The specter of escalating inflation is rearing its ugly head, and that's not good news for investors. Consumer prices in June surged by the most since 2008, further strengthening a case for the Federal Reserve to hike interest rates earlier than anticipated. If that happens, equity values will decline and investors will move their funds from high-growth stocks to safe havens such as government bonds. For equity investors, dividend stocks that raise their payouts faster than the rate of inflation are one effective avenue to consider.
Keeping this theme in mind, below we've short-listed three stocks that income investors could consider buying now. Each stock not only offers the potential for strong capital gains, but also has provided substantial payout raises each year to counter the impact of higher prices. The U.S. home improvement giant Home Depot (NYSE:HD) has a remarkable track record of boosting its payout much more quickly than the rate of inflation. The global coffee-chain operator Starbucks (NASDAQ:SBUX) is another suitable candidate for earning growing dividends each year while also investing in a top-rated consumer stock. As the provider of the Windows operating system and Office software, Microsoft (NASDAQ:MSFT) certainly fits the bill.
Source: Investing.com
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