Best Stocks to Hedge Inflation
Inflation erodes cash but companies with pricing power pass costs through to customers and protect margins. XOM and CVX benefit directly from higher energy prices. COST and WMT are too important to consumers to absorb margin compression — they pass it on. KO has raised prices through every inflationary period of the last century.
Selection Criteria
- →Demonstrated pricing power — ability to raise prices without losing customers
- →Real asset or commodity exposure that benefits from inflation
- →Low labor intensity reducing exposure to wage inflation
- →Pricing in local currency in international markets (natural FX hedge)
The Stocks
Inflation hedging is imperfect. No single stock fully protects against all inflationary scenarios. This is not financial advice.
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