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Smart investors are looking for ways to preserve their capital, generate income and protect themselves from inflation. The rising debt issues worldwide, the concerns of paper currencies being printed to stimulate the weak economy, and a lack of trust in the financial system are leading many to choose gold. Aside from gold there are many stocks that can achieve all those goals plus they generate income through dividends. The biggest shortcoming for gold is that it does not generate any income and while that is not a huge issue in the short term because rates are very low, it would be an issue if rates move higher. The stocks below offer a dividend, inflation protection and have products that will be in demand whether the global economy declines or rises.

Molson Coors Brewing Company (NYSE:TAP) makes, markets and distributes some of the top beer brands such as Coors Light, Molson, Carling, Pilsner, Keystone Light. The company also brews or distributes products under license from third parties, including major brands like Heineken, Amstel Light, Asahi, Miller Lite, Milwaukee's Best, Foster's and others. Beverage companies generally have strong pricing power in times of inflation and therefore can raise prices. This protects profit margins and allows the company to increase dividend payments over time which gives investors inflation protection.
Here are some key points for TAP:
  • Current share price: $44.03
  • The 52 week range is $42.50 to $51.11
  • Earnings estimates for 2011: $3.67 per share
  • Earnings estimates for 2012: $3.95 per share
  • Annual dividend: $1.28 per share which yields 2.9%

Kraft Foods, Inc. (KFT) is a leading maker of snacks, candy, juices, and many other food products worldwide. This company owns many well known brands such as Oscar Mayer, Maxwell House, Trident, Dentyne, Hollywood, Halls, Jacobs, Nabisco, Oreo, LU and others. Food companies have strong pricing power in times of inflation and there products are always in demand. This stock has been rising recently, so I would wait for pullbacks before investing.
Here are some key points for KFT:
  • Current share price: $35.36
  • The 52 week range is $28.56 to $36.02
  • Earnings estimates for 2011: $2.23 per share
  • Earnings estimates for 2012: $2.50 per share
  • Annual dividend: $1.16 per share which yields 3.3%
Merck and Company, Inc. (NYSE:MRK) is a global pharmaceutical giant. Pharmaceutical companies generally have strong pricing power in times of inflation and therefore can raise prices. Pharmaceutical products are in demand even when the economy is weak and this is why investors often seek drug companies as a safe harbor in tough times.

Here are some key points for MRK:
  • Current share price: $36.03
  • The 52 week range is $31.06 to $37.68
  • Earnings estimates for 2011: $3.73 per share
  • Earnings estimates for 2012: $3.85 per share
  • Annual dividend: $1.52 per share which yields 4.3%

Johnson & Johnson (NYSE:JNJ) is a global maker of health care and medical products. This company owns well known brands such as Listerine, Motrin, Band-aid, Reach, Splenda, Tylenol, Lubriderm, Sudafed and many more. Again, these types of products remain in high demand regardless of the global economic situation and they have strong pricing power which will protect investors from inflation.

Here are some key points for JNJ:
  • Current share price: $67.63
  • The 52 week range is $56.86 to $68.05
  • Earnings estimates for 2011: $4.95
  • Earnings estimates for 2012: $5.26
  • Annual dividend: $2.28 per share which yields 3.4%
Chevron Corporation (NYSE:CVX) is one of the largest integrated oil and gas companies worldwide. Chevron is well diversified in the energy sector generating revenues from many sources, from oil, natural gas, refining, etc. Oil is one of the best ways to hedge your portfolio against inflation and weakening paper currencies. In addition, demand for oil will only rise with a worldwide population increase and even though oil demand may drop in a weak global economy, it is still a must have product.
Here are some key points for CVX:
  • Current share price: $105.32
  • The 52 week range is $70.96 to $109.94
  • Earnings estimates for 2011: $12.99 per share
  • Earnings estimates for 2012: $12.93 per share
  • Annual dividend: $3.12 per share which yields 3%
Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: 5 Dividend Stocks Offering Inflation Protection