GDP report points to dreaded stagflation, but these stocks can still work in this environment

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Investors may want to prepare themselves for stagflation after Thursday's first quarter GDP report showed lackluster economic growth and high inflation.

Investors may want to position themselves for a stagflationary environment after Thursday's gross domestic product reading for the first quarter showed lackluster economic growth and high inflation. First-quarter growth came in at a 1.1% annualized pace, much slower than the 2% growth expected by economists polled by Dow Jones. Data inside the report showed the personal consumption expenditures price index, an inflation measure that the Federal Reserve closely follows, increased 4.

With most economists expecting the economic picture to darken further in the second half, what's an investor to do? It's hard to go all the way back to the 1970s and get a good look at which stocks performed well then because Corporate America and the U.S. economy have changed so much since then. But it's a reasonable bet that certain stocks with pricing power and resilient revenue sources could outperform in this kind of environment.

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