In this article, we discuss 5 best stocks to buy amid inflation in 2022 and beyond. If you want to see more stocks in this selection, click 10 Best Stocks to Buy Amid Inflation in 2022 and Beyond.
5. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 64
The Coca-Cola Company (NYSE:KO) is famous for its signature carbonated drink, Coca-Cola. However, it also manufactures other non-alcoholic drinks. The company has a record of increasing its dividend payout for the past six decades. The Coca-Cola Company (NYSE:KO) has a dividend yield of 2.88%. Its last dividend was declared on April 27, which was paid on July 1 to shareholders of record as of June 14.
The Coca-Cola Company (NYSE:KO) is a consumer staples corporation whose products are expected to sell no matter how the economy suffers. Especially now that most of the company’s bottling business has been turned over to third parties in return for royalty payments, the Coca-Cola Company (NYSE:KO) has even higher revenue margins.
At the end of the first quarter of 2022, The Coca-Cola Company (NYSE:KO) posted an EPS of $0.64 compared to $0.58 estimates. The company also outperformed the revenue estimates of $9.83 billion by $670.79 million.
Out of the 912 hedge funds tracked by Insider Monkey, The Coca-Cola Company (NYSE:KO) was part of 64 hedge fund portfolios, with a combined stake value of $29.17 billion. Berkshire Hathaway was the biggest position holder in the company, with 400 million shares valued at $24.8 billion. In the same quarter, GQG Partners also increased its holding in The Coca-Cola Company (NYSE:KO) by an astronomical +5863% to $801.5 million.
Here is what ClearBridge Investments said about The Coca-Cola Company (NYSE:KO) in its Q4 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.”
4. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 70
A market leader in the oncology space, Bristol-Myers Squibb Company (NYSE:BMY) is one of the companies that has immensely low volatility with a 5-year monthly beta of 0.48. Between 2010 and 2020, the company grew its revenue from $19.48 billion to $42.52 billion. In addition, Bristol-Myers Squibb Company (NYSE:BMY) believes that its new product launches will generate close to $25 billion by 2029. The company has also been buying back shares in the previous years and increased its share repurchase program by $15 billion in December 2021.
BofA analyst Geoff Meacham raised Bristol-Myers Squibb Company (NYSE:BMY)’s price target to $80 to $78, maintaining a Buy rating on the company shares. According to the analyst, the recent acquisition announcement of the clinical-stage precision oncology company, Turning Point (NASDAQ:TPTX), might not be significantly moving for BMY. However, the deal is seen as a strategic plus point as Bristol-Myers Squibb Company (NYSE:BMY) continues to expand its early cycle portfolio.
From 2019 to 2021, Bristol-Myers Squibb Company (NYSE:BMY)’s cash flow increased to $15.2 billion from $7.4 billion. Moreover its net debt decreased by $3 billion to $28.4 billion. More importantly, the company has an annual dividend payout rate of $2.16.
According to the Insider Monkey database, hedge funds showed a positive sentiment towards Bristol-Myers Squibb Company (NYSE:BMY) in the first quarter of 2022. 70 hedge funds were bullish on the company compared to 66 in the fourth quarter of 2021.
3. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 72
The Procter & Gamble Company (NYSE:PG) is an Ohio-based consumer goods company. The company’s FQ3 2022 earnings reports showed organic growth of 10%, and sales volume increased by 3%. These figures reflect that the company remains unaffected by rising prices during inflation due to its business model.
The Procter & Gamble Company (NYSE:PG) recently posted its FQ3 2022 earnings report, according to which the company made $19.38 billion worth of net sales compared to $18.1 billion in the same quarter of 2021, showing a change of 7%. The operating income showed an increase of 6% to $4.07 billion. Moreover, the company made a stock repurchase of $1.20 billion.
The Procter & Gamble Company (NYSE:PG) has been raising its dividends for 66 straight years. The most recent increase was of $0.0435 to $0.913, which was paid out on May 16, 2022, to shareholders of record as of April 21. The company has a dividend yield of 2.76% and a 23.1 P/E ratio.
2. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
The pharmaceutical giant Johnson & Johnson (NYSE:JNJ) is one of the biggest companies in the United States, with a market cap of $445.917 billion. At the end of FY 2021, the company generated $93.8 billion in sales as its pharmaceutical business grew by 35% and medical devices sales by 16%.
Johnson & Johnson (NYSE:JNJ) is one of the few companies with a AAA credit rating. It is one of the safest companies to turn to amid inflation. Its share price increased 3x in the last ten years and sales grew by 50%. Johnson & Johnson (NYSE:JNJ) has the reputation of not relying on specific drugs or segments but keeps a more diversified range of products than its competitors. In 2021 alone, the company made 147 innovation deals and launched 20 new medical equipment products.
SVB Leerink analyst David Risinger on May 23 assumed Johnson & Johnson (NYSE:JNJ)’s coverage with an Outperform rating and a $200 price target. The analyst believes the company can deliver consistent earnings growth and carry out value-enhancing mergers and acquisitions.
Here is what Distillate Capital had to say about Johnson & Johnson (NYSE:JNJ) in its second-quarter 2021 investor letter.
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 110
With the rising inflation and interest rates, JPMorgan Chase & Co. (NYSE:JPM) is set to make profits and benefit its investors. According to the Insider Monkey database, 110 hedge funds had stakes in the company at the end of Q1 2022, compared to 107 in the previous quarter. Fisher Asset Management is the leading stakeholder in the company with 7.76 million shares, valued at approximately $1.058 billion.
In the first quarter of 2022, JPMorgan Chase & Co. (NYSE:JPM) missed its EPS estimates by a small margin while outperforming the revenue forecasts. The company reported an EPS of $2.63, compared to the estimated $2.71. On the other hand, JPMorgan Chase & Co. (NYSE:JPM) generated revenues of $30.72 billion, 1.05% over the estimates.
On May 24, Societe Generale analyst Andrew Lim raised the price target of JPMorgan Chase & Co. (NYSE:JPM) to $150 from $145 and upgraded the company shares to Buy from Hold.
ClearBridge Investments mentioned JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2021 investor letter. Here is what the fund said:
“Our energy and financials holdings kept pace in the 2021 rally. In financials, JPMorgan benefited from strong economic growth, a rise in Treasury yields, and a benign credit environment.”
You can also take a peek at 10 Best Undervalued Dividend Stocks To Buy and 10 Best Recession Stocks To Buy.
