The stock market has been under considerable pressure in recent weeks. The advent of two more variants of the COVID-19-causing novel coronavirus has combined with rising inflation rates to impact stock markets significantly.
The pace of rising inflation is alarming now, and the market will begin feeling more pressure as time passes. It is necessary to reposition your self-directed portfolio to mitigate the impact of rising inflation on your investment returns. If you’re just starting investing, it might not seem like the best time to enter the stock market right now.
Most of the stock market tends to underperform during inflationary market periods. However, not every TSX stock is doomed to a fate of consistent declines during these conditions.
Today, I will discuss two stocks from different industries that could outperform the broader market during inflationary periods that you could add to your investment portfolio in December.
Tourmaline Oil (TSX:TOU) is a stock that is well positioned to benefit from rising inflation rates. Tourmaline Oil is a Calgary-based $13.30 billion market capitalization company that enjoys the reputation of being Canada’s top natural gas producer. The high energy prices work in favour of the Canadian company, allowing the company to see massive growth in its earnings this year.
Tourmaline Oil now enjoys a stronger balance sheet and has repaid a significant portion of its debt this year. Higher oil and gas prices next year could unlock even greater value for its investors. At writing, Tourmaline stock is trading for $40.34 per share, and it boasts a 1.78% dividend yield.
Gold has always been seen as a haven for investors against inflation. Rising inflation typically means that gold prices will rise, which benefits gold producers. B2Gold (TSX:BTO)(NYSE:BTG) is another stock that’s well positioned to post significant gains during inflationary markets.
The Vancouver-based $5.12 billion market capitalization gold mining company owns and operates three mining operations in Mali, the Philippines, and Namibia. The company’s goal is to produce a little over a million ounces of gold during 2022. The possibility of gold prices rising amid current conditions is high, and the company is prepared to benefit from larger profit margins.
At writing, B2Gold stock is trading for $4.85 per share, and it even offers payouts at a juicy 4.17% dividend yield.
Companies that can pass on the burden of higher costs on their customers are typically well positioned during rising inflationary markets. As the cost of everything goes up, the revenues for goods and services these companies provide go up. You might face the pressure of rising living costs due to higher inflation, but you can enjoy significant investment returns by investing in companies that benefit from this environment.
Tourmaline Oil stock and B2Gold stock are two such TSX stocks that you could consider adding to your portfolio for this purpose.