As the global economy continues to recover from the COVID-19 pandemic, one area of concern is certainly inflation. Pent-up demand from consumers and supply chain constraints have led to a rise in prices for many products. This inflation may continue for another year, so investors should consider looking into inflation-resistant stocks such as EOG Resources, Inc. (NYSE:EOG), Olin Corporation (NYSE:OLN), and Coca-Cola Company (NYSE:KO).The global economic recovery has been a boon to businesses and stocks. But underneath these gains hides a potential spoiler, inflation. The reopening of the economy, combined with labor shortages and pent-up consumer demand, driven by government stimulus, has led to product shortages and supply chain obstacles. This resulted in higher product prices and inflation.
The Consumer Price Index (CPI), which measures the increase in the price of goods over a period of time, rose more than five percent in the twelve months ending in September. Making matters worse, in a recent speech, Fed Chair Jerome Powell said that the global supply chain crisis could remain through 2022. Plus, inflation not only harms corporate margins but eats into investor returns as well.
However, some companies can generate higher profits when prices rise. That’s why investors should consider companies with higher pricing power. This means they can raise prices faster and pass the costs onto consumers. These stocks can be found in sectors and industries such as energy, chemicals, and consumer staple. EOG Resources, Inc. (EOG), Olin Corporation (OLN), and Coca-Cola Company (KO) are three such stocks worth a look.