The last few years have seen IAG (LSE: IAG) suffer as global travel was halted due to the pandemic. The stock’s price slumped over 60% in 2020, and it wasn’t alone in its struggles as practically all airline stocks took a beating during the turbulent period. However, as borders slowly began to reopen, and life started to return to (almost) normal, the IAG share price had been gradually creeping up in 2022.

Its fortunes changed when news emerged late last week that Russia had invaded Ukraine. The market’s response led to a 6.3% drop in the price on Thursday.

However, with the stock currently changing hands at around 148p — a slither of the 400p price we saw pre-pandemic — is now a good time for me to be adding IAG shares to my portfolio? Let’s take a look.

The reopening of borders

A major boost for IAG will be the recent reopening of borders around the world. As more and more countries have eased the restrictions placed on international passengers, this should allow the firm to see an increase in passengers over the coming months. Further, some countries have lifted restrictions altogether, for instance, Sweden and Spain. And the benefits they reap from doing so may entice other countries to follow suit. According to the International Air Transport Association, around 3.4bn people will fly in 2022 – nearly double that of 2020. As such, this makes me believe buying IAG shares at the current price could be a steal.

Further, and as my colleague Andrew Woods stated, IAG may benefit more than competitors when it comes to the increased travel we should begin to see. This is because, unlike EasyJet and Wizz Air that focus on short-haul flights, IAG also operates transatlantic routes – estimated to be worth $1bn annually to the firm.

IAG also released its full-year results last week. And the numbers were encouraging. While revenues were up 8.3%, its post-tax loss had declined by 57.7%. When considering buying the shares, these numbers do sway me.

The risks

There are risks, however. The most obvious threat to IAG remains the pandemic. While it seems that the worst of it is over, there’s still potential for it to cause disruption in the future. Any sign of this would most definitely mean a drop in the price of IAG shares. With this said, Boris Johnson recently announced that the legal requirement to self-isolate due to a positive case has ended, showing further how the UK is taking strides to move away from the pandemic. This will provide a boost for the business.

My verdict

So, while a threat linked to the pandemic remains, I’m optimistic about what the future holds for IAG. The firm will see big benefits from the increase in passenger volume this year, and trading for well below half of the pre-pandemic levels I think IAG could be a solid buy. Its full-year results also provide me with confidence. As such, I would be willing to add IAG shares to my portfolio today.

Charlie Keough 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.

NIO (NYSE: NIO) shares have had a bumpy ride over the past few months. In fact, just last week they fell over 16%, finishing the week at a little above $20. For context, this time last year they were trading around the $50 mark. Although the situation looks bleak, I do think there is some long-term value in NIO stock. However, would I buy it today? Let’s take a closer look.

Encouraging fundamentals

The primary reason I see value in NIO stock is its high growth. In its January delivery update, the firm announced it had delivered 9,652 vehicles, up 33.6% from the year before. What’s more, total deliveries for 2021 were up over 109% from 2020. The high growth that the firm has been able to sustain really fills me with confidence. If this trajectory is kept up, I think NIO will inevitably rise in the future.

NIO shares are currently trading with of a price-to-book (P/B) ratio of 9.6 and a price-to-sales (P/S) ratio of 6.8. For comparison, industry leader Tesla’s P/B ratio is 29 and its P/S is 17. To me this highlights the value of NIO at current, especially considering its high year-on-year growth. The firm is set to release its fourth-quarter results on March 7. If it contains more high growth metrics, I expect the shares to jump upward.

Headwinds for the shares

Perhaps the most pressing concern NIO is facing is the Russia-Ukraine conflict, and the uncertainty this has created across the globe. Events like this have a wide-reaching impact on investor sentiment and so produce volatile markets. This is the last thing the NIO share price needs right now.

The state of the broader macroeconomy also seems to be against it. Higher government spending coupled with supply shortages — both induced by the pandemic — have led to rising inflation around the globe. The way that central banks tackle this is by hiking their interest rates. As a general rule, when rates rise, stocks take a hit. High-growth stocks like NIO are often hit the hardest. Needless to say, this is bad news for the Chinese EV manufacturer.

A final risk I see for the shares is the heavily competitive EV landscape. Well-established firms such as General Motors and Ford have set aside billions in R&D for EV production over the next couple of years. In addition to this, competitors such as Li Auto and Xpeng more than doubled their sales in January, highlighting the high growth of NIO’s competition.

The Verdict

Overall, I think NIO shares do offer me the chance for long-term growth. However, there are some serious short-term headwinds the firm is yet to overcome. Although I have owned NIO shares for some time now, I would like to wait until at least the March results are released before considering adding more shares to my portfolio.

Dylan Hood owns shares in NIO Inc. The Motley Fool UK has recommended Tesla. 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.

Right now, it’s a good time to be a ‘value’ investor. After years of underperformance, value stocks appear to be making a huge comeback.

Here, I’m going to highlight two cheap UK value stocks that pay dividends. Given their low valuations and attractive yields, I’d be comfortable buying both of these shares for my portfolio today.

Dirt-cheap value stocks

Let’s start with FTSE 100 company BAE Systems (LSE: BA), which is Europe’s largest defence company. It currently has a forward-looking price-to-earnings (P/E) ratio of 13, well below the median FTSE 100 P/E ratio of 16.

BAE’s full-year 2021 results, published last week, showed that the company is doing pretty well. For the year, sales increased by 5% to £21.3bn. Meanwhile, underlying earnings per share increased by 12% on a constant currency basis to 47.8p.

On the back of these results, the group declared a final dividend of 15.2p per share, taking the total for 2021 to 25.1p per share. That represents a 6% increase on the dividend declared for 2020, and a yield of about 4% at the current share price.

Looking ahead, management was optimistic about the future, saying it expects to continue generating growth.

“Our diverse portfolio, together with our focus on programme execution, cash generation and efficiencies, is helping us to navigate the challenging operating environment, meaning we are well positioned for sustained top line and margin growth in the coming years,” said CEO Charles Woodburn.

This leads me to believe that this value stock could climb from its current level.

A risk here is that defence budgets could be cut, impacting the group’s revenues and profits. However, given the high level of geopolitical tension globally, I think this is unlikely in the near term.

Big dividends on offer

Another value stock I like the look of right now is Schroders (LSE: SDRC). It’s a leading asset manager that operates across the UK, Europe, US, Asia, Middle East and Africa, and manages around £700bn for its clients. Its non-voting shares currently trade at around eight times this year’s forecast earnings. That’s a bargain valuation, to my mind. 

There are several reasons I like Schroders. One is that the group is big on ESG (environmental, social, and governance). Last year, it announced that it had integrated ESG factors into decision-making across all investments the firm manages. This positions the group well for the future. 

Another is that the group has made a move into private assets. I see this is a great decision as I expect demand for alternative investments to be high in the years ahead, due to the fact interest rates are so low.

Additionally, there’s a very nice dividend yield here. At present, the yield is around 6.5%.

Now it’s worth pointing out that the asset management industry is highly competitive. Right now, Schroders is facing intense competition from the likes of iShares, Vanguard, and Fidelity. This adds risk. A stock market meltdown is another risk to consider. This could impact the group’s revenues.

With the stock currently trading at such a low valuation however, I think the overall risk/reward proposition here is attractive.

Edward Sheldon has no position in any of the shares mentioned. The Motley Fool UK has recommended Schroders (Non-Voting). 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.

Polymetal International (LSE:POLY) investors woke up this morning understandably horrified to see the share price has crashed by over 50%! Typically, such volatility is triggered by an unpleasant company announcement. Yet today, the firm has so far been silent.

So what’s going on? Let’s explore.

The crashing Polymetal share price

As a reminder, Polymetal primarily mines for gold, silver and copper. And looking at its recently released fourth-quarter results, the group has been making steady progress in recovering from the impact of Covid-19. 

While revenue remained flat, the increased prices significantly contributed to expanding free cash flow. And, subsequently, the net debt position has improved. What’s more, the December delays in silver sales are expected to come in this year, resulting in a significant boost to 2022 half-year revenue.

Yet despite these encouraging results from only a month ago, shareholders are still dumping the stock for one simple reason. All of Polymetal’s assets are located in Russia and Kazakhstan. With the ongoing geopolitical situation in Ukraine, Western nations have begun placing sanctions against Russia. And there is an understandable fear that these will significantly disrupt the firm’s operations.

With that in mind, I’m not surprised to see the Polymetal share price take a hit. But what happened over the weekend that has investors so worried?

Investigating the problem

Last week, management told shareholders that current sanctions have not affected the group’s operations. That’s obviously a reassuring statement. Yet it doesn’t seem to have calmed any nerves.

There are undoubtedly a lot of contributing factors at play. In last week’s statement, the company warned that more severe sanctions could be put into place should the Ukrainian situation escalate. And over the weekend, that’s precisely what’s happened. Russian banks have been cut off from the Swift international payment network. That means moving money in and out of the country will be rather tricky.

Why does that affect the Polymetal share price? Directly, it doesn’t. Indirectly, it’s potentially a massive problem. Mining is expensive, and developing a new extraction site requires a lot of funding that Polymetal has historically secured through bank loans. But with the Russian banking system now cut off from its international partners, securing additional capital no longer appears to be a viable strategy.

With additional bank funding practically evaporating, combined with rising fears of disruptions to resource exports, Polymetal and its share price could be in for a rough ride.

Taking a deep breath

As frustrating and worrying as things may be, it’s worth remembering that Polymetal still has nearly $300m (£224m) of cash reserves. That should be enough to keep the lights on for now. Meanwhile, Russia and Ukraine have agreed to enter talks, marking what could be the beginning of the end of this crisis.

Investors may be overreacting to recent developments. And today’s rapid sell-off in Polymetal’s share price has pushed the price-to-earnings ratio to a tiny 4.6. But as cheap as that seems, there remains a lot of unknowns. So, personally, I’m going to keep this business on my watchlist for now.

Zaven Boyrazian 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.

The Cineworld (LSE: CINE) share price has climbed 20% in 2022 so far. Today, I’m asking whether this momentum can be sustained into next month and beyond.

Recovery in revenue

I’m actually not expecting all that much in the way of surprises when it comes to Cineworld’s full-year numbers on 17 March. After all, only a few weeks have passed since the company last provided an update on trading. 

In January, the battered mid-cap said performance and attendances had “steadily grown” over the six months to the end of December. In July 2021, for example, total revenue was 50% of what it had been in 2019. By the last month of 2021, this percentage had improved to 88%. Much of this increase can be attributed to popular releases such as Spider-Man: No Way Home, No Time to Die and Black Widow.

What’s far more important however, is how the company has traded so far this year. 

Cineworld share price: going higher?

On a positive note, the gradual (now complete) removal of Covid-19 restrictions over recent months can only be a good thing. Throw in the half-term holidays (and inevitably shocking British weather) and I reckon trading over the last couple of months has probably been solid, albeit not spectacular.

The slate of upcoming movies is also promising. A positive reaction from critics and fans to the new Batman film, for example, could help lift the Cineworld share price in advance of results day. Later in the year, we can expect sequels such as Top Gun 2 and Jurassic Park: Dominion.

Perhaps most importantly, there’s also been speculation in recent weeks that Cineworld will negotiate a deal with Canadian rival Cineplex over the former’s aborted deal to buy the latter. Agreeing to lower damages would actually be in Cineplex’s best interests. This is because it would receive very little (if anything) in the event of the business going bust. Avoiding bankruptcy would probably do no harm to the Cineworld share price either.

Red flags

Of course, lots of very rational arguments against investing in Cineworld remain. These include the reduced window between movie release dates and the same films being made available on streaming platforms. In fact, the rise in the cost of living also makes a monthly subscription to the latter look even better value for money than a trip to the flicks. 

Even if a deal is done with Cineplex, I also have to ask myself whether I’d want to own a stake in a company with such a horrific balance sheet. To be frank, there are so many far more robust businesses to choose from in the UK market.

20% up, but…

While the recent momentum might be welcome for those already holding the stock, we need to keep things in perspective. The Cineworld share price is still down 60% in the last 12 months. In the last five years, the company’s value has tumbled 86%.

I don’t think this pessimism is unjustified. And while there are certainly reasons for thinking that the stock could continue rising in March and beyond, I’m still not inclined to get on board even if it does.

If that means me missing out on the mother of all recoveries, so be it. The potential returns aren’t worth the stress of the journey, in my opinion. 

Paul Summers 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.

Dividend stocks are shares in companies bought primarily for their dividend payments, issued to investors annually or more often. These payments can seem small at first, but by adding to my position and reinvesting my earnings, I plan to grow my portfolio over time and build a passive income stream.

Rental properties

The cost of renting a home in the UK continues to rise. Tenant prices increased by 2% in 2021, according to the Office for National Statistics. This was the fastest growth rate in the last five years. Given the still constricted number of available homes, I believe rental rates will continue to rise.

However, I would not invest in buy-to-let. Instead, I’d put my money into Residential Secure Income. Not only could this save me money in the long run, but it means I can avoid the upfront costs and workload that buy-to-let can involve. This UK stock is currently yielding a 4.8% dividend. There’s a risk that demand for rental homes could slow or even reverse as new homes are built. This could negatively affect the share price and hurt Residential Secure Income’s ability to pay a dividend. But UK house prices have risen at a surprisingly fast rate in recent months leading me to believe that it could be an investment I want to hold for 10 years.

An insurance company

The cost of Storm Eunice is expected to be around £350m. Massive damage has been inflicted by record winds and may eat into revenues of companies like Admiral Group (LSE: ADM), which is part of the FTSE 100. However, I still expect this income investment to pay out large dividends this year via an estimated 5.8% yield. As climate change continues to take hold over the coming years, extreme weather events will become more frequent. The need for insurance (as well as its cost) is likely to go up as a result. But this does pose a significant risk to insurance businesses too if they end up paying out more than they can take in in premiums.

Admiral has a strong balance sheet though, which should enable it to resist any big cost increases and continue to pay out large dividends to shareholders. According to the company’s most recent financials, its Solvency II ratio was at a huge 209% in June. Admiral, I believe, might also be a good long-term investment because of its quick expansion into new regions.

A 5.1% renewable energy dividend stock

Today, I’m also inclined to buy SSE (LSE: SSE), a FTSE 100 energy provider with a 5.1% dividend. As an income investor, I appreciate this type of dividend investment because of its critical position in energy production. This implies revenues will be stable regardless of the weather and allows SSE to pay out big dividends year after year.

SSE appeals to me as well because of its green energy focus. Oil may be more expensive than ever, but I see this as only a short-term state of affairs. The Ukraine crisis has caused fossil fuel prices to skyrocket. Governments in Europe should now be very aware of the massive security risk fossil fuel reliance represents. At the same time, renewable energy is growing cheaper and more efficient. Even if new Ofgem restrictions might stifle earnings growth in the future, I’d purchase SSE shares.

James Reynolds has no position in any of the shares mentioned. The Motley Fool UK has recommended Admiral 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.

Last week, Polymetal International (LSE:POLY) shares fell by 32%, to close the week at 792p. The week would have ended with an even worse performance, had it not been for a 17% rally in the share price on Friday as the FTSE 100 climbed. Clearly, such a large move in one week has to have some fundamental reasons behind it. The reasons for the move centered around the Russian invasion of Ukraine. 

Impact of potential sanctions

The first cause of the fall is linked to potential sanctions that might be imposed on Polymetal. In a statement, the company noted that “the scope and impact of these new potential sanctions (and any potential counter-sanctions) is yet unknown, however they might affect key Russian financial institutions as well as mining companies”.

Later it said it thought it unlikely Polymetal would face sanctions. However, its links to operations with mines in Russia and Kazakhstan have clearly worried some investors. As a miner, it’s in one of the sectors that are likely to be targeted. Therefore, the potential impact of sanctions is one clear reason for Polymetal shares slumping last week. 

It’s too early to say what kind of sanctions could be imposed. Yet the result of any of them is likely to damage revenues at Polymetal.

Operations of mines

Another cause for concern regarding the share price is whether operations will be able to continue as normal going forward. At present, the gold and silver mines haven’t been impacted, the company said. However, this might change as distribution routes out of Russia are likely to become more difficult.

To this end, Polymetal stated that “contingency planning has been initiated proactively to ensure business continuity, including selection of key equipment suppliers“. This is a positive. However the fact that this is needed in the first place is likely alarming for some investors. Ultimately, if the company isn’t able to access key suppliers and distributors, it’s going to slow down sales, which will hurt it further down the line.

Upcoming results are key for Polymetal shares

Finally, full-year results are due out for the business on Wednesday. The figures will be watched with interest and arguably, the outlook provided will be pivotal. Some investors might have been selling Polymetal shares last week in anticipation of these results.

The current situation in Eastern Europe could lead the company to revise lower its financial expectations versus 2021. This could lead the share price to move even lower, as investors factor in this lower bar for the year.

That’s despite the Q4 2021 results having made good overall reading. In the report, the company said that it “beat production guidance, maintained a solid safety track record, and paid record dividends.” It may have been that optimistic in January, but it will likely be hard to maintain such a tone in the next results report.

Jon Smith and The Motley Fool UK have 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.

It’s been a rough start to the week for the BP (LSE:BP) share price. The stock has taken a near-double-digit hit after management informed shareholders of its plans to cease its activities in Russia after 30 years, following the escalating geopolitical situation in Ukraine.

But what does this move mean for shareholders? And is this an opportunity for me to snatch up some shares at a discount? Let’s explore.

What’s going on with the BP share price?

Getting into the specifics, the company plans to exit its 19.75% stake in Rosneft, a state-owned Russian oil enterprise. Meanwhile, both current CEO Bernard Looney and former CEO Bob Dudley are resigning from the board of Rosneft with immediate effect.

With its role in Rosneft leadership now ended, BP’s accounting policies are about to change. As it can no longer report its interest in Rosneft as an equity account, the assets will now be reported at fair value until they are disposed of.

This move is expected to result in two primary non-cash charges in its upcoming 2022 first-quarter results. The first is an $11bn accumulation of foreign exchange losses built up since 2013. And the second is a $14bn cut in the carrying value of BP’s stake in Rosneft.

In other words, BP books are going to take a $25bn hit. So I’m not surprised to see the BP share price fall on this news.

How will this move affect BP shareholders?

Management believes this decision is “the right thing to do” and “also in the long-term interests of BP”. But in the short-term, it could be about to cause some problems. Rosneft represented half of the group’s oil and gas reserves and a third of its production in 2021.

Consequently, the elimination of this asset is expected to have a material effect on future performance. The firm’s underlying profit target for 2025 just got slashed by $2bn. Meanwhile, the income generated by Rosneft will no longer be contributing towards shareholder dividends.

That could spell problems ahead for the BP share price. But having said that, management believes the flexibility of its current financial position will enable the group to maintain the current level of payouts. As a result, it reiterated its guidance for dividends and share buybacks announced earlier this month, keeping its 4% dividend yield forecast until 2025. Whether this promise can be delivered, only time will tell.

What now?

The road ahead might be a bit bumpy for the BP share price. Due to the ongoing conflict, analysts at Hargreaves Lansdown expect the firm will struggle “to recover anywhere near what was considered to be the full value” of its investment into Rosneft.

Personally, I think this move will further accelerate the group’s plans to transition to renewables as it seeks to replace the lost income. As encouraging as that may be this is currently speculation, and there remain a lot of unknowns. So, for now, I’m going to stay on the sidelines and keep an eye on how this decision impacts the business moving forward.

Zaven Boyrazian 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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Market volatility has increased in recent days following the tragic events in Eastern Europe. There could be more choppiness ahead too as macroeconomic and geopolitical tensions persist. Still, there are plenty of top UK shares I’m thinking of buying following heavy falls in recent weeks and months. Here are three quality penny stocks on my wishlist for March.

Proton Motor Power Systems

The news flow coming out of Proton Motor Power Systems (LSE: PPS) has been highly encouraging in recent weeks. Yet this hasn’t prompted an improvement in the company’s share price so far (it remains 63% cheaper than at this time last year). I think the market has missed a trick here and would consider buying Proton today.

This penny stock manufactures stationary power units and fuel cells for cars, boats, and trains that utilise hydrogen technology. And earlier this month it announced it had made “a promising start to 2022” with €1.3m worth of orders booked so far. This adds to the €3.2m worth of orders Proton booked last year.

I think Proton Motor Power System’s profits could soar as the climate emergency drives demand for cleaner energy systems. Competition from alternative power sources remains a threat, of course, but I think the potential size of the hydrogen market still makes it a top stock for me to own. 

Creightons

Beauty and personal care product maker Creightons (LSE: CRL) remains 3% more expensive that it was 12 months ago. But the share price has plummeted around 50% from September’s record peaks as investors fear the impact of rising inflation on consumer spending.

This is a risk I need to consider, along with the possibility that demand for Creightons’ hand sanitiser could sink as the pandemic recedes. However, on balance I believe the penny stock is still an attractive investment target. I think demand for its skincare and healthcare products could rise strongly as people get out and about again following Covid-19 lockdowns.

I’m also encouraged by Creightons’ acquisition of the Emma Hardie and Brodie & Stone brands last year to strengthen its branded product ranges. The business has a cash-rich balance sheet which could help it hunt for more takeover targets as well.

Triple Point Social Housing REIT

The Triple Point Social Housing REIT (LSE: SOHO) share price has fallen 16% in value over the past year. This has consequently taken the company firmly into penny stock territory. As a long-term investor I think this weakness makes it an attractive dip buy.

Triple Point provides accommodation for individuals with special needs. This is a market which is tipped for strong growth — the London School of Economics has previously said that 200,000 new specialised supported housing units will be needed between 2015 and 2030. The business is highly active on the acquisition front to fully capitalise on this opportunity too.

Changing government policy regarding social housing funding could hit Triple Point’s profits hard. But as things stand today I believe the business remains a great stock to buy for solid long-term returns in my portfolio.

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.