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3 Top Stocks to Gain as Inflation is Still Running Hot
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Price pressures within the U.S. economy continue to remain stubbornly high lately. Thanks to a rise in the price of food and housing, inflation scaled northward more than anticipated in September.
Per the Labor Department, the consumer price index (CPI) increased 0.4% month over month in September. The CPI jumped 3.7% for the same period last year, matching August’s reading.
Core CPI, which tends to eliminate the volatile food and energy prices advanced 0.3% month over month and climbed 4.1% on a yearly basis in September.
Nonetheless, the rise in consumer prices indicates that the Federal Reserve's aggressive monetary policies are yet to tame price pressures that are now becoming huge burdens for most U.S. households. This relentless rise in inflation had already impacted several worker’s paychecks in September.
A spike in oil prices primarily due to the Middle East tensions increased energy costs. But it’s the increase in housing costs that predominantly drove the broader inflation higher last month.
The cost of rent increased by 0.6% month over month and 7.2% on an annual basis. Food prices also went up for the third consecutive month, with grocery costs increasing 0.1% month over month and 2.4% from last year.
Consumer price pressures, thus, may have declined immensely from the peak of 9.1% but continue to hover well above the central bank’s desired target of 2%.
At the same time, wholesale inflation also remains quite high. The producer price index (PPI) rose 0.5% month over month in September and is up 2.2% compared to last year. The headline PPI has now registered its highest annual rate since April. The so-called core PPI also edged up monthly and yearly in September.
Of course, the rise in inflation impacts the purchasing power of your dollars. This leads to a decline in consumer spending, derails economic growth, and spurs volatility in the stock market. However, investors should invest in companies that remain unfazed by price pressures.
Primary among them are stocks that belong to the consumer staples sector. Unlike discretionary items, staple products are cyclical, or in other words, whose demand remains constant irrespective of market conditions.
Similarly, real estate prices gain in times of inflationary pressure. Landlords also charge more rent, resulting in higher rental income. Real estate can be easily purchased through investments in real estate investment trusts (REIT).
PepsiCo (PEP - Free Report) is one of the leading global food and beverage companies.
The Zacks Consensus Estimate for PEP’s current-year earnings has moved up 0.7% over the past 60 days. PEP’s expected earnings growth rate for the next five-year period is 8.3%. Its shares have already gained 5.3% over the past five years.
Lifeway Foods (LWAY - Free Report) produces Kefir, a drinkable product similar to, but distinct from yogurt.
The Zacks Consensus Estimate for LWAY’s current-year earnings has moved up 76.5% over the past 60 days. LWAY’s expected earnings growth rate for the next year is 28.3%. Its shares have already gained 74.7% over the past five years.
NexPoint Residential Trust (NXRT - Free Report) is engaged in acquiring, owning, operating, and selectively developing multifamily properties. It operates primarily in the Southeastern United States and Texas.
The Zacks Consensus Estimate for NXRT’s current-year earnings has moved up 0.3% over the past 60 days. NXRT’s expected earnings growth rate for the next five-year period is 8%. Its shares have already gained 18.1% over the past five years.
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3 Top Stocks to Gain as Inflation is Still Running Hot
Price pressures within the U.S. economy continue to remain stubbornly high lately. Thanks to a rise in the price of food and housing, inflation scaled northward more than anticipated in September.
Per the Labor Department, the consumer price index (CPI) increased 0.4% month over month in September. The CPI jumped 3.7% for the same period last year, matching August’s reading.
Core CPI, which tends to eliminate the volatile food and energy prices advanced 0.3% month over month and climbed 4.1% on a yearly basis in September.
Nonetheless, the rise in consumer prices indicates that the Federal Reserve's aggressive monetary policies are yet to tame price pressures that are now becoming huge burdens for most U.S. households. This relentless rise in inflation had already impacted several worker’s paychecks in September.
A spike in oil prices primarily due to the Middle East tensions increased energy costs. But it’s the increase in housing costs that predominantly drove the broader inflation higher last month.
The cost of rent increased by 0.6% month over month and 7.2% on an annual basis. Food prices also went up for the third consecutive month, with grocery costs increasing 0.1% month over month and 2.4% from last year.
Consumer price pressures, thus, may have declined immensely from the peak of 9.1% but continue to hover well above the central bank’s desired target of 2%.
At the same time, wholesale inflation also remains quite high. The producer price index (PPI) rose 0.5% month over month in September and is up 2.2% compared to last year. The headline PPI has now registered its highest annual rate since April. The so-called core PPI also edged up monthly and yearly in September.
Of course, the rise in inflation impacts the purchasing power of your dollars. This leads to a decline in consumer spending, derails economic growth, and spurs volatility in the stock market. However, investors should invest in companies that remain unfazed by price pressures.
Primary among them are stocks that belong to the consumer staples sector. Unlike discretionary items, staple products are cyclical, or in other words, whose demand remains constant irrespective of market conditions.
Similarly, real estate prices gain in times of inflationary pressure. Landlords also charge more rent, resulting in higher rental income. Real estate can be easily purchased through investments in real estate investment trusts (REIT).
Hence, amid such inflationary pressure, one should consider investing in the following three stocks that carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
PepsiCo (PEP - Free Report) is one of the leading global food and beverage companies.
The Zacks Consensus Estimate for PEP’s current-year earnings has moved up 0.7% over the past 60 days. PEP’s expected earnings growth rate for the next five-year period is 8.3%. Its shares have already gained 5.3% over the past five years.
Lifeway Foods (LWAY - Free Report) produces Kefir, a drinkable product similar to, but distinct from yogurt.
The Zacks Consensus Estimate for LWAY’s current-year earnings has moved up 76.5% over the past 60 days. LWAY’s expected earnings growth rate for the next year is 28.3%. Its shares have already gained 74.7% over the past five years.
NexPoint Residential Trust (NXRT - Free Report) is engaged in acquiring, owning, operating, and selectively developing multifamily properties. It operates primarily in the Southeastern United States and Texas.
The Zacks Consensus Estimate for NXRT’s current-year earnings has moved up 0.3% over the past 60 days. NXRT’s expected earnings growth rate for the next five-year period is 8%. Its shares have already gained 18.1% over the past five years.