Prices across the globe continue to rise at an extraordinary rate. As a share investor I feel I need to find some inflation-resistant stocks to help protect my wealth in these difficult times.
Latest UK consumer price inflation (CPI) data shows prices rose at fresh 40-year highs of 9.1% in May. The Bank of England (BoE) thinks things will get even worse and that CPI will hit 11% later this year.
I’m preparing for inflationary pressures to remain prolonged and higher than forecast too. Last week’s upgrade was one of several that the BoE has announced in recent months. Its ability to fight rampaging prices by hiking interest rates could be limited by the rapidly-cooling economy too.
2 FTSE 100 stocks for the inflation crisis
With this in mind here are two inflation-resistant stocks I’d buy today.
Fast-moving consumer goods producer Unilever (LSE: ULVR) has seen its share price struggle in recent times. Investors have bowed out as concerns over its growth strategy have emerged.
It’s my belief though that the FTSE 100 firm could fare better than many other UK shares in the short-to-medium term. I like the excellent brand power that its products like Dove soap and Magnum ice creams carry. History shows that shoppers are prepared to pay that little bit extra for such products, even when inflation batters their spending power.
Strong consumer loyalty also enables Unilever to pass its increased costs onto shoppers without witnessing a slump in volumes. Finally, I also like Unilever because people can’t cut spending on food and household products as readily as they can on discretionary goods.
As a patient investor, I’m happy to hold onto my Unilever shares. Some in the broader market might be worrying about the firm’s decision not to make major earnings-boosting acquisitions in the near future. But I’m confident the business can continue growing profits at a healthy rate through successful product innovation and by making smaller acquisitions.
Advertising revenues at broadcaster ITV (LSE: ITV) could suffer badly as the global economy cools. However, I still believe it has qualities that could help me as an investor navigate these difficult times.
Firstly, ITV offers one of the biggest dividend yields on the FTSE 100. Its reading of 7.6% smashes the index’s broader average of 4%. And it helps take the sting out of near-double-digit inflation on my near-term returns.
Secondly, most of the broadcaster’s programming is free to watch. So as people cut back on their pricey Netflix and Amazon Prime subscriptions during this cost-of-living crisis viewer numbers at ITV could receive a significant boost.
As a long-term investor I’m excited by the huge sums ITV is investing in its streaming platform. Viewing figures for its ITV Hub service have been hugely impressive in recent years. I also like the steps it’s taking to expand its programme production arm. This is a share I’d buy today and aim to hold for years.