5.5%+ dividend yields! 2 inflation-resistant shares I’d buy

Inflation continues to rise at eye-popping rates across the globe. Here are two inflation-resistant UK shares I’d buy to protect my investment portfolio.

| More on:
Young brown woman delighted with what she sees on her screen

Image source: Getty Images

Buying gold, or gold mining stocks, is a popular play in times like these. I’m considering investing in metal digger Centamin (LSE: CEY) as inflation ravages the value of paper currencies and boosts the outlook for hard currency gold.

Bullion values haven’t soared so far due to fears of severe moves by central banks to tame inflation. Such unexpected action is a real risk which the move by Norway’s central bank this week perfectly illustrates. On Thursday, it hiked rates by the largest margin for 20 years, to 1.25%.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

I’m still thinking of tailoring my portfolio for a sudden rise in gold values. And I’d do this by snapping up Centamin.

I like the company’s ultra-low price-to-earnings (P/E) ratio of 10.1 times. I also think it’s a better choice than buying physical gold, or a financial instrument like a gold ETF. This way I can receive a dividend as well as potentially ride a soaring share price. Centamin’s dividend yield by the way sits at a large 5.9%.

Inflation and other issues

I’m not convinced by the effectiveness of central banks in fighting the current inflationary boom. Frantic rate rises haven’t, so far at least, stopped inflation gauges in major regions hitting new multi-decade highs each month.

The pressure on central banks to cool their aggressive actions might mount too as recessionary risks increase. Tepid action from the Bank of England last week (when it raised rates just 0.25%) illustrates the difficult decisions policymakers currently face.

Meanwhile, a worsening Covid-19 crisis has the potential to deepen supply chain problems and boost inflation further. So does a long war in Ukraine that might drive up key commodity prices.

I wouldn’t just buy Centamin to own for the short-to-medium term either. I think the business could prove an excellent long-term pick as it ramps up mining production. It remains on course to produce 430,000-460,000 ounces of gold in 2022 and is on the road to eventually dig out half a million ounces per year.

Another inflation-resistant share I’d buy!

Gold isn’t the only precious metal that could soar in this high-inflation environment. Platinum group metals (PGMs) might also rebound strongly again before too long. It’s why I’m considering adding Sylvania Platinum (LSE: SLP) to my portfolio as well.

Like Centamin, this platinum producer carries a rock-bottom valuation. It trades on a forward P/E ratio of just 3.9 times. In addition, its dividend yield stands at a solid 5.6%.

I’d buy Sylvania even as weak economic conditions threaten industrial demand for its product in the near term. And I’d look to hold its shares for the long haul too.

I think demand for pollution-battling metal platinum could soar as the fight to reduce car emissions increases. I also reckon off-take of its material could soar over the next decade, thanks to its critical role in hydrogen production.

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

How I’d apply the Warren Buffett method to buying shares

Learning from billionaire investor Warren Buffett, our writer explains his own approach to investing in shares for his portfolio.

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

This dividend share yields under 1% — but I’d still buy it

This dividend share has a low yield. So why would our writer consider adding it to his income portfolio?

Read more »

Young lady working from home office during coronavirus pandemic.
Investing Articles

Looking for a good share to buy? Here’s how I do it

Here are two approaches our writer uses when hunting for a good share to buy for his portfolio to aim…

Read more »

man in shirt using computer and smiling while working in the office
Investing Articles

One cheap FTSE 100 share I’d buy for a new bull market

This FTSE 100 share is unloved and starting to look seriously cheap, says Roland Head.

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

How I’d invest £500 in UK shares in 2022

Investing a small amount of capital in UK shares can result in high commission costs. Zaven Boyrazian explains how to…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

2 battered FTSE dividend stocks to buy in July!

I'm still searching the FTSE 100 for the best bargains to buy. I think these two big dividend shares are…

Read more »

Woman pulling baffled face
Investing Articles

Can I trust Lloyds’ 6.1% dividend yield?

The Lloyds' share price has sunk in 2022, causing the bank's dividend yield to leap. But can I really trust…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

3 top stocks to buy before the market rebounds

Edward Sheldon highlights three beaten-up stocks he'd buy before global stock markets stage a recovery from their 2022 declines.

Read more »