The Five Best Stocks to Fight Inflation

Inflation is back and it has sharp teeth. Whether you have just started investing or have been saving all your life for retirement, inflation can and will impact your real rate of return. The real rate of return is the percentage earned adjusted for inflation. It is your purchasing power. It is what counts.

In your battle against inflation, you have two heavy weight opponents. The Federal Government with-it ever-increasing deficit spending, and the Federal Reserve, whose easy money policies continues despite clear evidence that inflation is back.

One way to protect your assets against inflation is to invest in companies that have pricing power. Pricing power is where a company can increase it prices to offset the ever-increasing cost of labor and raw materials.

Let us look at five companies that can help protect your investments.

Johnson & Johnson

J&J is a triple threat. It has well known consumer products such as Band-Aids, Listerine, and Tylenol to name just a few. It is also a major player in Pharmaceutical, and Medical Devices.

It currently pays an annual dividend of $4.24 (2.46%) and has been increasing that dividend at a growth rate over 5% for the past five years. With strong earnings and a strong balance sheet this company is worth a look.

Proctor & Gamble Co

Gamble may be in the name, but with some of the best-known brands, you can have confidence that this company will continue to generate sales. Look around you home and you will most likely come across some of its products, Crest, Safeguard, Old Spice, Downy, Tide, Charmin, Puffs, and many more. They not only sell these products in the United States but around the world.

It currently pays an annual dividend of $3.47 (2.45%) and has been increasing that dividend at a growth rate over 5% for the past five years. With over 18 billion in quarterly sales and 10 billion cash on hand, this is likely to be a favorite for years to come.

PepsiCo Inc

This is one refreshing stock. On a hot day you can reach for a nice cold Pepsi or Diet Pepsi, and don’t forget some chips. With brands like Cheetos, Doritos, Fritos, Cap’n Crunch, or my personal favorite Quaker Oats, just to name a few, there is something for everyone.

It currently pays an annual dividend of $4.30 (2.75%) and has been increasing that dividend at a growth rate over 7% for the past five years.

CVS Health Corp

This one is sure to keep your portfolio in good health. Maybe you just like the convenience of their stores, or you use them to manage your prescriptions, CVS offers a lot of value, both as a stock and a member of your community.

It currently pays an annual dividend of $2.00 (2.43%) and has been increasing that dividend at a growth rate over 3% for the past five years. With around 12 billion in free cash flow, its worth a trip to your local CVS.

Huntington Ingalls Industries Inc

HII is in the business of keeping US (pun intended) safe. They design, build, overhaul, and repair ships for the U.S. Navy and Coast Guard.

It currently pays an annual dividend of $4.56 (2.24%) and has been increasing that dividend at a growth rate over 17% for the past five years. If you want a strong defense against inflation, consider this company.

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These are five great America companies. They have strong sales and pricing power. They pay a dividend and have shown a pattern of increasing it on a regular basis.

Of course, I must give you a disclaimer, all stocks have risk, review each company carefully before investing (but you already knew that).

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