The Polymetal International (LSE: POLY) share price closed at 95p on Tuesday. As I write on Wednesday morning, shares in this Russian gold miner are up by over 40% at 132p.

Polymetal issued a statement this morning saying it doesn’t expect to be affected by the current sanctions against Russia. I think this is why the share price is rising. In this piece, I’ll explain more and reveal whether I’d buy the shares now.

Not a Russian company?

UK sanctions are targeting companies that are controlled by Russians and have a presence in the UK. London-listed Polymetal owns gold and silver mines in Russia and Kazakhstan. But today’s statement indicates that the company is not controlled by Russian shareholders.

Polymetal’s largest shareholder is ICT Holding Ltd, a company incorporated in Cyprus. ICT Holding holds 23.9% of Polymetal shares. ICT Holding is owned by another Cyprus company, in which Polymetal founder Alexander Nesis  has a 47.3% shareholding. According to Polymetal, Nesis is a Swiss resident with citizenship of Israel, Malta, and Russia.

The next largest shareholder is US asset management giant Blackrock, with a 10.1% stake.

Nesis’ brother, Vitaly, is chief executive of Polymetal. However, he does not appear to have a major shareholding. In total, Polymetal says ICT and other insiders own less than 25% of the group’s shares.

As a result, the company says it does not believe it should be affected by current UK sanctions. I think this is one of the reasons why the Polymetal share price is bouncing back today.

Dividend at risk?

Polymetal says all of its mines are operating without disruption. Most exports are continuing as normal. Some operations in Russia have been adjusted to comply with sanctions.

I think the company’s mines will be able to keep operating. What worries me are the financial risks for UK shareholders. If I buy shares in Polymetal International, I’m investing in the group’s Channel Islands holding company.

When Polymetal pays a dividend to UK shareholders, it is effectively passing on dividends it has received from operating companies in Russia and Kazakhstan. Polymetal’s management says there’s a risk that future dividends from Russian subsidiaries could be blocked by sanctions.

The company plans to pay the final dividend for last year, but says it may reconsider the dividend ahead of the AGM if needed.

On balance, I think there’s a high risk that future dividends to UK shareholders will be cut, or suspended.

Polymetal share price: what I’m doing

I think it’s possible Polymetal shares are extremely cheap and could bring me huge returns. But I think it’s more likely that the shares will fall again and will eventually be delisted or suspended from trading in London.

Although today’s statement on sanctions and the company’s ownership seems reassuring, my feeling is that the situation is still very risky.

I think it’s worth remembering that Polymetal shares are still down by 90% this year. In addition, six of Polymetal’s non-Russian directors resigned at the end of last week.

For me, buying Polymetal shares today would be a gamble on geopolitical risks that are outside my control. For this reason, I won’t be buying Polymetal shares for the foreseeable future, regardless of what happens to the share price.

Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In times of social, economic and political crises, safe-haven assets like gold come into their own. And as we saw at the height of Covid-19 — a time when gold hit its current record highs around $2,070 per ounce — precious metals stocks can also rise strongly when market confidence sinks.

Prices of these valuable commodities have soared again following Russia’s invasion of Ukraine. Gold is volatile, given the fluid geopolitical situation, and came within fresh all-time highs in recent hours. It’s fallen back, but at $2,010 is within striking range of current peaks. The yellow metal is now 11% more expensive than it was at the start of 2022.

Silver prices, meanwhile, have risen 13% in value since the turn of the year to current levels around $26.30 per ounce. And palladium (up 50% so far in 2022) recently soared to new all-time highs above $3,000 an ounce. Could now be the time for me to buy some precious metal stocks?

Precious metals stocks soar!

Palladium’s rise has been particularly strong as Russia is a major supplier of the metal. Mining companies like Norilsk Nickel help supply 40% of the world’s palladium, a critical material for building automobiles. Prices have leapt as traders and investors consider the impact of sanctions on Moscow to metal supplies.

This has helped certain precious metals stocks to soar in value too. Sylvania Platinum’s share price, for example, recently closed at its most expensive since last summer. And fellow South African platinum group metal (PGM) producer Tharisa has just leapt to all-time highs.

Sanctions raise inflation worries

There are few events to scare investors like war. And the tragic events in Ukraine throw up a range of possibilities that could have a significant impact on the macroeconomic and geopolitical landscape. A prolonged conflict means trade-damaging sanctions could remain slapped on Russia for the foreseeable future. More worrying is the possibility of a large-scale (and potentially nuclear) conflict that would have wide-reaching catastrophic consequences.

Russian sanctions are also having a significant impact on precious metals prices by supercharging inflation. Prices of commodities like oil and wheat are soaring and there’s the possibility of further meaty gains. Plans to ban Russian oil and gas for example could spread following the US’s ruling to stop such imports yesterday.

Gold to hit $3,000?

Of course asset prices can go up as well as down. And in the case of precious metals, prices could fall if central banks ramp up rate increases to combat ballooning inflation. A resurgent US dollar could also hit metal prices hard. This is because gold et al are predominantly traded in dollars, meaning they become more expensive to buy when the greenback rises.

However, it’s my opinion that gold prices still have plenty of room for further gains. I’m not alone in my bullishness however. Goldman Sachs now thinks bullion prices will hit $2,500 per ounce by the end of the year. And analysts at TD Securities have suggested $3,000 is a realistic target too. So I think now remains a great time to buy precious metal stocks.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Dividends earned from shares are one of my favourite passive income streams. Once I buy the shares, I can sit back and earn money from any dividends the stocks I hold pay.

When there is a market correction, I can use it as an opportunity to boost my returns. Here is how I would do it.

The concept of yield

First I think it is helpful to understand that investors talk about dividends in two ways.

There is the absolute amount of a dividend. For example, Reckitt currently pays an annual dividend of approximately £1.75 per share. So, if I buy one share of Reckitt I would expect to earn £1.75 of passive income from it per year, as long as the company does not change its dividend.

For other companies, the payout amount can be higher or lower, but that is where it gets complicated. The Reckitt share price is very different to, say, that of its rival Unilever. So simply comparing their two dividend amounts would not help me understand which share offers me more income for my investment. That is because I would need to spend more money to buy a share of Reckitt than Unilever. To make it easier to compare, investors use the concept of dividend yield. That is basically the dividend as a percentage of a share’s current cost.

For example, Reckitt’s yield is 3.05%. So if I invested £1,000 in it, I would expect £30.50 of dividends per year. Unilever’s yield of 4.33% is higher. So, if I put my £1,000 into Unilever instead of Reckitt, I would hopefully receive £43.30 of dividends per year. Unilever’s higher yield offers me a larger return.

How yield can affect passive income streams

Crucially, yield is calculated using the company’s dividend and its share price. The lower a share price, the higher the yield a share will offer. So, if a market correction pushes share prices down, I can hopefully get a higher yield even from the same shares for the same investment.

A year ago Unilever’s yield was 3.8%. The Unilever share price has fallen 13% in the past year, so it now yields almost 4.4%. Simply by spending the same amount of money on the same shares when their prices are lower, I can generate higher passive income streams.

Focus on quality not timing

It can be hard to time the market so I do not try to do it. But, if I have identified a company that I think offers me attractive income prospects, seeing its share price fall could make it even more appealing to me.

For example, at one point last month Imperial Brands was yielding 7.7%. I already find that attractive. Indeed,  I own Imperial for its passive income potential. But after sliding 16% in recent weeks, Imperial now yields 9.1%. That may sound like a small difference. But buying Imperial today when it yields 9.1% would offer me 18% more passive income compared to buying it last month when it was yielding 7.7%.

There are risks. A sliding share price could suggest investors feel that Imperial’s business may see declining profits. That could hurt its ability to pay a dividend. But overall, a market correction can offer me the chance to buy income shares I already want to own, at a lower price than before. That can translate into higher yields – and bigger passive income streams.

Christopher Ruane owns shares in Imperial Brands and Unilever. The Motley Fool UK has recommended Imperial Brands, Reckitt plc, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Are UK banking shares presenting us with an opportunity or a warning?

Anyone watching the markets will have noticed the recent declines in UK banking shares after they’d risen in the past year. For example, at 484p, HSBC Holdings is down around 17% since February and up around 8% over the past year. At 45p, Lloyds Banking Group has also fallen by about 17% since February and is up by 10% over a year. And at 161p, Barclays is 18% lower since February and also down 7% over the past 12 months.

Bank stocks can be first-movers

The obvious catalyst for the recent falls was the escalation of hostilities in Ukraine And, in fairness, most banking stocks are showing strong bounces today as I write (10.30 am on Wednesday, 9 March). And I’d expect some bounce-back if the news flowing from Eastern Europe shows any signs of improvement in the situation. So, perhaps banking stocks are trying to tell us something now.

I see the possibility of de-escalation of violence in Ukraine as a potential positive short-term driver for bank shares. After all, banking stocks as a group are known to be among the first movers when it comes to impending changes in the macroeconomic and geopolitical landscape. They can be very responsive and first off the blocks.

But on the bear side of the equation, perhaps the big recent move lower in banking stocks is trying to signal longer-term economic trouble ahead. Commodity prices have shot up because of the situation in Eastern Europe. And that looks set to drive general price inflation even higher. But Inflation was already surging before the war because of the after-effects of the pandemic.

If inflation rises too much and too soon, it could choke off the world’s economic growth and ongoing recovery from the pandemic. And if we see another recession, I reckon banking stocks will be the first to indicate the possibility by moving lower.

A complex situation

However, higher inflation encourages central banks to raise base interest rates in an effort to fight rising prices. And that sometimes works because higher interest rates can slow down economic activity and thus apply a braking force to inflation. Meanwhile, higher interest rates can be good for the profits of banking businesses — but not if higher rates cause a general economic slump!

The situation is complex and almost impossible to reliably predict. But I do know that banking stocks are perhaps the most cyclical shares in which we can invest. Looking at most banks’ 20-year financial and trading records reveals see-sawing share prices, fluctuating profits and famine-or-feast shareholder dividend payments.

And for that reason, I’d never try to make a bank stock a long-term holding in my portfolio. The most likely outcome of an approach like that, I feel, would be regular visits back to my starting point. However, it’s worth me investing in bank shares on a shorter-term basis to catch the up-legs in each cycle. However, timing investments like that is fraught with difficulty. And I’m having such difficulty right now!

That said, I’d be inclined to become interested in researching bank stocks when their share prices present us with a low point in their cycles. Perhaps that moment is now.

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays, HSBC Holdings, and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Just like buses, you wait ages for a bid – and then more than one comes along. Last year, bus and coach operator Stagecoach (LSE: SGC) announced plans to merge with UK rival National Express. But that deal now seems to be off the cards as the Perth-based company has announced that it is recommending an offer by the Germany-based investor DWS Infrastructure. The Stagecoach share price soared 37% this morning, to sit around the £1.05 per share price of the new bid.

What this means for shareholders

For shareholders who want to sell their shares now, this might be profitable depending on when they bought their holding. For example, since I chose Stagecoach as my best British stock for October, the share price has increased 22%.

But in the months between then and now, the shares have moved around a lot – as has been the case for many years. So selling at £1.05 would mean that many shareholders would end up losing money on their holding. It is around 35% lower than the price at which the shares entered 2020, before the pandemic took hold and bus usage plummeted.

If the bid is successful, such shareholders will have to sell their shares. The National Express deal, by contrast, was structured as a merger. So existing Stagecoach shareholders would have had the option to keep holding shares in the combined company in the hope of future business recovery.

Is the DWS Infrastructure bid on the cheap?

In that sense, it can be argued that the DWS bid is on the cheap. It takes advantage of the reduced Stagecoach share price that has resulted from the pandemic. If other bidders, either in the transport trade or in finance, think this is a lowball offer they may make their own bids. So there could still be upside from the current Stagecoach share price.

But in reality it has been a very difficult couple of years for Stagecoach. It has seen fewer passengers and there is a clear possibility that many former customers will not start taking buses with anywhere near their previous frequency. For example, many workers no longer need to commute daily. So although the latest bid for Stagecoach is far below its former share price, that could reflect the reality that its business value has likely fallen sharply over the past couple of years.

My move on the Stagecoach share price

The DWS bid would mean me booking a loss on my Stagecoach holding. I would have preferred to wait for the National Express merger, which I think offered better long-term value creation opportunities for Stagecoach shareholders.

That merger was not guaranteed, though. It could have fallen through due to monopoly concerns. I will not sell my Stagecoach shares just yet, even though they are already trading at the price of the proposed takeover, as I think another bidder may decide that DWS is trying to buy Stagecoach on the cheap and make a new bid. Another option is that National Express may raise its bid.

If that happens, it could push the Stagecoach share price up.

Christopher Ruane owns shares in Stagecoach. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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The global geopolitical environment is incredibly uncertain. I do not think this is going to change any time soon, and unfortunately, it also looks as if the outlook for the global economy is becoming worse by the day. Against this backdrop, it is difficult to find attractive investments. However, I believe Apple (NASDAQ: AAPL) shares have all the qualities required to navigate these uncertain times and produce attractive returns for investors at the same time. 

Competitive advantage

One of the reasons why I like Apple shares so much is the company’s sticky product base. As an iPhone user, I know how good the product is. I also know how difficult it is to move away from iPhones, although I am not in any rush to change. The product does everything I want and more. Switching to the latest model is seamless, and I do not have to worry about losing any of my data. 

The Apple ecosystem is also incredibly valuable. I can have all of my photos and data stored on the cloud, and accessible from anywhere in the world. 

I will admit that Apple products are far more expensive than its competitors. This is probably why the company is not the largest smartphone producer in the world. Cheaper, mass-market products have been able to capture a more significant share of the market, but the corporation stands in a league of its own. 

This ability to stand in a league of its own and get customers to pay a premium for its products is the primary reason why I think Apple shares are so attractive in the current environment. The group has a sticky customer base, which is likely to stay with the organisation for years. 

The firm also benefits from a recurring revenue stream. Customers can sign up for Apple products that charge a monthly fee. This provides ongoing revenues for the group, which could be extremely valuable in times of uncertainty. 

The risks facing Apple shares

Of course, the stock is not a risk-free investment. Consumers have been willing to pay a premium for its products up until this point, but that may not last forever. If the group significantly increases the cost of its iPhones, consumers might move elsewhere if the cost of living crisis continues to bite. Rising commodity prices could also put the company’s profit margins under pressure.

These are the biggest risks and challenges the corporation will have to overcome going forward. 

Despite these potential challenges, I think Apple shares remain an attractive investment for the next decade. That is why I would buy the stock for my portfolio today. In an uncertain environment, I think the company’s competitive advantages will help it navigate the challenges ahead. Many other businesses just do not possess this kind of edge. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I have written about AFC Energy (LSE: AFC) several times in the past. This company remains my favourite hydrogen share to buy today, considering its technological progress, and growth prospects. 

The company’s results for the year ended October 2021, illustrate the headway the group has made over the past couple of years. 

According to the results, which were published today, the company now has £5m worth of contracted commercial agreements. It received its first commercial revenue from its partnership with the Extreme E Season 1 Championship. This contract has been renewed for 2022. 

It has also signed several other agreements to commercialise its products further and take its hydrogen power generation systems into the mainstream. 

The top hydrogen share to buy

AFC’s contract with Extreme E illustrates what the business is capable of doing. In Extreme E, electric vehicles race on off-terrain courses. These vehicles need charging, and they have been using AFC’s technology. The company has developed a hydrogen-generation facility that uses the sun’s power to create green hydrogen. This can then be used to generate electricity and recharge batteries. 

As well as the electric vehicle market, the group is also targeting the maritime market. And management is looking to deploy the company’s technology across UK construction sites. The organisation reports that following the removal of the red diesel subsidy, demand from the construction sector has increased significantly. 

I think this is one of the best hydrogen shares to buy today because the company’s technology is starting to gain traction. Management believes the firm is in a leading position to replace diesel generators with its technology over the next 10 years. 

Funding required

And the corporation has the funding to do it. Following an oversubscribed placing last year, the outfit ended its 2021 financial year with a net cash balance of £55m. It has also been investing heavily in building out production facilities to meet potential demand. The company lost £10m for the year to the end of October 2021 as spending surged. 

These capital spending requirements illustrate the sort of challenges the firm will have to overcome in the years ahead. AFC will have to spend a lot of money to capture market share, and shareholders might have to foot the bill. If the market does not provide the funds required, the company’s dreams could come crashing back to earth. This is probably the most significant risk hanging over the stock right now. If it runs out of money, the enterprise could fail before it has a chance to grow. 

Despite this risk, AFC remains my favourite hydrogen stock on the market at the moment. It has a tangible product that is attracting consumers’ attention. If management can capitalise on this growth potential over the next few years, I think the group could be a great speculative investment. That is why I would buy the stock for my portfolio today. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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