Investing

5 Top Stocks and 6 Sectors to Own If Inflation Makes a Comeback

Lee Jackson

Published: March 28, 2016 9:50 am

Last Updated: January 13, 2020 11:28 am

Inflation is a word that hasn’t been uttered that much for the past few years, and with good reason. With the exception of the run of oil to more than $100 a barrel a few years ago, rampant inflation has all but been exorcised from the Wall Street lexicon. Increasing productivity, combined with cheap foreign labor, has kept prices level for years.

A new Deutsche Bank research report says that some investors may be thinking the Federal Reserve is behind the curve when it comes to growing inflationary signs. The last big bout with inflation in the 1970s brought along with it terrible stock market performance. Deutsche Bank says that the top sectors to own at the beginning of an inflationary period are real estate, energy and semiconductors, while later on in the cycle investors should look to move into food and staples, retail and autos.

It is more likely that we stand at the front end of the inflation cycle, if there indeed is one, so we screened our Wall Street research data base for stocks to buy that fit the early cycle sectors and also paid good dividends.

Simon Property Group

This top company is one of the largest real estate investment trusts (REIT) and boasts an outstanding market position. Simon Property Group Inc. (NYSE: SPG) invests in the real estate markets across the globe. It engages in investment, ownership, management and development of properties, primarily regional malls, premium outlets, mills and community/lifestyle centers. Through its subsidiary partnerships, it owns or has an interest in about 230 properties in the United States and Asia. The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.

Shareholders receive a 3.1% dividend. The Thomson/First Call consensus price target for the stock is $220.11. The shares closed most recently at $201.44.

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