
- Oneok (OKE) – which carries a yield of 5.16%
- WP Carey (WPC) – which carries a yield of 5.05%
- The Dow is up 24 points to 34,337
- The S&P 500 is up about 2.25 points to 4,389
- The NASDAQ is up 12 points to 13,920.50
- Gold prices are up $2.22 to $1,979.72
- Bitcoin is up just over 4.3% to $40,733.43
- Oil prices are down $1.56 to $106.70
- The VIX is down slightly to 22.54
With interest rate hikes on the way, keep an eye on bank stocks, such as Bank of America.
Analysts are bullish on Bank of America because it’s one of the most sensitive to interest rate hikes. According to Barron’s, “With it widely expected that the Fed will raise interest rates at least three times this year, Bank of America would be poised to benefit more than peers.”
Insider Buying – Blackrock Inc. (BLK)
After plummeting from $925, BLK director William Ford bought 1,000 shares at $701 apiece for $701,000 on April 14. On April 18, he bought another 2,000 shares for $1.36 million, at a price of $681.44 a share. However, be cautious following the insider. Other firms, such as Citi, BMO Capital, and Deutsche Bank lowered their price targets on BLK.
Also, while BLK did post adjusted Q1 EPS for $9.52, which beat expectations for $8.84, revenue came in at $4.7 billion, as compared to expectations for $4.73 billion.