US stocks have been somewhat muted in recent sessions after the Bureau of Labour Statistics said inflation was up more than expected in January.
The consumer price index came in up 0.5% for the month and 3.0% for the year on February 12.
In comparison, economists had forecast a 0.3% and 2.9% increase, respectively.
That said, here are the top two inflation-resistant stocks to own this year if you’re not entirely convinced that the US Federal Reserve will succeed in bringing CPI down to its 2.0% target in 2025.
Procter & Gamble Co (NYSE: PG)
Procter & Gamble is a renowned name that’s known to be relatively resistant to inflation.
Why? Because it has a diversified portfolio of essential products like Tide, Gillette, and Pampers that consumers continue to buy regardless of the economic environment.
This enables P&G to pass on higher costs to consumers without significantly affecting demand.
Additionally, Procter & Gamble focuses on product superiority and innovation that translates to customer loyalty even in the face of higher prices.
Its diverse range of products also helps mitigate risks associated with inflation in any single market segment.
Last month, the New York-listed giant reported its financial results for the second quarter that topped Street estimates on early signs of improvement in Greater China. In the earnings release, Jon Moeller – the company’s chief executive told investors:
“We remain committed to our integrated growth strategy … [that] has enabled our solid results and is a foundation for balanced growth and value creation.”
Moreover, P&G shares currently pay a healthy dividend yield of 2.44% as well which makes them all the more attractive to own at writing.
Chevron Corp (NYSE: CVX)
Another great pick for investors in search of stocks that are relatively insulated from inflation is Chevron.
That’s because the price of oil and gas tends to increase during periods of inflation, which makes it easier for energy companies like Chevron to pass on the higher costs to customers and maintain its profit margins.
Plus, the energy demand typically remains relatively stable, even during economic downturns, as it’s essential for transportation, manufacturing, and heating.
Chevron is particularly attractive to own at writing as it announced plans to lower its global headcount by about 20% this week.
The move will see it let go over 9,000 workers and contribute meaningfully to the company’s broader plan of cutting costs by up to $3.0 billion by the end of 2026.
Note that Wall Street currently has a consensus “overweight” rating on CVX shares. Analysts see an upside in them to $176 on average which indicates potential for about a 12% gain from current levels.
A lucrative 4.37% dividend yield is among other reasons to own Chevron stock for 2025.
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