It’s an old term, so old that many young investors may not even really know what it means. While the term “stagflation” was coined in the early 1960s, it is most often associated with the dire economic conditions that prevailed in the 1970s. After the Arab oil embargo at the start of the decade, the US economy shrank. experienced five negative quarters of gross domestic product growth. Therefore, you had a stagnant economy with increasing inflation, or stagflation.
In a new research report, BofA Securities searched the research archives for companies that performed well during times of stagflation. They said this while discussing the methodology: “We selected the Top 50 S&P 500 companies with the best historical performance during periods of stagflation (below-trend growth and rising inflation) – based on actions with data available up to 1968 (165 companies). “
In turn, we sifted through the BofA Securities list for dividend paying stocks that were listed for purchase by the company, and that were reasonably priced and produced some of the highest median returns during the years. periods of stagflation. We found five that are great ideas for investors who are somewhat leery of the market but want to stay involved. While all of these stocks are listed as Buy, it is important to remember that no analyst report should be used as the sole basis for any buy or sell decision.
This tobacco manufacturer now offers value investors a great entry point and has been hit recently 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 has a 51% share of the US cigarette market, led by its leading cigarette brand Marlboro.
Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In March 2008, it sold its international cigarette business to its shareholders. In December 2018, the company acquired 35% of Juul Labs and a 45% stake in cannabis company Cronus for $ 1.8 billion.
Shareholders receive a dividend of 7.48%. BofA Securities has a target of $ 58 on Altria stock and the Wall Street consensus target is $ 54.31. The shares closed Tuesday at $ 48.11 each.