How to fight inflation with stock investing: Buy what you know – and what you eat

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Sluggish consumer goods companies like food and beverage companies typically do well even during tough economic times and market turbulence. That’s because even when people limit voluntary spending like dining out or streaming video subscriptions, they still need to eat, and it’s cheaper to do it at home.
So investors are betting on food and beverage makers at this time of high inflation and economic fear — and that was very clear on Monday, as several food stocks rose even as the broader market slumped again.
shares of Campbell Soup (CPB), ConAgra (KAG), Kellogg (K), General Mills (GIS), Kraft Heinz (CHC), smuggler (SJM), Tyson Foods (TSN) and spice manufacturers McCormick (MKC) won on Monday. All of these stocks are also in the green for the year. In the meantime, Coke (KO) and Hershey (HSY) are also enjoying solid gains and both stocks are not far from record highs.

It’s not just the necessity factor: inflation is also lifting the fortunes and prospects for many food companies. Tyson Foods, for example, on Monday reported better-than-expected earnings and sales and a healthy outlook, thanks in part to rising retail prices for beef and chicken.

Stewart Glendinning, Tyson’s chief financial officer, said in a conference call with analysts that “consumer demand has been resilient so far, although we have worked to control inflation through price hikes” and that “the relevance of the category allows for continued strong demand.” has”, although prices have fallen high. In other words, people still eat animal protein and are willing to pay for it.

Coca-Cola, Kellogg and Kraft Heinz have also reported solid gains over the past few weeks.
According to data from FactSet Research, the consumer staples sector had the highest percentage of companies reporting first-quarter results that beat forecasts, led by large profit increases at the frozen french fries maker Lamb Weston (Lw), Molson Coors (BEAT) and giant for agricultural products and flavors Archer Daniels Midland (ADM).

Another factor that makes these stocks attractive to investors is that many food and beverage companies pay steady dividends with relatively high yields. That makes them a potential option even for conservative investors, even as long-term bond yields have skyrocketed on inflation fears.

Kellogg pays a dividend of 3.2%, which is about the same rate as 10-year government bonds. Cola and his rival Pepsi (PEP) have dividends that also yield nearly 3% along with the Oreo maker Mondelez (MDLZ).
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