U.S. consumer prices climbed at the fastest pace in October since 1990, but there are still stocks with enough dividend growth to outpace inflation, says Osterweis Capital Management’s Larry Cordisco.
Cordisco’s remarks on CNBC’s ‘The Exchange’
One name that particularly pops out to him is Visa Inc (NYSE: V), with a dividend that’s gone up three folds over the last five years. On CNBC’s “The Exchange”, Cordisco said the payments company will outperform as international travel continues to return.
Visa has a history of increasing dividends, and international travel and cross border spending is a big tailwind for it. They make three to four times as much money on those transactions versus what they do domestically. So, they’ll help it increase earnings growth that will translate to a higher dividend.
International travel, he noted, has another 40% recovery left before it’s back to the pre-pandemic 2019 levels. Shares of Visa are currently down more than 2.0% on a year-to-date basis.
What other dividend stocks does Cordisco like?
Another stock that the Osterweis’ expert says will do good next year despite inflation is Union Pacific Corporation (NYSE: UNP). Giving his reasons why, he said:
The global pandemic and the supply chain problems were a tremendous headwind for UNP. Volumes at their premium businesses like Intermodal or Autos are down nearly 9.0% year-over-year. Those headwinds will turn into tailwinds as we get into inventory replenishment in 2022.
Cordisco expects inflation to keep at a five to ten year high in 2022. Other dividend names he likes include CVS Health that’s already up more than 30% this year.
A day earlier, Angel Oak Capital Advisors’ Cheryl Pate said “financials” was the way to protect your investment portfolio against inflation.
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