5 inflation-resistant stocks you can buy now

Highlights

  • UK inflation level is expected to hit 5% next year.
  • Fear of economic stagnation has created pessimism among investors.
  • Stocks, which may outperform and beat inflation include energy stocks, equity REITs, consumer staples, industrial, and financial stocks.

Inflation has been a significant issue for investors in the prevailing economic climate as it erodes the value of their hard-earned money. Inflation level in the UK is currently way above the 2% target set by the Bank of England and is expected to hit 5% next year. The recent spike in inflation, which could lead to economic stagnation, has created a lot of pessimism among investors across the country.

5 inflation-resistant stocks you can buy now

As monetary policy is tightened, and interest rates rise to counter the impact of inflation, the stock market is bound to be impacted. However, the interest rate hike would not impact all stocks the same way as some stocks are more resilient to inflation than others, and they may even be benefited by higher interest rates. High inflation levels may prove out to be beneficial for lenders, and the impact of inflation is least on goods with an inelastic demand, such as alcohol and tobacco.

The stocks which may outperform and beat inflation include energy stocks, equity REITs, consumer staples, industrial, and financial stocks. These stock categories work as inflation hedges and protect the investors’ returns from inflationary pressures. Here are 5 inflation-proof stocks that you can buy anytime.

RELATED READ: How to plan your investment with inflation touching new highs

Inflation heating up

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BP plc (LON: BP)

One of the world's seven largest oil and gas supermajors, BP plc is a London-headquartered oil and gas company. The current market cap is £64,798.10 million. It has given a return of 21.15% in the last one year and its YTD return stands at 25.10% as of 30 November. BP plc’s shares were trading at GBX 318.50 at 9:50 AM on 30 November 2021 (GMT).

Royal Dutch Shell Plc (LON: RDSA)

Royal Dutch Shell Plc’s, popularly known as Shell, current market cap is £65,406.57 million. It has given a return of 15.83% to its shareholders in the last one year and its YTD return stands at 19.33% as of 30 November. Royal Dutch Shell Plc’s shares were trading at GBX £1,549.40 at 9:54 AM on 30 November 2021 (GMT).

British American Tobacco PLC (LON: BATS)

British American Tobacco PLC’s current market cap is £58,651.41 million. It has given a negative return of 5.79% in the last one year. British American Tobacco PLC’s shares were trading at GBX 2,522.50 at 9:57 AM on 30 November 2021 (GMT).

RELATED READ: BoE hints at raising interest rates in Dec. Which stocks to buy?

SEGRO PLC (LON: SGRO)

UK-based real estate investment trust firm Segro PLC’s current market cap is around £17,044.65 million. It has given a return of 56.59% to its shareholders in the last one and its YTD return stands at 48.90% as of 30 November. Segro PLC’s shares were trading at GBX 1,411.00 at 10:00 AM on 30 November 2021 (GMT).

Diageo plc (LON: DGE)

Holding a position as one of the largest distillers worldwide, Diageo plc’s current market cap is £89,138.27 million. It has given a return of 29.27% to its shareholders in the last one year and its YTD returns stand at 31.74%. Diageo plc’s shares were trading at GBX 3,791.50 at 10:03 AM on 30 November 2021 (GMT).

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