3 Standout Stocks to Buy as Worse-Than-Expected CPI Numbers Revive Inflation Fears
The U.S. government has just released the August inflation report, with numbers revealing that CPI has continued to rise at a pace far more quickly than the 2% rate the Fed considers healthy for the economy.
The consumer price index rose by 0.6% on the month, after edging up 0.2% in July. The headline annual inflation rate rose above market expectations, at 3.7%, marking a significant acceleration from the 3.2% annual pace in the previous month.
To help you successfully navigate through the uncertain macro backdrop, I used the InvestingPro screener to identify some of the best stocks that tend to deliver strong returns during times of high inflation, like now.
My focus was on diversified companies that are defensive in nature and demonstrate solid profitability, a healthy balance sheet, strong growth prospects, and resilient dividend payouts thanks to their market-leading position.
To kick off my process, I first searched for stocks that hail from defensive sectors of the market, such as consumer staples, energy, utilities, and healthcare, as their products and services are essential to people’s everyday lives.
I then filtered for stocks with a dividend yield above 2.5%.
Finally, I scanned for names that have an InvestingPro Profit Health Label of either ‘Excellent’ or ‘Great.’ The grade is based on the strength of the company’s projected earnings growth and cash flow trends.
My watchlist consists of companies with a market cap of over $10 billion, an average daily trading volume of at least one million shares, and a stock price of $10 or higher.
Only 26 stocks on U.S. exchanges met the criteria above. Of those, here are three standout companies to own as inflation fears return.
For the full list of stocks that made my
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