3 Inflation-Resistant Stocks to Add Today

Investors should target inflation-resistant stocks like Empire Company Ltd. (TSX:EMP.A) and others in this uncertain climate.

| More on:
Double exposure of a businessman and stairs - Business Success Concept

Image source: Getty Images

The Bank of Canada (BoC) stunned onlookers to kick off this week when it elected to hike the benchmark interest rate by a full percentage point. That brings the benchmark rate to a total of 2.5%. Policymakers are working feverishly to combat the inflation rate that is squeezing Canadian consumers. However, it remains to be seen whether these policy moves will have the desired impact in the near term.

Today, I want to look at three inflation-resistant stocks that are worth snatching up in this climate.

Grocery retailers are set to see more price increases in the weeks ahead

Canadian food prices were geared up for growth coming into 2022. However, the pace of inflation has outshot those initial projections. Unfortunately, consumers do not have any respite to look forward to. Canadian food suppliers have recently warned that further food price increases are on the horizon. That should spur investors to snatch up inflation-resistant grocery retail stocks like Empire Company (TSX:EMP.A).

This top grocery retailer owns and operates brands like IGA, Farm Boy, and Sobeys. Its shares have climbed 4.6% in 2022 as of early afternoon trading on July 14. The stock is up 1.3% from the prior year. Empire is still trading in favourable value territory with a price-to-earnings (P/E) ratio of 14. It offers a quarterly dividend of $0.165 per share, which represents a 1.6% yield.

Inflation is spurring a flight to Dollarama and its peers

It is no secret that price inflation has put significant pressure on the everyday consumer. Canadians have been forced to absorb hits on essentials like food and gas. Dollar stores rose in prominence beyond a niche offering after the Great Recession. There is evidence that they are again gaining traction in this inflationary climate. That should pique investor interest in Dollarama (TSX:DOL), Canada’s top dollar store chain.

Shares of this inflation-resistant stock have climbed 21% in 2022 at the time of this writing. The stock is up 34% from the prior year. It unveiled its first-quarter fiscal 2023 results on June 8. Dollarama posted sales growth of 12% to $1.07 billion. Meanwhile, comparable-store sales increased 7.3% from the previous year. Diluted earnings per share (EPS) jumped 32% from the prior year to $0.49.

One more inflation-resistant stock to target right now

Gas prices have been the most significant inflation driver in recent months. Oil and gas prices surged in the wake of Russia’s invasion of Ukraine. However, the sector has softened in response to recession fears.

Imperial Oil (TSX:IMO)(NYSE:IMO) is a Calgary-based company engaged in the exploration, production, and sale of crude oil and natural gas in Canada. Its shares have increased 12% so far in 2022. The stock is up 49% year over year.

In Q1 2022, Imperial Oil delivered its highest first-quarter net income in over three decades. It also posted its highest-ever first-quarter cash flow of $1.91 billion. This inflation-resistant stock still possesses an attractive P/E ratio of 11. It offers a quarterly dividend of $0.34 per share, which represents a 2.5% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

dividends grow over time
Dividend Stocks

2 Dividend Stocks That Can Generate $2,000 in Passive Income by 2025

Investing in high-dividend stocks such as Whitecap can help you generate $2,000 in annual passive income by 2025.

Read more »

tsx today
Stock Market

TSX Today: Why Canadian Stocks Could Fall on Thursday, May 30

Falling commodity prices, rising bond yields, and economic risks may continue to weigh on TSX stocks today as investors watch…

Read more »

Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance
Investing

2 No-Brainer Stocks to Buy With $5,000

These two stocks could be excellent buys amid this uncertain outlook.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Stocks for Beginners

5 Canadian Stocks to Hold in Your TFSA For Decades

The TFSA is the perfect place to compound wealth over decades. Don't pay any tax on these top five growth…

Read more »

edit Woman calculating figures next to a laptop
Dividend Stocks

Should You Invest in BCE Stock for its Dividend?

BCE stock is not yet out of the woods. But this article could change your perspective about the stock and…

Read more »

sale discount best price
Dividend Stocks

Bargain Hunting for Dividends: 3 High-Yield Stocks Haven’t Been This Cheap in Years

Enbridge (TSX:ENB) stock's key enterprise value multiple reached a new multi-year low recently. BCE remains a high-yield dividend play while…

Read more »

An airplane on a runway
Stocks for Beginners

Where Will Air Canada Stock Be in 3 Years?

Here’s why I wouldn’t be surprised if Air Canada (TSX:AC) stock more than doubles in value in the next few…

Read more »

Lady holding mobile phone and shopping bags
Tech Stocks

The Ultimate Growth Stock to Buy With $1,000 Right Now 

Here's why Shopify (TSX:SHOP) could be the ultimate growth stock long-term investors want to consider at this current point in…

Read more »