CNA, DRX, NG.: Should you pick these stocks with rising cost-of-living crisis?

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CNA, DRX, NG.: Should you pick these stocks with rising cost-of-living crisis?

 CNA, DRX, NG.: Should you pick these stocks with rising cost-of-living crisis?
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Highlights

  • With the sharply rising inflation and higher tax squeeze on budgets, around 1.5 million households across the UK will face higher energy and food bills over the next year.
  • As per NIESR estimates, around 11.3 million lower-income households are set to lose £4.2 billion more than those on median incomes.

With the sharply rising inflation and higher tax squeeze on budgets, around 1.5 million households across the UK will face higher energy and food bills over the next year, according to the National Institute of Economics and Social Research (NIESR).

UK energy bills soaring amid cost-of-living crisis

2022 Kalkine Media®

The think tank revealed in its latest UK economic forecast that real income will fall by 2.4% and urged Chancellor Rishi Sunak to take more steps to stop people from sliding into debt and destitution.

It suggested the Boris Johnson government use around £20 billion in windfall tax to provide emergency support to households and raise Universal Credit by £25 per week for at least six months and give £250 to the lower-income UK households in 2022-23 to save them from extreme poverty.

As per NIESR estimates, around 11.3 million lower-income households are set to lose £4.2 billion and would face bills worth over 90% of their disposable income.

Inflation in the UK is at a 30-year high, and the Bank of England has said that the inflation could reach 10% by the end of this year. London, Northern Ireland, and Scotland accounted for the highest concentration of households that will be hardest hit by the rising cost of goods and services.

UK energy bills are expected to surge to around £3,000 by the end of the year, pushing 40% of UK households into fuel poverty this winter.

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Let us Look at three FTSE-listed energy utility stocks.

Drax Group Plc (LON: DRX)

With a market cap of £3,104.31 million, the FTSE 250 listed power generation company’s share value appreciated by 92.41% over the last one year as of 11 May 2022, while its year-to-date return stands at 27.85%. Drax Group Plc’s shares were trading at GBX 774.00, down by 0.13% at 8:40 AM (GMT), as of 11 May 2022.

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Centrica Plc (LON: CNA)

With a market cap of £4,416.41 million, the FTSE 250 listed international energy services and solutions company’s share value appreciated by 33.74% over the last one year as of 11 May 2022, while its year-to-date return stands at 6.12%. Centrica Plc’s shares were trading at GBX 75.85, up by 1.42% at 8:40 AM (GMT), as of 11 May 2022.

Inflation in the UK is at a 30-year high

2022 Kalkine Media®

National Grid Plc (LON: NG.)

With a market cap of £43,303.38 million, the FTSE 100 listed world’s leading largest listed energy and gas transmission and distribution company’s share value appreciated by 26.95% over the last one year as of 11 May 2022, while its year-to-date return stands at 11.39%. National Grid Plc’s shares were trading at GBX 11,180.50, down by 0.59% at 8:40 AM (GMT), as of 11 May 2022.

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Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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