DEC, IMB, AAL: Stocks to watch out for with growing fears of recession

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DEC, IMB, AAL: Stocks to watch out for with growing fears of recession

 DEC, IMB, AAL: Stocks to watch out for with growing fears of recession
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Highlights

  • UK inflation levels have hit a 40-year high level of 9% in April, as per ONS data.
  • Last month, millions of UK households suffered due to a 54% hike in gas and electricity bills.
  • The ongoing cost-of-living crisis due to rising inflation may lead to the greatest decline in living standards since the 1950s.

UK inflation levels have hit a 40-year high level of 9% in April up from 7% in March. The cost-of-living crisis has been gripping the country and households have been struggling to pay their food and energy bills.

Defensive stocks to invest in amid rising inflation

2022 Kalkine Media®

According to the data released by the Office for National Statistics (ONS) on 18 May 2022, the Consumer Prices Index (CPI) has surged from 7% in the 12 months to March 2022 to 9% in April 2022. After the 11% inflation level observed in 1982, this is the highest level recorded in the UK. On a monthly basis, there was a 2.5% increase in the CPI in April 2022 in comparison to a 0.6% increase in April 2021.

Economic restrictions emerging due to the covid-19 pandemic, accompanied by the supply chain disruptions caused due to Brexit, have been responsible for the rising inflationary levels. Recently, the inflationary situation was further worsened due to the escalation of the Russia-Ukraine crisis, leading to shortage of food, energy, and other resources across the globe. Last month, millions of UK households suffered due to a 54% hike in gas and electricity bills. Regulators had hiked the energy price cap due to the earlier surges in wholesale prices.

The ongoing cost-of-living crisis due to rising inflation may lead to the greatest decline in living standards since the 1950s, as per economists. The investor sentiment has been souring in this inflationary environment, but defensive stocks are on the radar of investors as they provide a secure stream of dividends and steady earnings irrespective of the market conditions. Here are 3 stocks that investors can watch amid rising inflation.

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  • Diversified Energy Company plc (LON: DEC)
  • Mcap: £1,024.91 million
  • Dividend yield: 1%

The shares of the independent oil and gas producer, Diversified Energy Company plc, were up by 1.41% at around 11:00 AM (GMT+1) on 18 May 2022, at GBX 122.20. The FTSE 250 company has provided its shareholders with a return of 4.19% over the last one year as of 18 May 2022. The company is currently offering a dividend yield of 11.1% a year.

Defensive stocks to invest in amid rising inflation

2022 Kalkine Media®

  • Imperial Brands plc (LON: IMB)
  • Mcap: £17,558.79 million
  • Dividend yield: 7.6%

The shares of the British tobacco business, Imperial Brands plc, were up by 1.62% at around 11:00 AM (GMT+1) on 18 May 2022, at GBX 1,877.50. The FTSE 100 company has provided its shareholders with a return of 17.48% over the last one year as of 18 May 2022. The company is currently offering a dividend yield of 7.6% a year.

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  • Anglo American plc (LON: AAL)
  • Mcap: £47,096.12 million
  • Dividend yield: 6.5%

The shares of the UK-based mining firm, Anglo American plc, were down by 1.23% at around 11:00 AM (GMT+1) on 18 May 2022, at GBX 3,455.50. The FTSE 100 company has provided its shareholders with a return of 8.12% over the last one year as of 6 May 2022. The company is currently offering a dividend yield of 6.5% a year.

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