Inflation in Canada rose in February 2021 against the backdrop of rising gasoline prices. The Bank of Canada recently commented on what to expect in this regard in the coming months. The central bank’s inflation target is in the 1-3% range. In March, the BoC said it expects inflation to reach the upper limit of this target. The BoC conducted a survey to assess public support in its financial framework. We find that many Canadians feel that the 2% inflation target does not accurately represent inflation, as prices for many goods and services are rising consistently.Today I would like to see three TSX stocks ready Gain momentum Against the backdrop of price inflation.
The Canadian Food Price Report forecasts a 3-5% increase in 2021. The biggest increase was in meat and vegetables, which we predicted to increase from 4.5% to 6.5% over the previous year. This will put more pressure on the consumer base, which has already been exhausted after a year of pandemic restrictions and continued blockades.
This TSX stock started strongly in 2021
Metro (TSX: MRU) A grocery and pharmaceutical retailer based in Montreal. Its shares increased by 2% in 2021 at the time of the midnight trading on April 7. However, TSX shares are down 2.6% year-on-year.
The company announced its first quarter 2021 financial results on January 26th. Same-store sales increased 10% year-on-year. Adjusted net income increased 9.3% from the first quarter of 2020 to $ 197 million. Meanwhile, adjusted diluted net earnings per share increased 11% to $ 0.79. Metro raised its quarterly dividend to $ 0.25 per share, up 11% year-on-year. This represents a moderate yield of 1.7%.
Metro stocks finally had a favorable price-earnings ratio (P / E) of 18. A sharp rise in food prices could boost this TSX stock in the coming quarters.
Why this top grocery retailer is worth mentioning as inflation rises
Rob Lowe (TSX: L) that is Largest grocery retailer In Canada. Earlier this year, grocery retailers also talked about why it’s worth relying on market recessions. Loblaws and his associates have kept their doors open as an integral service during the devastating COVID-19 pandemic. This is another grocery retailer worth owning as inflation soars. The TSX stock has so far surged 11% in 2021.
Fourth-quarter 2020 sales were $ 12.4 billion, up 7.1% from the previous year. Same-store sales growth in food retail reached 8.6% and the market sector achieved strong growth of 10%. Adjusted EBITDA rose 5.0% to $ 1.26 billion. Meanwhile, adjusted net income was up 3.8% to $ 410 million.
Loblaws shares have a price-earnings ratio of 23, slightly above the industry average. It offers a quarterly dividend of $ 0.335 per share, equivalent to a yield of 1.8%.
Another TSX stock to buy in an inflationary environment
Empire Company (TSX: EMP.A) has made impressive revenues over the past year. This grocery retailer owns and operates brands such as Farm Boy, Sobeys and IGA. The share of this TSX share increased by 13% in 2021. The empire is up 38% year-on-year.
Same-store sales in the third quarter of 2021 increased 10% year-on-year, excluding fuel. As a result, e-commerce sales increased significantly to 315%. Gross profit increased nearly $ 590 million year-on-year to $ 5.4 billion. Sales increased $ 1.77 billion to $ 21.3 billion. Strong performance and rising food inflation helped the empire as it embarked on a growth initiative.
The attractive price-earnings ratio for TSX stocks is 15. Empire boasts a quarterly dividend of $ 0.13 per share. This corresponds to a yield of 1.2%.
There is another stock that could benefit from inflation …
You may want to hear this before considering Suncor Energy.
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This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment treatises, even our own, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content.
Three TSX stocks that can skyrocket as inflation rises
https://www.fool.ca/2021/04/07/3-tsx-stocks-that-could-soar-with-rising-inflation/ Three TSX stocks that can skyrocket as inflation rises