Inflation is continuing to climb, pushing investors into value stocks and cyclicals…
According to the U.S. Department of Labor, inflation surged to record levels in 2021. The Consumer Price Index (CPI), which monitors the prices of goods and services, rose to 7% from 2020.
While the month-over-month increase showed some signs of deceleration, that percentage marked inflation’s highest level since 1982.
The Labor Department noted that this was largely due to increased housing costs as well as vehicle prices. Over the course of 2021, the cost of living increased by 4.1% Meanwhile, vehicle costs jumped by 37%.
However, energy prices also played a major role, as they rose by 29% in 2021. And even though these numbers have since pulled back, they remain significantly elevated.
This has many analysts confident that we may be at the peak of inflation’s broader rise. Even so, it’s unlikely to decline anytime soon, as supply-chain disruptions, the global chip shortage, and other woes are anticipated to remain an issue throughout 2022, if not longer.
Because of these factors, many investors remain concerned about how they can maintain their wealth and protect their portfolios.
As a result, we’ve seen a transition to value stocks, safe-haven assets, and cyclicals – benefiting companies like Comcast (CMCSA) in the process…
Comcast is a multinational telecommunications company. And while it's best-known for its cable and internet services, it also operates in the cloud, mobile, and streaming sectors.
So, even though the adoption of streaming services has partially worn away some of the company’s cable and landline telephone subscribers, it has diversified enough to maintain its monopoly position in a variety of markets.
That’s because Comcast operates in areas of the U.S. where customers have few alternatives to its products…
And the ones that do exist don’t offer the same competitive pricing and services. These components have enabled Comcast to effectively become an essential company for many consumers across the country.
This makes it attractive as a value play, as it has the money and scale to maintain this dominant position. And the fact that it’s a stable, low-risk investment with a 2% dividend yield ensures that its long-term potential should remain in place as well.
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