The Best Stocks to Buy to Fight Inflation

As investors, we are concerned about inflation because it causes higher input costs for companies. In turn, greater expenses put downward pressure on margins making companies less profitable.

As a result, less earnings growth or, even worse, lower earnings tends to impact stock prices negatively. So what's an investor to do?

 It’s probably not possible to entirely inflation-proof your stock portfolio. However, you can fight inflation with a more diversified portfolio. Here we discuss some of the best stocks to buy for that purpose.

The Best Stocks to Buy to Fight Inflation: Coca-Cola

Besides good performance during a period of high inflation, Coca-Cola is a long-time dividend stock.

 It has paid one since 1920 and has increased it for more than 60 consecutive years. As income and dividend growth stocks go, Coca-Cola is a superstar. In addition, according to his 2021 letter, Warren Buffett owns about 9.2% of the shares.

The stock price is off its high, and the price-to-earnings ratio is down a bit to 25.6X. Still, investors may want to wait for a lower price and valuation before diving in and buying Coca-Cola.

International Business Machines

The second stock on the list of best stocks for inflation is International Business Machines (IBM). The company is now positioning itself as a hybrid cloud and artificial intelligence (AI) player.

The new IBM is primarily focusing on software and consulting. Additionally, it has a monopoly in mainframes and is a significant player in transaction processing.

Investors should look at IBM for its dividend yield, reasonable P/E ratio of 14.1X, and improved outlook. Few blue chip stocks offer as high a dividend yield as IBM. 1. Ticker: IBM    2. Stock Price: $129.4

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