Stick With Inflation-Beating Companies Now Trending Higher

Quality, long-term stock holdings can deliver great returns for years on end. One sign that a company is a good investment is that it can raise prices year after year. As long as customers continue to buy, and earnings continue to grow, shares can rise.

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  • Some consumer goods companies have been impacted by the recent bout of inflation. The past few years have separated some of these companies into great holdings, while others haven’t performed as well.

    Seasoning and spice producer McCormick & Company (MKC) saw a 19% jump in net income on a year-over-year basis.

    Consumers continue to pay up to season and spice their foods, and the company can outperform inflation. Sales also beat, a sign that consumers didn’t cut back on their spending even amid higher prices.

    McCormick is the leading brand for seasonings and spices. Shares are now starting to trend higher after food and snack companies sold off last year.

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  • Action to take: Investors may like shares for the long haul. Besides the income growth, revenues continue to rise, which should also be good for shares to continue their rally over time.

    McCormick is a dividend growth stock with a current yield of 2.4%.

    For traders, the June $80 calls, last trading for about $2.00, could see mid-double-digit returns or better in the coming weeks on a further rally higher.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

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