"Trumpflation" Is Real -- and Getting Worse. Here Are 2 Stocks That Turn Rising Prices Into Rising Profits.

The latest Consumer Price Index showed prices 3.4% higher in July than a year ago, well above the Federal Reserve's 2% target. Energy prices jumped 14.7%, electricity rose 4.2%, and food increased 3%. Producer prices, meanwhile, remained 4.7% higher than a year ago.

The Congressional Budget Office has specifically concluded that the Trump administration's policies have contributed to current inflationary pressure. Indeed, changes to trade, tax, spending, and immigration policy have all affected prices, demand, and labor supply. But this isn't about why inflation is getting worse. It's about how to position your portfolio to actually benefit from "Trumpflation."

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There are several ways to build and protect your wealth during inflationary times: bonds, gold, and energy stocks. Here, I want to share with you two specific stocks that are actually positioned to benefit if prices continue to rise: pharmaceutical distributors McKesson (NYSE: MCK) and Cencora (NYSE: COR).

McKesson's inflation advantage

McKesson isn't a pharmaceutical manufacturer. It's responsible for moving enormous quantities of drugs from manufacturers to pharmacies, hospitals, and healthcare providers.

Here's where it gets interesting. Some of McKesson's distribution agreements contain inflation-based compensation provisions. Here's how they work: When manufacturers raise prices, McKesson can benefit because inventory purchased at the old price may subsequently be sold at the new, higher price.

McKesson explicitly warns that a reduction in the frequency or magnitude of manufacturer price increases could actually squeeze gross margins. In other words, certain types of inflation aren't necessarily a headwind.

McKesson generated $403.4 billion in revenue for the fiscal 2026 year ended March 31, up 12% from the previous year, while adjusted earnings per share increased 18% to $39.11. Its North American Pharmaceutical business alone produced $336.7 billion in revenue.

More recently, fiscal first-quarter 2027 revenue increased another 8% to $105.4 billion, while adjusted earnings per share (EPS) jumped 20% to $9.93. Management subsequently raised full-year adjusted EPS forecast to $44.20 to $45.00.

Of course, inflation isn't the only reason McKesson is growing. Specialty pharmaceuticals, oncology products, higher prescription volumes, and acquisitions are much bigger drivers. So in this case, you're not buying a stock solely because inflation is high. You're buying a growing healthcare business with contractual mechanisms that let it benefit from certain pharmaceutical price increases.

Cencora offers another way to play rising drug prices

Cencora also has an advantage when certain drug prices rise. Some of its distribution agreements include price-appreciation provisions, allowing the company to earn additional gross profit when manufacturers increase drug prices. The exact economics vary by contract, but Cencora acknowledges that slower or less frequent manufacturer price increases can hurt its results. In other words, while inflation narrows margins for a lot of businesses, certain types of drug price inflation can work in Cencora's favor.

Cencora moves hundreds of billions of dollars' worth of pharmaceuticals every year, generating $321.3 billion in revenue in fiscal 2025 (ended Sept. 25, 2025). Even modest price increases across that enormous distribution network can provide a revenue tailwind, while certain manufacturer price increases can also benefit gross profit.

This doesn't mean Trumpflation automatically translates into higher profits. Higher wages, transportation costs, and other expenses can still hurt margins. But unlike many businesses that must absorb rising prices or struggle to pass on them on to customers, Cencora has contractual mechanisms that allow certain pharmaceutical price increases to work in its favor.

In Q2, Cencora generated $78.4 billion in revenue, up 3.8%, while adjusted EPS increased 7.5% to $4.75. Management also raised full-year adjusted EPS projections to $17.65 to $17.90 and expects adjusted operating income to rise 12% to 14%.

Inflation protection without betting on inflation

Neither stock is a pure inflation hedge. Drug-pricing regulation can pressure pharmaceutical economics. Generic drug deflation can work against pharmaceuticals distributors. Tariffs themselves can raise operating and medical product costs rather than simply increasing profits. But that's what makes McKesson and Cencora interesting.

Both businesses process hundreds of billions of dollars in annual pharmaceutical sales. Both are producing solid earnings growth, and both have business models that can absorb, and in certain circumstances benefit from, higher drug prices.

If Trumpflation does persist, investors don't necessarily have to own commodities or gold to protect themselves. Sometimes the better opportunity is owning the companies that get paid while prices move higher.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends McKesson. The Motley Fool has a disclosure policy.