Inflation Stays Hot: 2 TSX Stocks to Protect Your Wealth

Consider TC Energy (TSX:TRP)(NYSE:TRP) and another top stock to help you dodge and weave past inflation’s last few punches.

| More on:
edit Safety First illustration

Image source: Getty Images

We all want inflation to go away already. It’s plagued us at the grocery store, the gas pump, and everywhere in between. With U.S. consumer price index numbers coming in hotter than expected, and with inflation still well above 7%, there’s concern that central banks may need to pick up the pace further with rate hikes to see prices brought back under control. It’s a terrible situation to be in, and investors are a tad worried that the medicine central banks are using may be just as bad as inflation’s impact.

Undoubtedly, nobody wants to see a recession and a return of the type of environment we briefly flirted with in the early innings of the 2020 stock market crash. Eventually, the Federal Reserve (the Fed) and Bank of Canada will ease off on the rate hikes, but not until they’ve accomplished their mission. As markets turn lower over the hotter inflation number, don’t expect Fed chairman Jerome Powell to announce any measures to accommodate stocks. Though a soft landing would be ideal, investors should be prepared for a rockier ride, because we are entering uncharted territory.

This piece will check out two TSX stocks with reliable dividends and pricing power. When you hunt for securities that can help you navigate an inflationary hailstorm, such traits can help investors dampen the inevitable blow coming their way.

When seeking out dividend stocks, bigger isn’t always better. Instead, investors should insist on lengthy dividend histories that include frequent hikes. Further, investors should weigh a firm’s cash flow stability in the face of a downturn. Yes, the 2023 recession could prove super mild. However, there’s a slight chance that it could prove more severe. And investors should be ready for anything to happen as the wild 2020s continue.

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) is an incredibly well-run North American midstream company with a diverse range of pipeline assets spanning Canada, the U.S., and Mexico. With the ongoing Ukraine-Russia crisis hurting the world’s energy supply, the demand for domestic oil and gas could continue to stay robust for years down the road.

The 5.69% dividend yield may not be the highest of the pipeline firms. However, TC Energy arguably has one of the most exciting growth plans. With the latest partnership with Mexico’s state-owned utility, TC Energy has an opportunity to take its Mexican natural gas and liquified natural gas (LNG) business to the next level.

TC Energy is a utility-like firm that’s likely to continue rewarding investors with growing payouts for many years to come. In due time, I wouldn’t be surprised to see TC Energy follow in the footsteps of its peers with big renewable energy projects.

Agnico Eagle Mines

Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) is a gold miner that’s really been weighed down by lacklustre gold prices. Though gold could sag below the US$1,700 level, I’d argue that a steep downturn in gold prices is already partially baked into AEM stock.

Undoubtedly, gold miners tend to amplify the moves made by commodities they produce. The stock shed over 40% at its worst before bouncing back to $56 and change per share. At writing, shares yield 2.75%, which is well above the precious metals industry average yield of 2.2%. Even with weakness in precious metal prices, I view the payout as safe, albeit a tad stretched at 88.45%.

Gold is a time-tested asset, and it’s heavily out of favour in an environment where uncertainties couldn’t be greater. I think gold is way oversold and due for a steep move higher, as investors hit the panic button over rates.

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

money cash dividends
Stocks for Beginners

Where to Invest $10,000 in April 2024

If you've already created a diversified portfolio and are looking for more options from a windfall, here is where I…

Read more »

data analyze research
Investing

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

Brookfield Asset Management (TSX:BAM) is one of the best Canadian stocks to buy for those looking to put capital to…

Read more »

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

3 CRA Benefits Most Canadians Can Grab in 2024

You can save on taxes by claiming the dividend tax credit on Fortis Inc (TSX:FTS) shares.

Read more »

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

3 Roaring Stocks to Hold for the Next 20 Years

These top TSX stocks are excellent long-term buys, given their multi-year growth potential and solid underlying businesses.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »