To everyone who has been paying higher prices recently for a host of different items, the comments from Federal Reserve Chair Jay Powell and Treasury Secretary Janet Yellen about the current inflation as being “transitory” may ring pretty hollow. While Powell and Yellen have backpedaled some, saying things should settle down next year, tell that to consumers who have seen a staggering increase in the price of groceries and drivers paying over $5 a gallon for gasoline in some places.
The U.S. Department of Labor’s Producer Price Index, which measures wholesale prices, rose 0.6% in October, translating into an 8.6% increase year over year. That was the highest annual pace in records going back nearly 11 years. Needless to say, investors are not happy about this turn of events. That combined with an overbought, overleveraged and very overpriced stock market hints that we could be very close to a lightning-fast sell-off.
For investors looking to book profits and move to areas that can fight through the inflation backdrop, we screened the BofA Securities research universe for commodities, real estate and other sectors that look solid now. We found five Buy-rated dividend-paying stocks that would be good areas to move to now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Agnico Eagle Mines
This is one of Wall Street’s most preferred North American gold producers. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold-mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden.
The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983. The stock was crushed as gold sold well off the January highs, and with an inflation surge you can bet many savvy portfolio managers are ready to add back top companies like this.
Agnico Eagle Mines stock investors receive a 2.60% dividend. The BofA Securities price target is $67, and the consensus is much higher at $99.13. Shares closed on Tuesday trading at $55.53 apiece.