While there is talk that interest rate rises will come to an end pretty soon, investors must not forget that inflation is still raging uncomfortably high.
The annual rise in the consumer price index may have passed the peak, but as it stands Australia is still suffering from 7% annual inflation in quarterly measurements, or 5.6% according to monthly numbers.
Either way that's still well in excess of the 2% to 3% target range the Reserve Bank of Australia feels comfortable with.
So it's going to take a while to get that beast tamed. It could take years.
In such circumstances, it could be wise for investors to consider buying S&P/ASX 200 Index (ASX: XJO) shares for businesses that have the ability to raise prices without scaring off customers.
Here are two such suggestions from the analysts at IML Australian Share Fund:
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Repricing improving margins
Suncorp Group Limited (ASX: SUN) is currently trying to refocus back towards its main game of providing insurance. A proposal to sell its banking arm to ANZ Group Holdings Ltd (ASX: ANZ) is currently in the hands of regulators.
The Suncorp share price nevertheless rocketed 11% last quarter, as the market appreciated the power of the insurance industry in turbulent times.
"Suncorp's insurance premiums are growing in the mid to high single digits, and inflation and supply chain pressures on motor and home insurance claims are showing signs of abating," IML analysts said in a memo to clients.
"It is improving its margins by repricing, as well as higher investment earnings."
There could also be a nice bonus around the corner for investors willing to buy Suncorp shares now.
"If the bank sale is approved, Suncorp will be [in] a position to return capital to shareholders."
There is absolute agreement among IML's peers.
According to CMC Markets, incredibly all 11 analysts that cover Suncorp currently rate the stock as a buy. Among those, 10 think it's a strong buy.
Market starting to appreciate this Queensland company
Aurizon Holdings Ltd (ASX: AZJ) has several tailwinds going for it at the moment, resulting in its shares soaring 17% over the three months to 30 June.
The IML team attributed this to far better weather this year that's allowed larger coal volumes to be carried on its freight trains.
That's about to combine with a mouthwatering price rise opportunity.
"Secondly, Aurizon's Queensland rail network is entering a new regulatory period, which will reset the value of this asset as well as the return that Aurizon is allowed to earn on it," read the IML memo.
"Given recent high rates of inflation and bond yields both are set to rise meaningfully, and the market has started appreciating this dynamic."
While not as unanimous as Suncorp, Aurizon has its share of bulls in the professional community.
Currently seven out of 13 analysts surveyed on CMC Markets reckon the infrastructure stock is a buy.
