We got what we expected last week, as the consumer price index and producer price index came in again at levels not seen in 40 years. One thing that is almost a certainty now is that things could get much worse before they get better. Next week, the Federal Reserve will meet and another 75-basis-point increase will be announced. Fortunately, it looks like the 1% increase that was being tossed around is off the table. While rates are still low on a historical basis, the reality is that rising rates combined with inflation are slowing the economy.
While retail sales surprised to the upside last week, and gasoline prices have finally come down some, the stock market remains volatile and likely will for the rest of the year. So what should investors do now? Seek out companies that can continue to do business as usual, that will not get stung by inflation, that pay big dividends and that have stocks rated Buy by top Wall Street firms.
We found seven that make good sense now. While all are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Altria
This maker of tobacco products offers value investors a great entry point now as it has been hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In 2008, it spun off its international cigarette business to shareholders. The stock was pounded recently, as last month the U.S. Food and Drug Administration announced the ban of all sales of Juul vape pens. This decision was made after pleas from government officials and public health institutes that say Juul is focused on selling its nicotine products to teenagers. A court has granted Juul’s request for a stay on the ban, allowing the company to still sell the products while an appeal is made on the decision.
While this gets sorted out, it is a good bet that Altria stock investors will still receive an 8.38% dividend. Deutsche Bank has a $46 target price, and the consensus target on Wall Street is even higher at $52.33. The shares closed on Tuesday at $42.96.
Antero Midstream
With shares trading under $10 apiece, this very wellun company offers a huge total return package. Antero Midstream Corp. (NYSE: AM) owns, operates and develops midstream energy infrastructure. It operates through two segments.
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