SPECIAL REPORT The Top 7 Stocks for 2024

3 Stocks to Buy for Retirees Looking to Beat Inflation

Advertisement

  • Here are three retirement stocks to buy for retirees looking to beat inflation.
    • Berkshire Hathaway (BRK-A, BRK-B): Warren Buffett’s holding company remains a gold standard.
  • Fair Isaac Corp. (FICO): The company behind FICO scores is a good bet in any economic environment.
  • Eli Lilly (LLY): The company’s FDA-approved weight loss drug is expected to be a blockbuster.
stocks for retirees to beat inflation - 3 Stocks to Buy for Retirees Looking to Beat Inflation

Source: Shutterstock

At 3.7%, inflation remains an issue. While consumer prices have come down from their peak of 9.1% in June 2022, the inflation rate in the U.S. remains well above the Federal Reserve’s 2% annualized target. And although markets are not expecting any further interest rate hikes from the central bank, there is no guarantee that rates won’t go higher if inflation persists. It’s understandable then that investors are hoping to find stocks for retirees to beat inflation.

Between June and August of this year, inflation rose each month. This has created continued uncertainty for investors as they try to navigate the current economic environment. The good news is there are some stocks that appear to be impervious to the current inflationary environment and elevated interest rates. These options make for some great inflation-beating retirement stocks.

Here are three stocks to buy for retirees to beat inflation. Each of these securities has proven to be a long-term winner for investors looking for evergreen retirement stocks.

Berkshire Hathaway (BRK-A, BRK-B)

The logo for Berkshire Hathaway displayed on a smartphone screen.
Source: IgorGolovniov / Shutterstock.com

Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), the holding company of famed investor Warren Buffett, is a great bet in any economy. The company consistently delivers for its stockholders. Just recently, Berkshire announced that its third-quarter operating profit rose 40% from a year earlier to reach a record $10.8 billion. The company, which owns a myriad of businesses, also posted a record amount of cash on hand at the end of the quarter, totaling $157.2 billion.

The previous record for its cash holdings was set in 2021 when it reached $149.2 billion. Cash now accounts for 20% of Berkshire’s market capitalization. The company is benefiting from higher short rates with its cash position earning more than 5% interest. These record results come as Buffett has been taking advantage of surging bond yields, buying up short-term Treasury bills yielding 5% or greater. The company also spent $1.1 billion to repurchase its own shares in the quarter, bringing the nine-month total to $7 billion.

Berkshire Hathaway’s Class B stock has increased 12% year to date. With solid performance like this, Berkshire Hathaway is a smart option for investors looking to purchase inflation-beating retirement stocks.

Fair Isaac Corp. (FICO)

a pile of credit cards, credit card interest rates
Source: Teerasak Ladnongkhun/Shutterstock.com

Data analytics company Fair Isaac Corp. (NYSE:FICO) is another company that performs well in good times and bad. The company is best known for its FICO® Score, the standard measure of consumer credit risk used by banks, mortgage lenders and other financial institutions. Fair Isaac just reported fiscal fourth quarter financial results that beat Wall Street forecasts. Total revenue for the three months ending Sept. 30 was $389.7 million compared with $348.7 million a year earlier.

The company reported that revenue in its “scores” business unit rose 12% from a year earlier to $195.6 million, lifted higher by price increases. Revenue from the software unit, which sells analytics and data technologies to businesses, increased 11% to $194.2 million. On the bottom line, the company reported net income of $101.4 million, or $4.01 per share, compared with $90.7 million, or $3.55 a share, a year earlier.

FICO stock has increased 62% year to date. Offering consistent performance, FICO offers a great stock for retirees to beat inflation.

Eli Lilly (LLY)

Eli Lilly and Company World Headquarters. Lilly makes Medicines and Pharmaceuticals XI
Source: Jonathan Weiss / Shutterstock.com

Pharmaceutical company Eli Lilly (NYSE:LLY) looks to be off to the races after the U.S. Food and Drug Administration (FDA) approved its new weight loss drug and obesity treatment. The prescription drug, which is already sold as a diabetes treatment under the name Mounjaro, will now be marketed as a weight loss treatment called Zepbound. The medication helps people lose weight through an injection and is widely expected to be one of the top-selling prescription drugs of all time, brining in billions in sales.

Eli Lilly’s weight loss drug is expected to compete directly against Novo Nordisk’s (NYSE:NVO) similar medication Ozempic. Eli Lilly has set a list price for Zepbound of $1,059.87 for a month’s supply, which is lower than Ozempic’s list price of $1,349.02. Even before the FDA approval, Mounjaro had become a strong seller for Eli Lilly as doctors prescribed it off-label for weight loss. In its recent third-quarter earnings report, Eli Lilly said that Mounjaro sales topped $1 billion, up from $100 million a year earlier.

LLY stock has risen 62% so far this year. With its new drug set to offer an alternative to the already popular Ozempic, LLY stock looks to be one of the better stocks for retirees to beat inflation.

On the date of publication, Joel Baglole held long positions in FICO and LLY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


Article printed from InvestorPlace Media, https://investorplace.com/2023/11/3-stocks-to-buy-for-retirees-looking-to-beat-inflation/.

©2024 InvestorPlace Media, LLC