2 Ultra-High-Yield Dividend Stocks to Buy as a Hedge Against Inflation

Inflation is almost certainly going to be a central theme for investors in 2022. By the end of October, the Consumer Price Index (CPI) was up by a whopping 6.2% for the year, according to a report from the U.S. Bureau of Labor Statistics. That's the largest increase in the CPI in more than three decades. Moreover, core inflation, which is a less volatile metric than CPI as it excludes food and energy prices, was also up by an unsightly 4.6% for the year at the close of October. Core inflationary rates haven't been that high since 1991.

How can investors protect their portfolios from this surge in inflation? While no single strategy is sufficient to guard your portfolio from the threat of rising prices, investors should consider owning a few stocks that offer dividends with yields that are either greater than the anticipated rise in the cost of goods and services or at least keep pace with inflation rates over the next 12 months. The problem with this approach, though, is that the vast majority of stocks with annualized dividends of 6% or higher simply aren't worth owning. Companies with ultra-high yields, after all, tend to have serious underlying problems.

Icahn Enterprises (NASDAQ: IEP) and Takeda Pharmaceutical (NYSE: TAK) are two of the few exceptions to this general rule of thumb. Here's why these two ultra-high-yield dividend stocks might be worth owning as a hedge against inflation in 2022.

Source Fool.com