Inflation Affecting Your Portfolio? Here Are 3 Stocks That May Beat It

Inflation is taking a bite out of your wallet. Your groceries are more expensive, and so are materials, labor, and freight for companies. Some companies can't raise prices since consumers won't pay them.

Instead, they must absorb the cost, and thus they are less profitable. In turn, lower profits usually mean lower stock prices.

However, some companies are doing well despite inflation and have pricing power. If you're worried inflation might be affecting your stock portfolio, here are three stocks that may beat it.

Occidental Petroleum

Occidental Petroleum (OXY) is a large oil and natural gas exploration and production company operating around the world.

Walmart

The company remains the largest retailer in the world, with around 10,500 stores operating under the Walmart and Sam's Club brands.

Chubb

The company offers property & casualty (P&C) insurance, agricultural insurance, life insurance, commercial and specialty insurance, and reinsurance.

Inflation generally means higher costs for companies. Inputs such as commodities, materials, supplies, labor, and freight are higher. Some companies cannot recoup these higher costs quickly, and consequently, margins and profitability decline.

However, when companies offer products with few alternatives, like oil and gasoline, or manage to be the low-price leader, they thrive as consumers trade down. Insurance companies and banks do better as the fixed income assets they hold on their balance sheet generate more investment income.

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