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The Bank of England’s monetary policy committee will meet on Thursday and it could take further action to try to curb inflation. Last month, the committee decided to increase interest rates, which caused the FTSE 100 to fall in response. The consensus for the meeting this week is for another interest rate hike of 0.25%. This would take the rate to 0.5%. Interestingly, it would be the first time that the central bank has raised rates consecutively since 2004. Here’s what I’m watching out for.

Hike or no hike

Firstly, I need to see if the consensus is correct. The crowd is not always right, something that was shown back in November. Many were expecting the central bank to increase the rate then, but the committee decided against it. The decision on Thursday is by no means a done deal, so I don’t want to presume that it’ll 100% happen.

The rate decision will immediately be felt in the stock market. I’d expect that an increase in rates would cause the FTSE 100 to fall, while no increase would see a rally. Historically this has been the case, as higher interest rates aren’t good news for the majority of companies. It increases the cost of issuing new debt. It also leaves an investor like me with a decision to make. If I can pick up higher interest leaving my funds in my bank account, should I risk investing it in the market?

As a note, there are some companies that do better with higher rates. This includes banking stocks such as Standard Chartered, as I explained in more detail here.

Thinking ahead for 2022

The second thing at the BoE meeting that I’m focused on is the commentary around future interest rates. Some analysts are forecasting as many as three hikes this year. This could put the base rate at 1% by the end of 2022. 

The committee members could address what their thinking is for the rest of the year. This will likely be based on their expectations for inflation. If inflation levels are due to subside and move back towards the 2% target, then further increases in the base rate shouldn’t be needed. 

I want to note this because it will also be a driver for the FTSE 100. If investors think that multiple increases are coming, they’ll likely take more action on their portfolios. This might mean them buying more defensive stocks such as utility companies like National Grid.

Meeting outlook

Finally, I want to understand what the outlook is from the central bank more generally, outside of interest rates. The committee should present thoughts on the state of the broader economy. This will include points on employment, GDP and even the projected impact of Covid-19. 

Although this might not move the FTSE 100 immediately, it’ll help me to decide in which areas of the economy to consider buying stocks. For example, if the committee flags that it expects higher than expected growth fuelled by consumer spending, then I’d consider buying consumer discretionary stocks.

It’s clear to me that as an investor, although the interest rate decision will be key on Thursday, there are other points that I need to be aware of and listen to as well.

Jon Smith has no position in any share mentioned. The Motley Fool UK has recommended Standard Chartered. 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 past five months have been a brutal time for investors in online food-delivery business Deliveroo Holdings (LSE: ROO). The Deliveroo share price has crashed by more than three-fifths after peaking in August 2021. But after seemingly relentless falls, could ROO shares be due a rebound in 2022?

The Deliveroo share price’s roller-coaster

Deliveroo was founded in 2013 by Will Shu and Greg Orlowski. The online food-delivery company operates in countries including the UK, Netherlands, France, Belgium, Ireland and Italy. When it floated in London 10 months ago, its initial public offering (IPO) was a flop. The IPO price on 31 March 2021 was 390p, valuing the group at £7.6bn. Alas, the share price crashed as low as 271p, down 119p (-30.5%) within minutes. It then closed at 287.45p, down 102.55p (-26.3%).

Unfortunately, the decline in the share price continued, with the shares dividing to a low of 224.44p on 23 April 2021. But then ROO shares set off on a multi-month upward run, soaring into the summer. On 18 August last year, they peaked at a record high of 396.8p, before closing at 395p. What a comeback.

As summer turned to autumn and then winter, the share price cooled with the seasons. On October 4, it closed at 265.5p and then staged a brief comeback, rising to close at 314.2p on 26 November. Sadly, it’s all been downhill since for ROO stock as it has crashed by more than half (-53.2%) since November’s high. On Friday, the shares closed at 146.5p, valuing Deliveroo at just £2.7bn — around £5bn less than its peak valuation. Crikey.

Deliveroo shares fail to deliver

On 27 September, with the Deliveroo share price standing at 298p, I declined to buy ROO stock. I’m relieved I didn’t, because the shares have lost over half their value subsequently. On Friday, 28 January, the Deliveroo share price hit an all-time intra-day low of 143.37p, down a whopping 63.9% from its peak. After such a brutal price decline over five months, could this former growth stock have moved into value territory?

The first point I would make is that a stock that has already fallen 60% can go on to fall another 60%. In 35 years of investing, I’ve seen this happen time and again. When companies repeatedly disappoint the market, their shares can go into long-term decline. Then again, Deliveroo is a fast-growing business, so maybe its share price might one day catch up with the underlying business performance?

Deliveroo keeps on growing

In Deliveroo’s latest trading update on 20 January, the group revealed that gross transaction value (its preferred measure of customer spending) rose 70% year-on-year to £6.6bn. It delivered 40.4m meals and grocery orders in the UK and Ireland last year. The group now covers 77% of the UK population, up from 53% at end-2020. Meanwhile, Deliveroo confirmed that its gross margins would be in line with its target range of 7.5% to 7.75%. But this failed to lift the share price, which is down 14.8% since 20 January.

I don’t own Deliveroo shares, but would I buy at the current price of 146.5p? It’s a heavily loss-making business, but is growing fast. However, changes to employment law might upset the group’s reliance on self-employed gig workers. Even so, with the Deliveroo share price having fallen so far, I’d buy it as a speculative punt for my portfolio today!

Cliffdarcy has no position in any of the shares mentioned. The Motley Fool UK has recommended Deliveroo Holdings Plc. 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.

There are some excellent stocks to choose from in the FTSE indices. Today, I’ve been looking specifically in the FTSE 250. It’s the UK’s more domestically-oriented stock index of companies.

Here’s a stock in this index I’d snap up today.

The investment case

The company I’ve been looking at is Pets at Home (LSE: PETS), the omnichannel retailer of pet products. The website says it’s the UK’s leading pet care business, “providing everything a pet owner needs”.

Before I dig into the business, let me point out that there’s a growing industry for pet products in the UK. According to Statista, consumer spending on pets increased to £7.9bn in 2020. What’s more, the share of households owning a pet in the UK increased to 59% last year, up from 41% in 2020. This growth of the wider pet industry should really benefit Pets at Home going forward.

The business has been trading very well recently. In the third-quarter results to 31 December, Pets at Home upgraded its full-year profit before tax to £140m, which was above previous analysts’ expectations. Management said this was due to “strong continued momentum” heading into the final quarter. Indeed, like-for-like revenue growth has been very impressive of late. This was 17.5% for the nine months to 31 December compared to the same period in 2021.

With strong sector tailwinds from the booming pet industry in the UK, and continued business momentum, the investment case looks attractive in my view.

Risks to consider

There are always risks with any investment, so I need to weigh these up for this FTSE stock. Pets at Home did warn of inflationary pressures recently due to ongoing supply chain issues. Price rises may begin to compress profit margins in the business, and therefore earnings may reduce. On the other hand, rising inflation may also dampen consumer spending, and then reduce sales.

Competition is also something to consider. Online delivery has been a major growth driver for Pets at Home during the pandemic. However, a company like Amazon, which is a much bigger online retailer, could steal market share. This would impact growth forecasts for Pets at Home.

Should I buy this FTSE stock?

I need to understand the valuation before I buy the shares. Its price-to-earnings (P/E) ratio shows Pets at Home is valued on a multiple of 20 for fiscal year 2022 (the 12 months to 31 March). The P/E ratio drops to 18 for fiscal year 2023. This isn’t dirt-cheap by any means, but it seems reasonable given the positive momentum in the business.

Another way to look at valuation is using free cash flow yield. For fiscal year 2023, this is expected to rise to 5%. It shows that Pets at Home is cash generative, and it’s planning to use some of this cash to increase the dividend. Analysts are expecting the dividend yield to rise to 3% next year.

All in all, I think this FTSE stock is an excellent buy for my portfolio. It’s not without risks, but the company is trading well, and should benefit from rising pet ownership in the UK.

Dan Appleby has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon. 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.

When I last covered Tesla (NASDAQ: TSLA) late last year, I said I didn’t see the stock as a ‘buy’ for me. One thing I was concerned about was the valuation.

Recently however, the valuation has come down as Tesla’s share price has pulled back. Year to date, TSLA has fallen around 20%. Has this changed my view on the stock? Read on to find out.

Tesla stock: is now the time to buy?

There are certainly some reasons to consider buying Tesla stock for my portfolio right now.

For starters, recent Q4 and full-year 2021 results showed that the company continues to generate strong growth. For 2021, the group delivered a record 936,000 vehicles, nearly double the 2020 figure. Meanwhile, total revenue for the year jumped 71% to $53.8bn.

Secondly, the company is now more profitable than it was in the past. Last year, it generated non-GAAP net income of $7.6bn, up from $2.5bn the year before. “In 2021, our accumulated profitability since the inception of the company became positive,” said CEO Elon Musk on the Q4 earnings call. “Which I think makes us a real company at this point. This is a critical milestone,” he added.

Third, Tesla looks to have some very exciting technology in the pipeline. One example here is its ‘full self-driving’ (FSD) tech. Musk believes Tesla’s vehicles will have FSD tech by the end of this year. This is expected to boost profitability further.

Another example is Tesla’s artificial intelligence-powered robot. Musk believes the group’s robot plans have the potential to be more significant than the vehicle business in the long run.

Overall, there’s a lot to like about Tesla stock right now, in my view.

Does Tesla have an attractive valuation?

I still have some concerns over the valuation, however. For 2022, Wall Street analysts expect Tesla to post earnings per share of $10.10. This means that at the current share price, the forward-looking P/E ratio is about 84. This is a lot lower than it was in the recent past, however, it’s still high and it doesn’t leave a margin of safety, in my view. If future growth is disappointing, Tesla’s share price could take a big hit.

And there are certainly things that could slow its growth rate. For example, supply chain challenges could potentially be a problem this year. In Tesla’s Q4 results, the company said: “Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022.”

Competition from rivals could also slow growth. Today, consumers have a huge amount of choice when it comes to premium electric vehicles (EVs). In the last year or so, many automotive companies have released slick new premium EVs, including Ford, Porsche, Lucid, BMW, Mercedes-Benz, Volvo, and Rivian. Recently, analysts at Bank of America predicted that Tesla could lose significant market share in the years ahead. 

Putting this all together, I’m still not super bullish on Tesla stock. I do like the company, however, the stock looks risky to me. All things considered, I think there are better growth stocks I could buy today.

Edward Sheldon has no position in any of the shares mentioned. 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.

I think Games Workshop (LSE: GAW) is one of my best stocks to buy now, and would happily add to my position with a £1,000 investment now. 

The investment case

When I look to buy shares, I search for the following: a good management team, an economic moat, and financial growth. I think Games Workshop demonstrates all of these characteristics.

#1 Good management team: Kevin Rountree is the current CEO after taking the top job in 2015. Since he became CEO, the share price has rallied from 520p to 7,740p today, or a return of 1,388%. I put this down to his leadership of the company. He joined Games Workshop back in 1998 as an assistant accountant and worked in various roles before becoming the CEO, so he knows the company very well. He’s also supported by Rachel Tongue as CFO, who has been at the company since 1996. The leadership of Rountree and Tongue should lead to further share price returns in the years ahead, in my view.

#2 An economic moat: Games Workshop has been developing its games and characters for decades. It would be very hard for a competitor to replicate this long history. There are some parallels to Disney and how it’s developed its own fantasy worlds that keep fans engaged with the company. Games Workshop is able to generate double-digit profit margins too, which I think reflects the strong economic moat in the business.

#3 Financial growth: It has grown revenue from £119m in fiscal year (FY) 2015 (the 12 months to 31 May 2015) to £353m in FY21. Earnings per share have increased from 42p to 372p over the same period. This is attractive growth in my view. What’s more, revenue increased again in the six months to 28 November, suggesting there’s momentum in the business.

Even the best stocks to buy now have risks

There are always risks to consider with any investment. For Games Workshop, the biggest risk I see is if players stop buying its games. It would be very easy for a new video game, or even a competitor’s tabletop game, to be released and steal market share. The video game industry is very competitive, so this could draw fans away from Games Workshop.

There’s also been a slowdown in growth for FY22. Revenue is expected to increase by almost 9%, and EPS by over 4%. This is a big decrease against the growth rate the company achieved in FY21, where revenue rose by 31% and EPS by 69%. Games Workshop is subject to cyclicality, depending on its major game release schedules. There was a big update to its key game in FY21 which boosted the growth rates. Nevertheless, it’s something to monitor going forward.

Final thoughts

The share price has weakened recently, so there could be an excellent buying opportunity for me. The current forward price-to-earnings ratio is 20. This has fallen from 21 last year, and a much higher 37 in FY20.

I think the risk-reward balance is compelling for me at this share price. I’m going to buy Games Workshop for my portfolio.

Dan Appleby owns shares of Games Workshop. The Motley Fool UK has recommended Games Workshop. 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.

International Consolidated Airlines (LSE: IAG) has suffered more than most companies during the pandemic. The airline group, which owns British Airways, was severely disrupted when Covid halted the travel market. But could things be turning a corner for this FTSE 100 stock? Restrictions are easing in the UK, so there could be a lot of pent-up demand for holidays abroad this year.

Let’s take a look to see if I should buy the shares.

The investment case

International Consolidated Airlines, or IAG, released its third-quarter results in November and the CEO said a “significant recovery was under way”. He followed by saying: “We continue to capitalise on surges in bookings when travel restrictions are lifted”.

However, this was before Omicron started to spread. Does this mean further restrictions in 2022 for international travel?

Well, according to the UK government just last week: “2022 is the year in which restrictions on travel, lockdowns and limits on people’s lives, are firmly in the past.” It further laid out plans to ease travel restrictions, which should be a huge boost for IAG.

Growth forecasts for the next two years certainly reflect this. City analysts expect revenue to grow by 132% in 2022, and by 23% in 2023. What’s more, earnings per share (EPS) are expected to rebound into positive territory this year (albeit only to 92 cents). However, in 2023, EPS is forecast to reach 254 cents. Based on a forward price-to-earnings ratio for 2023, the IAG share price is rated on a multiple of 7. This does look cheap, although it’s in line with pre-Covid valuations.

Is this FTSE 100 stock a buy?

Things are certainly looking up for IAG. Fewer travel restrictions and a surge in holiday bookings should boost revenue growth this year and next. But will this make the share price explode?

I’m not so sure. After all, a share price is primarily used to determine the market value of a company. Simply times the share price by the number of shares in issue, and that’s the value of a company. For IAG, its current market value is £7.7bn based on today’s share price. Back in 2019 (pre-Covid), IAG’s market value was £9.7bn. That’s 26% higher than today. It would be a decent return for me, but not exactly explosive.

However, this time back in 2019, the share price was as high as 430p, which is 179% higher than today’s share price. Now that really would be an explosive share price rise!

The reason for the difference in potential returns is due to IAG issuing new shares during the pandemic. The company raised €2.7bn to strengthen its balance sheet and reduce leverage. It was sensible at the time, given the circumstances. But it does mean the share price is unlikely to rise to pre-Covid levels any time soon due to the dilution of the share count.

In addition, even though revenue is expected to grow significantly in the next two years, it would still be under the revenue IAG achieved in 2019.

So, for now, I’m not going to buy shares of IAG. The recovery looks promising, but I think the current share price reflects the growth ahead. Therefore, I don’t see it exploding from here. I think there are better FTSE 100 companies to buy today.

Dan Appleby 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 ITM Power (LSE: ITM) share price stands at 239p as I write this article. However, consensus analyst expectations point to a share price of 586p, or an expected return of 145%. What’s more, Jefferies just reiterated their share price target of 800p. To put this into context, if I bought £1,000 of ITM Power stock today and sold at 800p, that would turn my investment into £3,347. Wow!

They might be wrong, but City analysts certainly think I’d double my money buying ITM stock. So, should I buy?

The bull case

I can see the appeal in ITM Power as a company. On its website, it says that it’s a world leader in ‘green hydrogen’ technology. That’s quite a statement, and enough to get investors interested. In particular, the company develops equipment to convert renewable energy into a net-zero fuel. This would reduce the need for fossil fuels, and therefore result in lower carbon emissions and improve air quality.

In a study by PwC, it said green hydrogen “holds significant promise in meeting the world’s future energy demands”. This sounds promising, and a good sector tailwind for ITM Power.

In support of the bullish share price expectations, analysts are also forecasting spectacular revenue growth in the years ahead. For the fiscal year ending 30 April 2022, revenue is expected to be £22m. In fiscal 2023 and 2024, revenue is forecast to increase to £66m and £133m, respectively. If achieved, this would be three consecutive years of triple-digit revenue growth. No wonder analysts expect the ITM Power share price to surge.

Risks to consider

ITM Power released its half-year report ending 31 October last week. However, revenue only came in at £4.2m. Management said this was “reflecting [the] impact of Covid-19 issues”. It means the company needs to generate £17.8m of revenue in the second half of its fiscal year to reach analysts’ forecasts. To my mind, this looks to be a difficult ask.

I also note that PwC said “the economics of green hydrogen are challenging today, primarily because the underlying costs and availability of renewable energy sources vary widely”.

On this note, ITM Power is still heavily loss-making. In the half-year report, the company made a gross loss of £2.6m on the £4.2m in revenue it generated. And even though revenue forecasts look fantastic, ITM Power isn’t expected to become profitable for at least the next three years. This does heighten the risk of any investment. However, the company has £164.2m of cash on the balance sheet after an equity raise in 2021, so there’s enough of a cushion to make up for these losses as it stands.

Should I buy at this ITM Power share price?

It comes down to valuation for me. As the company doesn’t make any profit, I can’t value the shares on a price-to-earnings basis. On a forward price-to-sales ratio though, the shares are rated on a multiple of 60. This will fall considerably, of course, if the revenue forecasts are met. However, the current valuation is pricing in a lot of success, and there’s no guarantee it will reach its revenue goals.

So, although City analysts expect the price to double, I’m not convinced. There are too many risks for me to invest at this stage. I’ll revisit the stock when I see more evidence of revenue growth.

Dan Appleby 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 near-term outlook for car retailers like penny stock Pendragon (LSE: PDG) is less than certain. The supply of new autos is a problem the firm’s flagged up before and news that British car production has hit 65-year lows isn’t going to soothe nerves.

Sellers of big-ticket items like Pendragon might also suffer as rocketing inflation smacks consumer confidence.

That said, I think Pendragon’s cheap price might still make it a great long-term buy today. At 21.6p per share, it trades on an ultra-low forward price-to-earnings (P/E) ratio of 6.5 times.

I’m minded to buy the penny stock as I think sales of its electric vehicles could soar as concerns over the climate emergency grow. The Society of Motor Manufacturers and Traders has previously guided that 300,000 new battery-powered vehicles could roll out of UK showrooms in 2022.

Protection from surging inflation

I think investing in some choice property good stocks could be a good idea too as inflation hits 30-year highs. Many UK companies face pressure from rising prices in some way, shape or form, whether that be through rising costs or falling consumer spending power. Property shares are a good hedge against this as rents tend to rise in line with inflation.

This is one of the reasons I’m considering buying Empiric Student Property (LSE: ESP). But it’s not the only one. Sure, the student accommodation specialist would take a hit if the Covid-19 crisis worsens and university attendances dive again. However, I think the long-term benefits of owning this share outweigh this more immediate danger.

Soaring numbers of overseas students is only increasing the shortage of student beds in Britain. This is steadily nudging rents up and property supply is tipped to continue lagging demand for years to come.

At 89p per share, Empiric Student Property trades on a forward price-to-earnings growth (PEG) ratio of just 0.2. This is well inside the widely-accepted bargain benchmark of 1 and below.

Another dirt-cheap penny stock!

Pub operator Marston’s  (LSE: MARS) is another penny stock that could suffer if Covid-19 rates increase and lockdowns return. Investors already have to tolerate a big dollop of risk here as labour costs rise.

But it’s my opinion that recent share price weakness here represents a terrific buying opportunity for long-term investors. Today, the firm trades on a forward P/E ratio of 10.2 times.

I’m encouraged by news that sales here were bouncing back before Omicron emerged and fresh restrictions followed. Revenues were up 1.3% in the eight weeks to 27 November, Marston’s said last week.

Britons were spending more and more money on leisure activities like drinking and easting out before the Covid-19 emergency. Those fresh numbers suggest this positive trend remains in tact and could power profits at pub operators like Marston’s in the years ahead.

Today, the UK leisure share trades at 81p per share. I’m thinking it could be too cheap for me to miss.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Marstons and Pendragon. 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 an income investor, the dividend yield of a stock is very important. However, it only tells me the yield at that specific point in time. By looking at the growth rate in the dividend per share over a few years, I get a much better feel for whether the dividend is sustainable for the future. With that in mind, here are a couple of my favorite FTSE 100 income stocks that have high long-term dividend growth rates. 

A FTSE 100 income stock with growth potential

First up is Auto Trader (LSE:AUTO). The online vehicle marketplace enjoyed a decent 2021, with the share price up 12% over the past year. Last month I wrote about several reasons why I was bullish on the company for this year. The half-year results that were released in November started out by saying that “we have achieved our highest ever six-monthly revenue and profits”.

This has been in part thanks to the high demand for used cars and the pivot to make it easier to filter and find electric vehicles on the site. Its willingness to evolve has enabled the company to grow the dividends that are being paid out to investors. Over a five-year period, the annual growth rate in dividends has been 23%. 

At the moment, the rising share price has meant that the dividend yield is low at 1.2%. Yet I’d still add this to my portfolio of income stocks. This is for two reasons. Firstly, I’d buy shares in Auto Trader to offset the risk of any much higher yielding (10%+) company that’s high risk. Secondly, if this 23% growth rate continues in coming years, the yield will quickly start to move higher.

As a risk, the company does need to factor in the rising prices of second hand cars, due to a shortage of chips and Covid-19 related delays for new cars. This could make it too expensive for some to actually buy a car right now, reducing sales. But that doesn’t seem to be happening for now.

Riding the wave of high commodity prices

The second FTSE 100 income stock is Antofagasta (LSE:ANTO). The dividend yield is 4%, making it an above-average-yielding income play. Further, the compound annual dividend growth rate over the past five years has been 87%. Personally, I’d be happy to buy shares in this as a standalone dividend stock, or as part of a portfolio.

The business is an international mining company based in Chile. It mainly produces copper, which has a wide range of commercial uses. Part of the gains in the dividends can be seen from the rise in the price of copper. Over the past five years, the copper price has surged 66%, to currently trade at $4.31 per tonne. A higher price of the metal enables Antofagasta to grow revenues, ultimately helping to give the opportunity to pay out more profit to shareholders.

In a recent production report, the CEO did cite risks for the business. They include “the ongoing drought in Chile, higher input costs and global supply chain challenges”. All of these have the potential to derail and lower production for the coming year for the income stock. Yet it remains a stock that I think could suit my portfolio.

Jon Smith has no position in any share mentioned. The Motley Fool UK has recommended Auto Trader. 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.