We got what we expected last week as the consumer price index and producer price index returned to levels not seen in 40 years. One thing that is almost certain now is that things may well get worse before they get better. Next week the Federal Reserve will meet and another 75 basis point increase will be announced. Fortunately, it seems that the 1% increase that was proposed is not an option. While rates are still historically low, the reality is that rising rates combined with inflation are slowing the economy.
While retail sales surprised on the upside last week and gasoline prices finally eased, the stock market remains volatile and will likely remain so for the rest of the year. So what should investors do now? Look for companies that can continue to do business as usual, that won’t be stung by inflation, that pay big dividends, and whose stocks are listed for buy by the best companies on Wall Street.
We found seven that make sense now. Although all are rated Buy, it is important to remember that no single analyst report should be used as the sole basis for any buy or sell decision.
This tobacco maker now offers value-oriented investors a great entry point, as it has been hurt by the slowdown in cigarette sales. 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 holds 51% of the US cigarette market, led by its leading brand of Marlboro cigarettes.
Altria also owns more than 10% of Anheuser-Busch InBev, the world’s largest brewer. In 2008, it sold its international cigarette business to shareholders. The stock has taken a beating recently, as last month the US Food and Drug Administration announced a ban on all sales of Juul vape pens. The move came after calls from government officials and public health institutes who say Juul is focused on selling its nicotine products to teenagers. A court granted Juul’s request to stay the ban, allowing the company to continue selling the products while an appeal is filed against the decision.
While this is settled, it’s a safe bet that Altria stock investors will still receive an 8.38% dividend. Deutsche Bank has a target price of $46, and the consensus target on Wall Street is even higher at $52.33. Shares closed Tuesday at $42.96.
With shares trading at less than $10 each, this very well-managed 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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