Resistant to inflation stocks

Screening Filters

1. beta = LowRisk

• Purpose: Find stocks with lower market volatility.
• Rationale: Inflation-resistant stocks are often sought for their stability. Low-beta companies tend to hold up better when inflation is pressuring spending, rates, and valuations.

2. sector = Consumer Non-Cyclicals, Healthcare, Utilities, Industrial & Commercial Services

• Purpose: Focus on defensive sectors.
• Rationale: These sectors usually provide essential goods or services that people continue buying even when inflation reduces purchasing power. They generally have steadier demand and more resilient earnings.

3. industry = Food & Tobacco, Food & Drug Retailing, Pharmaceuticals, Healthcare Providers & Services, Healthcare Equipment & Supplies, Electric Utilities & IPPs, Multiline Utilities, Water & Related Utilities, Professional & Commercial Services

• Purpose: Narrow the search to industries with recurring demand and pricing power.
• Rationale:
  • Food & Tobacco / Food & Drug Retailing: Everyday necessities, so demand is less sensitive to inflation.
  • Pharmaceuticals / Healthcare Providers & Services / Healthcare Equipment & Supplies: Healthcare spending is typically non-discretionary.
  • Utilities: Water, electricity, and related services are essential and often regulated, giving them more predictable cash flows.
  • Professional & Commercial Services: Some firms in this group have long-term contracts or service-based revenue that can be more stable through inflationary periods.

4. region = US

• Purpose: Restrict the universe to U.S.-listed stocks.
• Rationale: This keeps the screen focused on U.S. equities, where inflation data, interest rates, and consumer behavior are most directly comparable and where investors often look for domestic inflation hedges.

5. gross_margin >= 40

• Purpose: Identify companies with strong pricing power and/or efficient business models.
• Rationale: High gross margins suggest the company may have room to absorb higher input costs or pass those costs on to customers, which is important during inflationary periods.

6. operating_margin >= 10

• Purpose: Ensure the business remains profitable after overhead and operating expenses.
• Rationale: Inflation can pressure labor, logistics, and SG&A costs. Firms with solid operating margins are better positioned to preserve profitability when costs rise.

7. current_ratio >= 1.5

• Purpose: Select companies with stronger short-term liquidity.
• Rationale: Inflation can tighten working capital and increase financing needs. A higher current ratio suggests the company is better equipped to meet near-term obligations without stress.

8. free_cash_flow_ttm >= 0

• Purpose: Filter for companies generating positive cash flow over the trailing twelve months.
• Rationale: Positive free cash flow is a key sign of financial resilience. Inflationary environments often punish cash-burning companies, while businesses that consistently generate cash are better able to maintain operations, invest, and return capital.

Why Results Match:

• Inflation-resistant stocks are typically defensive, essential, and financially strong.
• The screen emphasizes companies with stable demand (consumer staples, healthcare, utilities), lower volatility (low beta), and strong fundamentals (high margins, liquidity, positive free cash flow).
• Together, these filters help surface companies that are more likely to protect earnings and maintain performance when inflation erodes consumer spending and raises costs.