Millennials: 3 Dividend Stocks You Can Trust as Inflation Soars

Millennials are facing the highest inflation in their lifetime. That should spur them to buy dividend stocks like Hydro One Ltd. (TSX:H).

| More on:
Arrowings ascending on a chalkboard

Image source: Getty Images.

On July 20, Statistics Canada revealed that inflation rose to 8.1% in the month of June. That represented the fastest annual increase in the cost of living in 39 years. The Bank of Canada (BoC) moved forward with a higher-than-expected interest rate hike of 1% earlier this month. Despite its commitment to combating inflation, the BoC predicted that the inflation rate would remain around 8% for the next several months. This is uncharted territory for millennial investors.

In this article, I want to look to three dividend stocks that can provide some cover in this difficult climate. Let’s jump in.

Millennials can take advantage of rising food prices with this top grocery retailer

Food price increases have played a key role in driving inflation in 2022. In this recent report, Statistics Canada revealed that food prices were up 8.8% in the year-over-year period. Unfortunately, experts have admitted that it is too early to declare that food prices have peaked. Top grocery retailers like Empire Company (TSX:EMP.A) have delivered big sales growth in this environment.

Shares of this dividend stock have climbed 2% in 2022 as of close on July 20. The stock is down 1.2% in the year-over-year period. In fiscal 2022, Empire reported total sales of $30.1 billion — up from $28.2 billion in the previous year. Meanwhile, EBITDA rose to $2.33 billion compared to $2.14 billion in fiscal 2021.

Empire possesses a favourable price-to-earnings (P/E) ratio of 14. Millennials can also count on its quarterly dividend of $0.165 per share, which represents a modest 1.6% yield.

Here’s another dividend stock to snatch up after the oil and gas price boom

Gasoline prices have been the biggest contributor to rising inflation this year. In June, gas prices were up a whopping 54% in the year-over-year period. Millennial investors should still be interested in buying and holding energy stocks that have an interest in gasoline retailers. Imperial Oil (TSX:IMO)(NYSE:IMO) is one such stock. Its shares have increased 23% in 2022.

This Calgary-based company is engaged in exploration, production, and sale of crude oil and natural gas in Canada. In Q1 2022, Imperial Oil delivered net income of $1.17 billion — up from $392 million in the previous year. Meanwhile, it achieved a 30-year high in cash flow from operating activities of $1.91 billion.

Shares of this dividend stock last had an attractive P/E ratio of 12. Imperial Oil offers a quarterly dividend of $0.34 per share. That represents a 2.3% yield.

One more dividend stock millennials can stash in this environment

Hydro One (TSX:H) is the third dividend stock I’d suggest millennials snatch up in this inflationary climate. This utility has proven to be a dependable profit machine. Moreover, it has delivered dividend growth in every year since its debut on the TSX. Its shares are up 4.9% in 2022 as of close on July 20.

Investors can expect to see its next batch of results in the first half of August. It posted earnings per share (EPS) growth of 15% to $0.52 in the first quarter of 2022. Moreover, revenues rose to $2.04 billion over $1.81 billion in the prior year. Hydro One stock possesses a solid P/E ratio of 20. It offers a quarterly dividend of $0.28 per share, representing a 3.2% 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

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 »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Cash in Your Pocket: 3 TSX Dividend Stocks That Pay Out Monthly

Bolster your monthly income with these three dividends stocks that act like regular paycheques.

Read more »