In this article, we will look at 5 best stocks to buy to protect against inflation in 2022 and beyond. If you want to read about sectors that have proven to be resilient to inflation in the past and how inflation is progressing in 2022, you can go to 10 Best Stocks to Buy to Protect Against Inflation in 2022 and Beyond.
5. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 53
Newmont Corporation (NYSE:NEM) engages in the production and exploration of gold. The company also explores copper, silver, zinc, and lead. The company has mining properties and ownership interests in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, and Ghana.
In the first quarter of 2022, as announced on April 22, Newmont Corporation (NYSE:NEM) reported gold production of 1.34 million ounces, down 8% year over year, but also reported that its average realized gold price increased 8% year over year to $1,892 per ounce, from $1,751 per ounce in 2021. Newmont Corporation (NYSE:NEM) also guided to meet its production targets for the fiscal year 2022 and forecasts maintaining gold production of 6.2 million ounces for 2022. Newmont Corporation (NYSE:NEM) is one of the largest gold miners in the world by ounces of gold produced, and with gold being a relatively reliable investment in times of high inflation, gold stocks like Newmont Corporation (NYSE:NEM) present an attractive entry point for investors looking to shelter from inflation.
On June 16, Canaccord analyst Carey MacRury lowered his price target on Newmont Corporation (NYSE:NEM) to $80 from $87 but maintained a Hold rating on the shares.
At the close of Q1 2022, 53 hedge funds were long Newmont Corporation (NYSE:NEM) with stakes worth $3.52 billion. This is compared to 45 positions in the previous quarter with stakes worth $1.39 billion. the hedge fund sentiment for the stock is positive.
In the first quarter of 2022, GQG Partners raised its Q4 2021 stakes in Newmont Corporation (NYSE:NEM) by 183%, bringing them to $2.54 billion, and making GQG Partners the dominating shareholder in the company.
Here is what First Eagle Investment Management said about Newmont Corporation (NYSE:NEM) in its third-quarter 2021 investor letter:
“The largest gold miner in the world, Newmont shares lost ground in what was a volatile and ultimately down quarter for the price of gold. The Colorado-based company has continued to execute well in what has been a challenging environment. The company recently reaffirmed its full-year 2021 production guidance, but indicated that it was likely to come in at the mid to low point of the range provided as a result of disruptions from Covid-19 as well as severe weather events. It also noted that inflation pressures were likely to push its costs higher in 2021. None of this changes our opinion of the stock, which has historically offered steady production anchored in good jurisdictions, a good pipeline of organic projects, a strong balance sheet and proven management.”
4. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 61
Costco Wholesale Corporation (NASDAQ:COST) is one of the companies that has managed to maintain consumer demand for its products even with rising inflation, which makes it an inflation-proof stock to invest in. This can be reflected in the company’s revenue for the fiscal third quarter of 2022 which was announced this April. The company reported a revenue of $52.60 billion, up 16.16% year over year, ahead of expectations by $1.11 billion. The company also reportedly experienced increasing sales volumes for May 2022. As reported on June 2, Costco Wholesale Corporation (NASDAQ:COST) reported that its sales volume for May 2022 came in at $18.23 billion, up 16.9% year over year.
Analysts are bullish on Costco Wholesale Corporation (NASDAQ:COST). Shortly after the company reported its sales volume for May 2022, Jefferies analyst Corey Tarlowe raised his price target on Costco Wholesale Corporation (NASDAQ:COST) to $580 from $560 and maintained a Buy rating on the shares.
Hedge funds are raising their stakes in Costco Wholesale Corporation (NASDAQ:COST). Insider Monkey found 61 hedge funds long Costco Wholesale Corporation (NASDAQ:COST) at the end of Q1 2022 with stakes worth $5.41 billion. This is compared to 57 hedge funds in Q4 2021 with stakes worth $5.40 billion.
As of the first quarter of 2022, Ken Fisher’s Fisher Asset Management is the top shareholder in Costco Wholesale Corporation (NASDAQ:COST) with stakes worth $2.43 billion.
ClearBridge Investments mentioned several companies in its “Sustainability Leaders Strategy” fourth-quarter 2021 investor letter, one of which was Costco Wholesale Corporation (NASDAQ:COST). Here is what the firm had to say:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
3. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 64
The Coca-Cola Company (NYSE:KO) is another consumer staples stock that should be considered to buy to protect against inflation in 2022 because of the company’s rich dividend history and strong consumer demand. On April 25, The Coca-Cola Company (NYSE:KO) announced earnings for the first quarter of fiscal year 2022. The company reported earnings per share of $0.64, beating estimates by $0.06. The company generated a revenue of $10.50 billion for the quarter, up 16.44% year over year, ahead of expectations by $670.79 million. Moreover, as of June 17, the stock has returned 6.03% to investors over the past twelve months and has a forward dividend yield of 2.98%.
On May 23, Morgan Stanley released its 15 stock ideas that can weather a bear market, and The Coca-Cola Company (NYSE:KO) was one of them. Morgan Stanley analyst Mike Wilson has a $76 price target and an Overweight rating on The Coca-Cola Company (NYSE:KO).
At the end of Q1 2022, 64 hedge funds were long The Coca-Cola Company (NYSE:KO) with stakes worth $29.17 billion. This is compared to 70 hedge funds in Q4 2021 with stakes worth $28.61 billion. As of Q1 2022, Berkshire Hathaway is the most prominent shareholder in The Coca-Cola Company (NYSE:KO) with stakes of $24.79 billion.
Here is what ClearBridge Investments had to say about The Coca-Cola Company (NYSE:KO) in its “Dividend Strategy” fourth-quarter 2021 investor letter:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
2. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 72
The Procter & Gamble Company (NYSE:PG) has managed to sustain consumer spending and demand even in a rising inflationary environment, making it rank high among the best stocks to invest in to hedge against inflation. This April, the company posted gains for the third quarter of fiscal year 2022 in which it beat both EPS and revenue estimates. The company registered an EPS of $1.33 and beat estimates by $0.04. The Procter & Gamble Company (NYSE:PG) generated a revenue of $19.38 billion, up 7.02% year over year, ahead of expectations by $687.76 million.
The Procter & Gamble Company (NYSE:PG) was also named among the top 15 stocks that can weather a bear market by Morgan Stanley. As of May 23, Morgan Stanly analyst, Mike Wilson, has a $177 price target and an Overweight rating on The Procter & Gamble Company (NYSE:PG).
Insider Monkey found 72 hedge funds long The Procter & Gamble Company (NYSE:PG) at the close of Q1 2022. The total stakes of these funds were valued at $6.06 billion. Of these, GQG Partners was the most bullish hedge fund on The Procter & Gamble Company (NYSE:PG), with stakes worth $1.51 billion.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 83
Exxon Mobil Corporation (NYSE:XOM) is undervalued, pays dividends, and has a track record of strong quarters. These are only some of the features that make this stock a compelling investment to protect against inflation. As of June 17, Exxon Mobil Corporation (NYSE:XOM) has returned 39.76% to investors over the past twelve months, has a forward PE ratio of 8.88, and a dividend yield of 3.85%. Moreover, this April the company announced market-beating earnings for the fiscal first quarter of 2022. The company reported a revenue of $90.50 billion, up 53.01% year over year, ahead of expectations by $5.62 billion.
On June 7, Credit Suisse analyst Manav Gupta raised his price target on Exxon Mobil Corporation (NYSE:XOM) to $115 from $102 and reiterated a Neutral rating on the shares. The analyst raised his 2022 operating EPS estimate for Exxon Mobil Corporation (NYSE:XOM) to $10.54 from $9.29, and also raised his 2023 operating EPS estimate for the oil giant to $10.36 from $8.71, to account for higher natural gas prices and refining earnings.
At the end of the first quarter of 2022, 83 hedge funds disclosed ownership of stakes in Exxon Mobil Corporation (NYSE:XOM). The total value of these stakes came in at $8.55 billion, up from $5.38 billion in the previous quarter with 71 positions. The hedge fund sentiment for the stock is positive.
As of March 31, GQG Partners is the top stakeholder in Exxon Mobil Corporation (NYSE:XOM) with stakes worth $4.27 billion, up 60% from the fund’s Q4 2021 stakes.
Here is what Saturna Capital had to say about Exxon Mobil Corporation (NYSE:XOM) in its “Amana Funds” fourth-quarter 2021 investor letter:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
You can also take a look at 15 Best Energy Stocks to Buy Now and 10 Best Consumer Staples Stocks.
