The "Trumpflation" Trade Could Get Worse Before It Gets Better. History Says These 2 Stocks Are the Place to Hide.
2026-10-07 02:15
•Reuben Gregg Brewer •The Motley Fool
••••••• •• Axe Cap view
Healthcare Stocks Offer Shelter Amid Inflation and Geopolitical Risks
Medtronic and Eli Lilly stand out as defensive plays with growth potential in a tough inflationary environment.
Inflation pressures aren’t going away anytime soon, especially with Middle East tensions pushing energy prices higher. For investors on the JSE, this means the rand could stay volatile, complicating exposure to global markets. Healthcare stocks like Medtronic and Eli Lilly, while US-listed, offer lessons relevant to South African investors seeking stability and growth. Medtronic’s turnaround and strong dividend track record mirror qualities found in firms like Aspen Pharmacare—steady cash flow and innovation matter. Eli Lilly’s leadership in GLP-1 drugs shows how expanding pipelines fuel growth even when broader markets wobble. For local eyes, the lesson is clear: seek companies with resilient business models and growing dividends as inflation bites. If rising costs hit these firms’ margins or geopolitical risks worsen unexpectedly, their defensive qualities might falter. Still, both represent solid anchors for a choppy global and local outlook. this is just our opinion and not financial advice
On the JSE, look to top-quality dividend payers in healthcare or consumer staples for defense—Aspen and Shoprite stand out. For direct global exposure, consider cautious USD/ZAR hedging if investing in US healthcare to mitigate rand swings.
- Aspen Pharmacare
- Shoprite
- USD/ZAR
- Worsening geopolitical tensions hit global supply chains
- Rand volatility erodes offshore investment returns
6/10
As inflation concerns persist amid Middle East geopolitical tensions and rising energy prices, healthcare stocks are positioned as defensive investments. Medtronic, a turnaround story with strong dividend history and accelerating growth, appeals to value investors. Eli Lilly, a GLP-1 drug leader expanding its pipeline, offers growth potential. Both companies benefit from healthcare's historical resilience to inflation.
Our take is based on reporting first published by The Motley Fool.