Written by Amy Legate-Wolfe at The Motley Fool Canada
If you’re one of the Motley Fool investors out there right now looking to fight back inflation, TSX stocks are a great way to accomplish this. But the best way is to stick to the tried and true methods of long-term investing.
Today, I’m going to look at three inflation-resistant TSX stocks — ones that have managed to push back inflation and recessions for years and that could create substantial wealth this year and all the way until retirement.
Industries that fight inflation
If you want TSX stocks that will fight inflation, it’s important to first look at industries that fight inflation. For that, you need to consider products or sectors that simply will continue running as usual, even in the face of inflation — things we need and simply cannot cut back on.
That becomes clear pretty quickly. Motley Fool investors have probably started looking at TSX stocks in sectors such as energy — things that power your home, businesses, hospitals, and more. While gas is a great option, I would caution that this is a volatile time to get into the industry. Instead, utilities might be another strong choice.
Another of the TSX stocks I would look at to fight inflation would be commodities. These are items used for everyday life as well, such as copper, silver, potash, steel-creating coal, and other items. And finally, real estate is a great way to bring in dividends, while also seeing long-term performance thanks to lease agreements.
Three TSX stocks to consider
The three best TSX stocks that fit into this inflation-fighting category to me are Teck Resources (TSX:TECK.B)(NYSE:TECK), Canadian Utilities (TSX:CU) and NorthWest Healthcare Properties REIT (TSX:NWH.UN).
Each of these inflation-fighting companies have histories of strong performance and great future outlooks. But right now, these will help fight inflation through a combination of solid dividend payouts and share growth.
Teck is a commodity producer that’s seen shares rise during this time of inflation. It recently reported its fourth consecutive quarter of record-setting earnings before interest, taxes, depreciation, and amortization (EBITDA), with commodity prices surging. It could be looking to increase its dividend as well as its increases its share buybacks.
Canadian Utilities is a solid choice, as it’s the only Dividend King among TSX stocks with 50 years of consecutive dividend growth. It fights inflation through providing energy through both gas and electricity and creating partnerships to build new power plants.
Finally, NorthWest doesn’t have the history of the other two. However, it’s a real estate company in the incredibly stable industry of healthcare. No matter what, we need hospitals, healthcare facilities, administration, and even parking. And this company offers those things around the world, as the company continues to expand its global footprint.
Create income now and for life
Let’s say Motley Fool investors invested $10,000 in each of these TSX stocks right now. This alone would bring in passive income of $1,178 this year! But let’s say you held them each for another decade and reinvested dividends. Based on historical performance, you could have a portfolio worth $63,539 from your $30,000 investment.
Before you consider Teck Resources, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2022 ... and Teck Resources wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 27 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 8/8/22
Fool contributor Amy Legate-Wolfe has positions in NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.