When inflation shows up, most investors reach for the same playbook: oil, metals, maybe some real estate. Sometimes that works. Sometimes it doesn’t.
But there’s a quieter group of companies that don’t fight inflation…they simply pass it along.
These businesses aren’t selling raw materials. They’re selling access, services, software, or infrastructure under contracts that adjust automatically as prices rise. In many cases, inflation doesn’t squeeze margins at all. It expands them.
Think toll roads instead of asphalt. Think usage-based pricing instead of fixed costs. Think contracts written so higher prices upstream mean higher revenue downstream.
What makes these companies especially interesting is how often they get overlooked. They don’t scream “inflation hedge” in a headline. Yet quarter after quarter, they keep hitting numbers, even when costs are rising everywhere else.
Today’s issue highlights 2 stocks that fit this exact profile. Both operate in massive, essential markets. Both have business models designed to absorb inflation, not suffer from it. And both continue to benefit as higher prices work their way through the system.
Mastercard Incorporated (NYSE: MA)
Mastercard Incorporated is a leading technology company in the payments industry that provides payment processing solutions to businesses and consumers worldwide. Mastercard is one of the largest payment processors in the world by market cap and the number of payments processed.
What makes Mastercard especially interesting in an inflationary environment is how little it has to do to benefit. The company doesn’t take credit risk, carry inventory, or worry about input costs the way most businesses do. It simply takes a small cut of every transaction that runs across its network.
When prices rise, the dollar value of those transactions rises too. A $50 purchase becoming a $60 purchase doesn’t change consumer behavior much…but it does increase the fees Mastercard collects. That’s built-in operating leverage, and it works quietly in the background without requiring higher volumes or aggressive price hikes.
Add in the long-term shift away from cash, the growth of digital payments globally, and Mastercard’s exposure to cross-border transactions, which tend to carry higher fees, and you get a business model that doesn’t just survive inflation. It steadily compounds through it.
The average twelve-month price target among the 29 analysts covering the stock is $661.24, which represents a forecasted upside of 25.34% from the current share price.
Waste Management, Inc. (NYSE: WM)
Waste Management, Inc. (NYSE: WM) provides environmental solutions to residential, commercial, industrial, and municipal customers.
It offers collection services, including picking up and transporting waste and recyclable materials from where it was generated to a transfer station, recovery facility, or disposal site.
The company also owns and operates transfer stations, as well as owns, develops, and operates landfill facilities that produce landfill gas used as renewable natural gas for generating electricity.
What makes Waste Management such a reliable inflation beneficiary is the way its contracts are structured. Many municipal and commercial agreements include built-in price escalators tied to fuel, labor, and general cost inflation. When costs rise, Waste Management doesn’t eat them…it passes them through.
Just as important, this is a business customers can’t walk away from. Trash still needs to be picked up in good times and bad, and the high barriers to entry in landfill ownership limit competition.
That combination of steady demand, limited supply, and pricing power allows Waste Management to protect margins even when inflation pressures most other businesses.
According to the 30 Wall Street analysts’ consensus price targets for WM, the average price target of $250.23 per share represents a forecasted potential upside of 10.56% from the current share price.