Canada’s inflation rate rose to 7.7% in the month of May. That came close to a 40-year high. Statistics Canada revealed that gas prices surged 48% in the year-over-year period. Meanwhile, grocery bills increased by 9.7% over the same stretch. This has put major pressure on Canadian consumers. Young investors have not faced an environment like this. Today, I want to look at three Canadian stocks that they can trust in this climate.
Grocery retailers are a great target for young investors in this climate
Empire Company (TSX: EMP.A) is a Stellarton-based company that is engaged in the food retail and related real estate businesses in Canada. Young investors can depend on grocery retailers, as inflation has ballooned their profits. Shares of this Canadian stock have climbed 3.5% in 2022 as of mid-morning trading on June 28. That has represented most of its gains in the year-over-year period.
The company released its fourth-quarter fiscal 2022 results on June 22. It delivered earnings per share (EPS) of $0.68 — up from $0.64 in the previous year. Meanwhile, gross profit rose to $7.65 billion for the full year compared to $7.19 billion in fiscal 2021. Moreover, EBITDA rose by $187 million year over year to $2.33 billion.
Shares of this Canadian stock currently possess a favourable price-to-earnings (P/E) ratio of 14. That puts Empire in favourable value territory at the time of this writing. It offers a quarterly dividend of $0.165 per share, which represents a modest 1.6% yield.
Here’s another Canadian stock that will benefit from rising food prices
Maple Leaf (TSX: MFI) is another food-focused Canadian stock that young investors may want to target in this environment. This Mississauga-based company produces food products in North America and around the world. Shares of Maple Leaf have dropped 12% in 2022 at the time of this writing. The stock is down 2.2% in the year-over-year period.
In Q1 2022, Maple Leaf delivered total company sales of 7% to $1.12 billion. Meanwhile, Meat Protein Group sales increased 7.5% from the previous year to $1.08 billion. The Plant Protein Group posted sales growth of 5.2% to $44.9 million.
This Canadian stock is trading in favourable value territory compared to its industry peers. It last paid out a quarterly dividend of $0.20 per share. That represents a 3.1% yield.
One more TSX stock young investors should snatch up as inflation soars
Suncor Energy (TSX: SU)(NYSE: SU) is the third Canadian stock I’d suggest for young investors after inflation hit a near four-decade high in May. This Calgary-based company is one of the largest integrated energy producers in Canada. Its shares have climbed 42% in 2022, largely on the back of surging oil and gas prices.
Investors got to see its first-quarter 2022 earnings on May 9. Adjusted operating earnings more than tripled in the year-over-year period to $2.75 billion, or $1.92 per common share. This Canadian stock currently possesses an attractive P/E ratio of 11. It recently hiked its quarterly dividend to $0.47 per share, representing a 3.9% yield.
