Inflation Is Heading to 3.5%: Yet These 2 Canadian Stocks Can Raise Prices and Keep Their Customers

Canadians do not need a spreadsheet to know that prices are on the rise.

They notice these trends at the pump and the grocery checkout.

Statistics Canada reported that consumer prices rose 3.1% year over year in September, up from 3.0% in August.

On October 28, the Bank of Canada raised its policy rate by a quarter point to 2.50%, its first hike since July 2023.

The central bank also expects inflation to reach about 3.5% by the end of 2026.

Moreover, the regulator does not see a return to its 2% target until mid-2028.

Given this macro backdrop, let’s see which companies are well positioned to pass higher costs to customers.

Why 3.5% inflation matters for Canadian investors The Bank of Canada says inflation excluding gasoline was 2.2% in September, and the core measure remains close to 2%.

However, the central bank says high fuel prices are lifting production and transportation costs, which have been primarily absorbed by businesses.

Notably, companies that do not enjoy pricing power have seen profit margins shrink over the last six months.

Here are two Canadian stocks that should perform well even during an inflationary environment.

Continue reading at the original source →