After a meteoric rise in 2020, the NIO (NYSE: NIO) share price has slumped 57% since then, with the stock currently down over 20% year-to-date. However, yesterday saw the Chinese electric vehicle (EV) manufacturer’s share price spike 8% amid the reveal of a new SUV, set for release in April.

So, with the stock currently trading at a slither of its all-time high, is now the time for me to capitalise by adding NIO to my portfolio? Let’s take a look.

Why did NIO rise?

Let’s begin by looking at why the NIO share price spiked yesterday. This was the unveiling of a new medium-sized SUV, officially named the ES7, announced by Qin Lihong, president and co-founder, on Tuesday. Positioned between the ES6 and ES8, the ES7 is based on the firm’s NT2.0 platform, an electric driving system equipped with nearly 20 assisted driving functions. And, with its release reflecting NIO’s continuous expansion, investors clearly took a liking to this news.

Further, if this release follows in the footsteps of NIO’s impressive delivery figures, then it could provide a boost for the firm. Its latest delivery data showed that January deliveries for 2022 represented a 33% year-on-year increase. This was the equivalent of nearly 10,000 vehicles delivered. As a potential investor, these are all positive signs.

NIO share price concerns

However, there are a few issues I see with NIO. One of these is the regulatory pressure it faces within China. The ride-sharing company Didi Global recently delisted from the American markets amid pressure from the Chinese government. And there is the potential this could happen to NIO.

A further concern for me regarding NIO is rising interest rates. As my fellow Fool Dylan Hood highlighted, inflation data came in at 7.5% year-on-year for January in the US. The Federal Reserve is expected to raise interest rates in March. The picture is also similar in the UK, where rates have already begun to rise.

This is an issue for NIO for a few reasons. Firstly, in uncertain times like these, investors tend to switch their money to more stable value stocks, meaning growth stocks (such as NIO) are the hardest hit. It also means the debt NIO has will become harder to pay off, potentially stunting growth.

As the EV market continues to grow, there is also the issue of competition. While NIO has seen large growth since its IPO back in 2018, as more established manufacturers venture into the space, the firm may struggle to compete. A prime example of this is Ford, which recently vowed to be all-electric by 2030. As these firms potentially gain market share, this could have negative connotations for the NIO share price.

What I’m doing

So, while I think NIO’s potential is clear through its impressive delivery numbers, too many issues currently surround the stock. The continuing pressure being applied by regulators provides a constant threat for it. And rising interest rates will load further problems onto the EV maker. I don’t currently hold any shares of NIO, and due to these pressures. I won’t be looking to add any in the near future either.

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.

As sustainability becomes an increasingly important investor consideration, green stocks are gaining momentum. From hydrogen power to wind farms and solar energy, there is no shortage of technologies out there to fuel the world’s net zero ambitions.

However, unearthing the next multi-bag growth stock is fraught with risk. Just because a hot company is heavily invested in a technology that eventually becomes mainstream, doesn’t guarantee it will be a player in that future. I prefer, instead, looking in the FTSE 100, and one stock fits the bill perfectly.

Renewable energy stocks

But first, two I won’t be buying. One of the most popular stocks is Greencoat UK Wind. Its portfolio (via numerous special purpose vehicles) of 40 wind farms is capable of generating 1,290MW of electricity. Its dividend yield stands at 5.1%. However, reliance on wind power as its sole source of revenue worries me. For example, the low wind speeds experienced across the UK last summer hit profits across the sector.

ITM Power is another company making a splash in the renewables space. Its innovative technology powers integrated hydrogen energy systems. But like so many of its peers, it’s unprofitable. This makes it a highly speculative bet and not for me.

A FTSE 100 stalwart

When one thinks of investing in the renewables space, mining giant Glencore (LSE: GLEN) is unlikely to be top of most investors’ list. After all, the company has an extensive interest in coal production and oil. However, it is in fact a highly diversified natural resource producer and marketer of over 60 commodities, many of which will have a critical role to play in the energy transition.

On Tuesday, its share price hit a 10-year high following the release of its 2021 results. Record or near-record prices for base metals such as copper, cobalt, zinc and aluminum meant that profits surged to $5bn. Adjusted EBITDA rose 84% to $21.3bn. On the back of these impressive figures, it declared a dividend of $0.26 per share, as well as announcing a $550m share buyback. In total, that equates to an inflation-beating dividend yield of 7%.

Is Glencore a buy?

Glencore’s share price has risen 300% since the pandemic lows. Many will therefore wonder how much higher it can go from here. The consensus among analysts is that profits will peak in 2022 before declining in 2023. However, as a long-term investor, I am much more interested in where the share price will be in 10 years’ time.

In order for the world to meet ambitious greenhouse gas emissions targets, we are going to need to completely transform our economy. EVs, heat pumps, photovoltaic energy and the likes all require large quantities of base and precious metals, most of which Glencore mine and market. In particular, I see huge demand being placed on copper and silver throughout this decade.

However, like many of its competitors, Glencore has not been deploying significant capital for exploration of either base or precious metals. Ageing assets and declining ore grades are likely to result in supply and demand imbalances remaining for some time to come. Of course, this creates a risk as it will need to pay a premium to acquire junior explorers to replenish its dwindling reserves. It is also facing an ongoing fraud investigation for which it has set aside $1.5bn. Accepting these risks, I would add it to my portfolio, today.

Andrew Mackie owns shares in Glencore. The Motley Fool UK has recommended Greencoat UK Wind. 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 no real surprise to see the Lloyds (LSE: LLOY) share price is up over the last 12 months. The primary reason is the expectation that interest rates will keep going up throughout 2022, which is good for banks’ bottom lines.

Up, up and away… or a value trap?

The consensus view is that because inflation is surging (up over 5% in the UK and even higher in the US), interest rates will need to go up again. I’m no economist but this seems a very likely scenario. That being said, as a long-term investor the short-term picture doesn’t interest me that much. Yet it’s distinctly possible that rate rises could fuel further Lloyds share price growth. 

On the other hand, to what extent is that expectation already built into the Lloyds share price? It’s no secret that rates will very likely keep going up, hence the share price has already risen strongly. It’s possible that buying now is a case of arriving late to the party. How much further share price growth could there be? That’s hard to know. Valuation is inherently tricky, always involves assumptions, and valuing banks’ profitability is even more difficult than for simpler businesses. That’s one reason to avoid them as renowned UK investor Terry Smith does. Indeed, he’s been scathing in the past about banks as an investment.

On the other hand, for those who think Lloyds could do well, there’s also the added bonus of its growing dividend, raising the possibility of the bank as an income and growth share, which is a great combination.

However, it’s probably worth considering the poor historical share price performance. Over five years, even after the recent improvement, the shares are down 20%. The FTSE 100 over the same timeframe is up about 5%. The bank does have a relatively new CEO and is expanding into new areas such as becoming a landlord. This could attract a premium compared to other banks as investors anticipate higher margins and more revenue in future. It’s also a sign management is thinking outside the box to grow the business, which is always nice to see. So there are certainly positives. 

The bank’s UK focus is potentially both a blessing and a curse depending on local economic growth. A UK focus makes the business simpler and helps it have a lower cost base, which is better for profitability. The flipside is it is less diversified and so if the British economy falters, the Lloyds share price may well also struggle.

Final thoughts on the share price

The share price has had a good run over the last year, largely as a result of anticipated interest rate rises and partly from fewer bad loans from the pandemic, yet with my long-term focus, I don’t find investing in Lloyds to be that attractive. The share price should be a beneficiary of rising interest rates. And yet, its long-term record is pretty woeful, so I’ll likely avoid it and add to stocks about which I have much more conviction, such as CMC Markets and Polar Capital.

Andy Ross owns shares in CMC Markets and Polar Capital Holdings. The Motley Fool UK has recommended Lloyds Banking Group and Polar Capital Holdings. 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’m on the hunt for the best cheap UK stocks to buy as 2022 clicks into gear. Here are two dividend-paying shares I’d buy today to hold for years.

A cheap stock with big dividends

Britain isn’t the only Western European nation suffering from a severe shortage of new homes. The Irish property market, for example, is also beset by an inadequate number of homes for both buyers and renters. This is what makes Irish Residential Properties (LSE: 0QT8) such an attractive share to me today.

Rents are soaring and Irish Residential Properties is expanding to make the most of these favourable market dynamics. Latest financials showed net rental income increased 5.9% year-on-year in the six months to June 2021 thanks to organic rent growth and the impact of acquisitions. Pleasingly for the Dublin firm it appears as if the supply/demand imbalance powering rent levels is set to last too. The bean counters at KPMG think rents for a one-bedroom flat in the Irish capital, for example, will rise 50% between now and 2028 to €2,500 a month.

A failure to identify decent acquisition opportunities could hit Irish Residential Properties’ long-term profits. But at current prices I still think the firm is too cheap to ignore. It trades on a forward price-to-earnings growth (PEG) ratio of 0.9. Any reading below 1 suggests that a stock could be undervalued.

On top of this, Irish Residential Properties also packs a mighty 4.3% dividend yield. This beats the broader 3.5% average for UK shares by a decent margin.

A top counter-cyclical stock

Begbies Traynor Group (LSE: BEG) also looks like one of the best stocks to buy in today’s economic climate. The insolvency specialist has a long record of yearly profits growth behind it, a result of the company’s ongoing (and ambitious) acquisition strategy. I’m tipping earnings to continue rising strongly as Britain’s economy worsens.

Unfortunately insolvencies are rising fast as inflationary pressures increase and the end of financial support from furlough schemes bites. The Insolvency Service says that the there were 1,560 corporate insolvencies in January, up from 1,488 in December. January’s number was also more than double that recorded in January 2021.

Recent trading updates from Begbies Traynor’s services also illustrate the increasing turbulence facing British firms. Revenues soared 39% in the six months to October, latest financials showed. Encouragingly the company has continued to build the business to capitalise on this fertile environment. In January it snapped up Daniells Harrison Surveyors for a fee that could rise to £2m.

It’s true that Begbies Traynor operates in a highly-regulated environment. This means profits could suffer badly if new laws come into effect. But at current prices I still think it’s an attractive UK share to buy today. It trades on a forward PEG ratio of just 0.5. A 2.8% dividend yield meanwhile offers an extra sweetener for an investor like me.

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.

The Boohoo (LSE: BOO) share price has been under pressure for some time. It is now back to levels last seen in 2016 having lost 74% of its value in just one year. However, the real damage has been done over the last three months, in which time it has halved. As an existing shareholder, this has led me to re-evaluate my holding.

Profit warning

The recent acceleration in Boohoo’s share price decline can be attributed to a hastily-convened analyst call back in mid-December. In that update, the company issued a profit warning for the financial year ending February 2022. It advised that sales growth would be in the region of 12-14%. This was considerably down on the 20-25% guidance it provided only three months earlier.

The company blamed the revised sales guidance on a number of factors, most of which were related to the global supply chain logjam:

• Reduced air freight capacity leading to 10-day delivery times for US customers
• Significant inbound freight cost inflation hitting EBITDA by approximately £20m
• In the UK, significantly higher returns rates, particularly for dresses
• Revised upward one-off costs related to warehouse and new branding structure

What existing shareholders (including myself) are trying to understand is why did management provide such overly optimistic forward guidance only to retract it so quickly. After all, most of the problems related to inflation and air freight capacity have been ongoing for some time. Therefore, it seems to imply that management did not do its homework properly when it issued its original guidance. For me, that does not paint a good picture. Add on the long-term issues related to working conditions at some Leicester-based suppliers and it’s not surprising that shareholder confidence has been dented.

Is Boohoo a buy?

Management remains convinced that most of the problems negatively impacting the business today are “primarily related to the ongoing impact of the pandemic and … transient in nature.” However, I am not 100% convinced. Firstly, I don’t believe that inflation is transitory.  If that turns out to the case, then supply chain costs will remain elevated for some time. Secondly, wage-price inflation is really beginning to pick up in the economy, which could impact its bottom line.

When the pandemic does finally subside, there is a distinct possibility that international air freight and associated supply chain costs will normalise at a higher level, particularly with oil prices skyrocketing.

International sales, a key barometer for the company’s strategic growth ambitions, have undoubtedly taken a big hit. With competition in the space heating up and the company firmly on the back foot at the moment, it will need to spend heavily on marketing to woo customers back. The opening of its first US distribution centre in 2023 will help, but by then customers might have moved on, permanently.

Still, I think the long-term prospects for Boohoo are good. It has a proven business model and is building a distribution network capable of supporting in excess of $5bn of sales. I am expecting its share price to remain weak for the foreseeable future and much will hang on full-year results. At the moment, I am sitting on the sidelines with the intention of adding to my position should its share price fall further.

Andrew Mackie owns shares in Boohoo. The Motley Fool UK has recommended boohoo 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.

Dividend stocks can be a great way to produce cash flows in my portfolio. Particularly today, as inflation is soaring, I’m looking for high dividend yield stocks in the FTSE 100. Indeed, the Bank of England expects consumer price rises to reach over 7% by spring this year.

With this in mind, here are three stocks I’d buy today with expected dividend yields above inflation.

FTSE 100 dividend stocks

I’d start by investing more in Rio Tinto, the global miner focusing on iron ore, aluminium and copper. The dividend yield forecast is a huge 9% for 2022, so way above the expected inflation rate. Aside from the dividend, one of the reasons I own Rio Tinto shares is that the products it mines are important for decarbonisation efforts. For example, electric vehicles require substantial amounts of copper as the metal is used in the batteries, wires, motors and more.

One thing to note about Rio Tinto is the cyclicality of the business. Commodity prices can be volatile, and as such, Rio Tinto’s earnings can be too. Therefore, my dividend payments will also be volatile. Nevertheless, I think the dividend yield is high enough to compensate me for this risk.

The next company I’d buy is Persimmon, one of the UK’s largest housebuilders. The dividend yield is expected to be almost 10% this year, so it should offer a real return for my portfolio. I also think Persimmon’s homes will be in high demand in the coming years due to the UK’s housing shortage. This should be a good tailwind for the company.

However, one risk to consider is the prospect of rising interest rates. The Bank of England has already raised the base rate twice since December, and this should mean mortgage rates also increase. It could dampen housing demand, and therefore impact Persimmon’s profitability. 

Finally, I’d buy shares of M&G, the financial services firm that was once part of Prudential. The dividend yield forecast is again sky-high at over 9%. Management also aims to grow the dividend over time. M&G benefits from diversified earnings across its various savings and investment products. Indeed, its Assets Under Management and Administration (AUMA) stand at over £300bn, which shows clients trust the firm to invest wisely.

There’s always a risk of a stock market crash though. This would lower AUMA, and hence the fees M&G will earn. My dividend would likely reduce with the earnings too.

Final thoughts

A key risk with dividends is that they’re never guaranteed and depend on the profitability of the companies. As such, it’s important I diversify my portfolio with different types of businesses. So aside from the high dividend yields, these three companies operate across different sectors and should lower the risk of my dividends stopping completely.

Taking everything into account, I’d buy these FTSE 100 stocks for my portfolio due to the inflation-busting dividend yields and the diversification opportunity.

Dan Appleby owns shares of Rio Tinto. The Motley Fool UK has recommended Prudential. 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.

Of all the shares listed in London, there’s one I check almost every trading day. That’s because I’ve owned shares in GlaxoSmithKline (LSE: GSK) for 30 years and more. Also, both my wife and her father worked for GSK for decades. In addition, GlaxoSmithKline is the biggest individual UK shareholding in our family portfolio, so the share price is important. For us, this pharmaceutical giant is like our family firm, as well as a FTSE 100 super-heavyweight.

The GlaxoSmithKline share price roller coaster

The past two years or so have been something of a roller-coaster ride for the GSK share price. At its pre-Covid-19 2020 peak, the stock hit a high of 1,857p on 24 January 2020. But as the coronavirus spread worldwide, global stock markets imploded. Along with the wider London market, Glaxo shares tanked in March 2020. They then regained some ground to close out 2020 at 1,342p. Alas, further price weakness ensured. At their 2021 low, the shares bottomed out at at 1,190.8p on 26 February — just over a year ago.

The next day, on 27 February 2021, I argued that this stock was a buy. With the Glaxo share price closing at 1,191p the previous Friday, I said, “I still see GSK as one of cheapest of cheap shares in the Footsie.” I also committed to buy more shares, which I did by reinvesting my juicy cash dividends.

GlaxoSmithKline bounces back hard

Fast-forward just under a year and things look much healthier for GSK shareholders. At its 2022 peak, the share price soared to an intra-day high of 1,737p on 17 January. This followed news of a huge £50bn bid for GSK Consumer Healthcare by consumer-goods giant Unilever. On Saturday, 15 January, I wrote about this surprise takeover approach. I predicted the share price would soar on Monday, which it duly did. However, when this mega-bid collapsed, the shares dropped back.

As I write, the Glaxo share price stands at 1,589.6p, valuing the group at just over £80bn. Right now, the shares trade on a price-to-earnings ratio of 18.4 and an earnings yield of 5.4%. The 80p-a-share dividend equates to a dividend yield of just above 5% a year. Today, these fundamentals don’t exactly scream value to me. So should I bite the bullet by selling my oldest and largest shareholding?

GlaxoSmithKline is undergoing ‘forced evolution’

Having been a ‘zombie stock’ for much of this century, the Glaxo share price has leapt by almost a quarter (+23.6%) over the past 12 months. It’s also up by 6.1% over six months, but down 3% over five years. So does it make sense for me to sell into recent price strength? The main reason that I’ve held onto my Glaxo stock for so long is the chunky dividend. But the full-year pay-out has not grown since 2015. For the past eight years, it’s been 80p a share, except for payments totalling 81p in 2015/16. This dividend stagnation is set to worsen, as the company plans to cut its dividend this year and next.

In addition, Glaxo will split into two separately listed companies in mid-2022. Also, leading scientist Dr Hal Barron (GSK’s chief scientific officer and president, R&D) is to leave the group. Thus, I have finally decided to sell some of my Glaxo stock. However, I must first track down my dusty old paper certificates before selling. Urgh, what a pain!

Cliffdarcy owns shares of GlaxoSmithKline. The Motley Fool UK has recommended GlaxoSmithKline 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.

Investing for dividend income is extremely popular among investors. Dividends provide a regular boost to their investment wealth and the shares will hopefully also increase in price. Here, I take a look at three FTSE 100 stocks with an expected dividend yield of more than 5%, according to investment research firm Morningstar. I also explain how dividend yield works and examine whether it’s a good way to pick your investments.

Which FTSE 100 stocks have a high dividend yield?

According to Morningstar, these three FTSE 100 stocks have an expected dividend yield of more than 5%.

1. Imperial Brands: dividend yield 8.14%

Imperial Brands, previously known as Imperial Tobacco, separated from the conglomerate Hanson in the late 1990s. Its brands include Regal, Embassy, Lambert & Butler and John Player Special, as well as Castella cigars. Imperial Brands is expected to offer a generous dividend this year, and investors can hope for a yield of 8.14%.

The company’s share price has dropped a massive 52.99% in the past five years, as many investors have turned away from unhealthy companies toward ESG stocks.

2. British American Tobacco: dividend yield 7.11%

How can you invest in dividend income shares?

If you want to invest in shares or investment funds to get a dividend income, then you can either use your pension, a share dealing account or a stocks and shares ISA.

If you’re ready to invest, then a great way to start is to check out our list of top-rated stocks and shares ISAs.

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