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What a difference a year has made to the share price of Peloton Interactive (NASDAQ:PTON). On 13 January 2021, it closed at an all-time high of $167. Today, I can pick up the stock for less than its IPO price of $29 – that’s a fall of 85%. So where has it all gone wrong for this former lockdown darling? Can the company survive into the future or will its name be added to the scrap heap of failed corporate ventures?

A tail-spin of negative headlines

Peloton’s woes can be traced back to November 2020. Back then, still in the grip of the pandemic and stay-at-home orders across large parts of the globe, people turned to its bikes and treadmills in huge numbers in order to work out. But as customer complaints begun to rise due to shipping delays from Asia, it was forced to invest heavily in air freight.

In order to bolster its manufacturing capability in the US, it paid $420m to acquire fitness equipment manufacturer, Precor. Then, in May 2021, it announced its intention to build its first US factory, due to open in 2023.

However, negative press continued to follow Peloton. First, the company was slow to act in response to safety concerns regarding its Tread+ machines following the death of a child. Then came the share price fall in response to an HBO reboot of Sex and the City in which one of the stars died of a coronary following an intense cycle workout on one of its machines.

Last week, the stock lost a quarter of its value when a leaked internal report that the company intended to halt production of its fitness equipment. The reason given was a “significant reduction” in demand. There were also unconfirmed reports that it would delay the opening of its US factory until 2024 to save costs.

Can Peloton recover?

It is clear that Peloton’s prediction about its sales growth in a post-pandemic world were wrong. Unlike the work-from-home trend, which seems to be here to stay, a lot of people still want to go to the gym or train outdoors. And, besides, competition in the home-gym equipment market is more intense today. In a recent survey of 4,000 people by insurer Aviva, many deeply regretted buying big-ticket items to entertain themselves – including exercise equipment – during lockdown. Although hardly scientific, I think this tells a tale itself.

What will happen to Peloton’s stock price in 2022 is anyone’s guess. What is clear is that near-term tail risks remain. For example, with inflation rising and heightened supply chain costs, the company intends to start charging customers hefty additional fees for delivery and set up. I expect such charges to impact on sales figures in 2022.

Of course, Peloton is a lot more than just a fitness equipment manufacturer. It also charges a monthly subscription fee for on-demand content. I am also encouraged by its ability to innovate. Its most recent offering, Peloton Guide, is a strength-training gym. It’s a no-frills product consisting of a camera that plugs into a tv and monitors a user’s movements.

In the mid-term, I doubt Peloton’s share price will reach anywhere near $167. Whether it sinks from here, though, will very much depend on how well it can make itself relevant to people’s lives in a post-pandemic world.

Andrew Mackie has no position in any of the shares mentioned. The Motley Fool UK has recommended Peloton Interactive. 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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IT infrastructure specialist Computacenter (LSE: CCC) describes itself as an independent technology partner. And it sources, transforms and manages the IT infrastructure of large corporate and public sector organisations.

It’s a good business. And the firm said in today’s pre-close trading update it expects earnings for 2021 to come in ahead of the directors’ previous expectations after a strong fourth quarter. 2021 will now be the 17th year of uninterrupted growth in earnings per share. And that’s “in spite of headwinds from a strong pound and product supply shortages.”

A decent outcome for investors so far

And that long record of growth has worked wonders for the share price. At 2,680p, the stock is up by around 11% over the past year. But over five years, it’s around 240% higher. But on top of that capital growth, shareholders have enjoyed a stream of dividends. And the shareholder payment has been running at a compound annual growth rate close to 19% over the past few years.

If I had to sum up the appeal of this business to me in one word, it would be ‘consistency’. And for that reason, I’d want Computacenter to be a core holding in my portfolio now. But is the valuation right? And to answer my own question I’d say with its forward-l00king P/E rating running just above 17 for 2022, looks fair rather than cheap. But it’s not wildly expensive either if the business can maintain its gentle growth trajectory in the years ahead.

City analysts have pencilled in an essentially flat performance for earnings in 2022. So there don’t seem to be any immediate prospects for growth. But I’ve learned not to underestimate Computacenter’s apparent ability to keep grinding forward with progress. So, I’d expect a decent growth outcome from the business over, say, five years and more into the future.

In 2021, revenue grew by 23% including contributions from acquisitions made since the beginning of 2020.

A positive outlook

Looking ahead, the directors are optimistic for 2022 based on the “robustness of the business” through 2021 and the particular strength of the fourth quarter.  Meanwhile, the product order backlog is “at an all-time high and considerably larger than a year ago”. The directors reckon the situation arose because of product supply constraints leading to customers ordering earlier. However, they also said there is “significant” underlying strength in the market.

Computacenter went into 2022 with operations “growing in multiple geographies” and the directors think the business is “well placed” for another year of progress. But, of course, past performance is no guarantee of a good outcome in the future. And on top of that, the wider stock market has been showing weakness lately.

It’s possible that I could buy the stock now and see it decline if the market decides to re-rate the company’s valuation lower.

Nevertheless, I’m keen on CCC as a long-term hold and would likely be even keener if the share price declines from where it is now. Computacenter is a top stock for me to hold for 2022 and beyond.

Kevin Godbold 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.

2021 was a much better year for regular dividends from UK dividend stocks. And if forecasts are to be believed, 2022 could be an even finer one as corporate profits recover further from the initial Covid-19 shock.

A report from Link Group shows total dividends from UK shares soared 46.1% in 2021, to £94.1bn. Regular dividends jumped to levels not seen since 2015, the financial data specialist added, to total £77.2bn. This was almost 22% higher from 2020 levels.

An abundance of special dividends in 2021 was the standout point from today’s report, though. These supplementary payouts jumped to record levels of £16.9bn last year, three times their normal level.

2021: an “unbalanced” year

Link Group describes 2021 as “a very unbalanced year” from a dividend perspective “with excessive dependence on mining companies”. It says that payments from these dividend stocks were three times larger than the long-term average. They also accounted for a quarter of all UK payouts.

The banking industry was the second-biggest contributor to last year’s growth, whilst payouts from the industrials sector jumped almost 60% year-on-year. Link Group says that dividends from defensive sectors like food, basic consumer goods and pharmaceuticals were basically held flat.

2021 was another tough year for airlines, travel and leisure companies, however, with cumulative dividends falling around 80% year-on-year for a second successive time. Oil dividends were lower because reductions here took place later on in 2020, Link Group says, while BT’s cancelled dividend also hit telecoms payouts hard.

What to expect from dividend stocks in 2022

In a cheery nod to 2022, Link Group says that “the recovery in UK dividends is not complete, but the easiest part of the catch-up is now behind us”. The organisation expects underlying dividends to rise 5% this year from 2021 levels, to £81bn.

Growth here stands at 8.9% when adjusted for the upcoming delistings of FTSE 100 shares BHP Group and Morrisons, too. BHP’s about to embark on a sole listing in Sydney, whilst Morrisons is being taken over by a private equity group.

On a headline basis, however, Link Group thinks total UK dividends will actually fall, though. This reflects lower-than-expected special dividends following 2021’s blowout performance. It expects additional payouts to drop 7% year-on-year to £87.5bn.

Cautiously optimistic

Link Group has suggested that the new year might not be a cakewalk for UK dividend stocks. It says that “2022 faces a number of headwinds in the form of omicron disruption, inflation, and tax hikes and that adds uncertainty to our forecast”. But the forecaster says that it remains “cautiously optimistic” that most sectors can deliver growth.

Banks and mining companies will be “the main engines” of dividend growth this year, Link Group reckons. It adds that mining firms won’t raise payouts at the same pace of 2021 nor pay such colossal special dividends. It did add though that it is “hopeful” that their regular dividends will be supported “given relatively firm commodity prices”.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Morrisons. 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.

Please note that tax treatment depends on the specific circumstances of the individual and may be subject to change in the future.

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The metaverse has become a hot topic since Facebook changed its name to Meta Platforms. But where should I look for potential big winners? In this piece I want to share details of three metaverse stocks I’d buy today.

#1: essential services

My first pick is Keywords Studios (LSE: KWS). This Dublin-based firm provides a wide range of specialist services to the video games industry. These include audio service, graphic design, player community management and much more. I see these as major growth sectors as we spend more of our lives online.

Keywords has been expanding rapidly in recent years by combining acquisitions with in-house growth. This can be a difficult strategy to do well, as there’s a lot to go wrong. Any disappointments could see Keywords’ shares slump — but results so far have been impressive.

Keywords Studios’ sales and profits have risen by an average of 45% per year since 2015. Broker forecasts suggest this pace could slow in 2022, but the company’s new chief executive has already said he expects results this year to be “at the upper end” of current forecasts. I think a further upgrade is possible.

This stock isn’t cheap, which is a risk, but I would buy Keywords Studios for my portfolio as a long-term play on metaverse growth.

#2: a metaverse security stock

Cyber crime is already a huge risk for anyone (or any company) that is active online. In my opinion, these risks are only going to get bigger as the metaverse evolves. Anti-virus protection won’t be enough. Businesses will need a much broader range of security-related services.

One company that already operates in this area is NCC (LSE: NCC). This £680m, Manchester-based business provides a full range of security and “risk mitigation” services for businesses. These include security assessments, training, incident response and compliance certification. The big risk facing NCC, of course, is that it could fall victim to cyber crime itself. I’d imagine this might destroy its reputation as a trusted advisor.

The NCC share price has pulled back since the start of this year, in line with the wider tech slump and many of the risks affecting tech stocks are the same for NCC. I reckon this could be a buying opportunity. NCC shares now trade on 18 times forecast earnings, with a 2.1% dividend yield. That doesn’t seem expensive to me, for a business that’s expected to deliver earnings growth of around 15% for the current year. I’d consider buying at this level.

#3: superfast networks

One area where the metaverse is expected to drive growth is virtual and augmented reality. Delivering this kind of service needs fast and reliable networks. That’s where my final pick comes in.

Calnex Solutions (LSE: CLX) specialises in “test and measurement solutions for the global telecommunications sector”. It’s a recent addition to the UK market that’s impressed me considerably so far, with a track record of growth, 20% profit margins and owner-management.

One risk for shareholders is that Calnex only listed on the stock market 15 months ago. I think there’s some risk of a slowdown after sales rose by 20% last year. However, long term I don’t think this should matter.

Founder Tommy Cook expects cloud computing and 5G mobile to create new opportunities. I agree. I’d be happy buying a few Calnex shares today to tuck away for the next decade.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Keywords Studios and NCC. 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 is growing nervousness among some investors right now. Many tech shares have seen heavy price falls lately, while some defensive sectors have seen share prices rally. Some people fear that suggests we could see a stock market crash. A crash can be bad for many people — but not everyone. In fact, from a passive income perspective, I think any crash could present me with attractive opportunities.

What a stock market crash means for dividend yields

That is because in a crash, share prices tumble. But if a company does not cut its dividend, a falling share price can mean an increasing dividend yield for those buying at the lower price.

As an example, imagine a company that pays a dividend per share of 5p. If its shares trade at £1, that means that the dividend yield is 5%. So I can hopefully expect money equivalent to 5% of my investment to be paid to me as dividends in the coming year. For example, if I invest £1,000, I would hopefully get £50 of dividends.

But if the share price falls to 80p, the 5p per share dividend would now make for a yield of 6.25%. So if I put £1,000 into the shares at that price, I would be hoping for dividend income of £62.50 in the coming year. Simply by buying the shares after they have fallen in price instead of before, I will have boosted my passive income prospects.

Crashes bring risks

But things might not be that simple in reality. Dividends are never guaranteed. A stock market crash can sometimes be caused by a declining economic outlook. So it may be that as a company share price falls, its earnings also fall. It may be forced to slash its dividend. In that situation, the high yield I initially expect after buying a share could fall once the dividend is cut. In this situation, what looks at first like a bargain passive income stream turns out to be a value trap.

That is why I would look for shares with earnings streams I felt were resilient. That can be difficult to do. A stock market crash caused by the economic outlook worsening could also mean weakened demand. That could hurt companies’ revenues. If the crash is caused by worries about inflation, soaring costs could eat into firms’ profits. So I would want to understand the key cause of a crash when choosing businesses I hoped would remain resilient throughout it.

Passive income ideas I’d consider in a market downturn

Tobacco companies like Imperial Brands tend to not see big falls in demand in a worsening economy. They do face other demand risks, such as falling cigarette customer numbers because of health concerns. That could hurt revenues and profits. For now, strong cash flows at Imperial support a yield of over 7%. If a crash leads to its share price falling, the yield could be even more attractive for my portfolio.

Like Imperial, Direct Line yields over 7%. A financial downturn could lead to customers buying fewer financial products, hurting revenues. Then again, products like car insurance see resilient demand. Pricing increases could offset added costs caused by inflation. That could help sustain the dividend. If Direct Line falls in a stock market crash, it could become a higher-yielding passive income idea I would consider for my portfolio.

Christopher Ruane owns shares in Imperial Brands. The Motley Fool UK has recommended Imperial Brands. 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 FTSE 250 index has been weak in January. But that is not true for every component of the index. This includes some of my own investments, like Cineworld, easyJet and National Express,all of which have made gains. I do not think this is a coincidence. They are all among the worst affected by the pandemic. And as Covid-19 wanes, their fortunes are rising. This is exactly the story I would expect to play out for Rolls-Royce (LSE: RR) shares too. In fact, this is already visible. The FTSE 100 stock has not performed too badly in the past month. 

From coronavirus to inflation risk

I think it is still risky though. The threat of coronavirus might just have been substituted for the risk from high inflation. Inflation reached alarming proportions in the UK last year, when it came in at 5%+ on a year-on-year basis for November 2021. It remained at these levels in the December reading as well, and is likely to stay pretty high through the year. Out-of-control inflation is not good for most stocks, but particularly not for stocks like Rolls-Royce.

Airfares could rise

The company’s biggest source of revenue is its civil aviation segment. It manufactures and services aero-engines for airlines. We know of course that the last couple of years have been exceptionally bad for travel, and air travel in particular. And it is unlikely that it will be back with a bang any time soon either, as travellers might still like to exercise caution. Now, they might also be deterred by potentially rising fares.

Rolls-Royce shares could be impacted

Crude oil prices have been on the rise, and some analysts predict that they could rise to $100 per barrel in 2022. Aviation fuel prices are closely linked, and could rise as well. It is quite likely that airlines are hedged by now, so they would not have to pay higher prices for fuel. But even then, prices could rise because of the rise in other cost categories. The one that I am looking out for is labour costs. In November in the UK, for instance, workers’ earnings fell in real terms as inflation rose faster. I think it is only a matter of time before wages start rising too. 

Positives for the FTSE 100 stock

These developments could keep the travel sector tepid for a while longer, in my view. And that includes Rolls-Royce. That said, I do expect improvements in the stock this year as well. Besides civil aviation, it also has other business lines like defence and power systems, which are pretty big in size too. And as of its latest results, which admittedly were released many months ago now, the defence segment was actually growing.

So, I think there is a possibility that the company could continue to strengthen even with the rising inflation risk. But as I have been saying for a long time, I am waiting and watching for now, seeing how things play out for it rather than buying Rolls-Royce shares outright. 

Manika Premsingh 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.