2021 was a good year for several FTSE 250 stocks. But one in particular that has caught my attention is Londonmetric Property (LSE:LMP). Despite climbing 16% last year, the shares are still only trading at a price-to-earnings ratio of 5.8. Considering the average for the index is around 22.5, the company looks to me like it’s dirt-cheap.

So, what does this business do? And should I be considering it for my portfolio? Let’s explore.

An FTSE 250 e-commerce stock to buy

With non-essential stores closing their doors in 2020 courtesy of the pandemic, many consumers switched to e-commerce shopping solutions for their retail therapy. As businesses didn’t want to miss out on the opportunity, most major retailers have doubled down on their investments in establishing an online shopping presence.

But with such a rapid shift, a logistical problem emerged. I’ve previously discussed this issue but in short, there’s a finite amount of well-positioned warehousing space available in the UK. And that has created quite a favourable environment for Londonmetric Property.

The firm is a real estate investment trust. And despite what the name would suggest, its properties are located across the country rather than just London. Almost 70% of its real estate portfolio consists of logistics and distribution centres. And as demand for such facilities continues to surge, the company has had no trouble finding tenants.

As it stands, occupancy rates are currently at an impressive 98.9%, generating £130.5m of annual rental income. What’s more, several recent acquisitions of additional urban logistic centres in 2021 have further expanded the group’s portfolio. Therefore, with e-commerce adoption continuing to rise even with non-essential stores open again, I wouldn’t be surprised to see the stock price of this FTSE 250 business continue to climb throughout 2022.

Taking a step back

As promising as the low cost and high return potential of an investment in Londonmetric Property may be, there are some notable risks. The most prominent of these is the rising level of competition, I feel.

The increasing demand for prime warehouse real-estate hasn’t gone unnoticed. And with many other firms looking to capitalise on the situation, expanding the group’s portfolio in the future could prove more challenging. Why? Because the probability of bidding wars with rival firms on new property acquisitions will increase. This could lead to Londonmetric either missing out on investment opportunities or simply ending up paying too much for them. Either way, it wouldn’t be good news for the shareholders of this FTSE 250 company.

The bottom line

While the threat of rising competition is concerning, I believe it’s a risk worth taking for my portfolio, especially with such a seemingly low share price coupled with a 3.2% dividend yield. Therefore, I’m considering adding this stock to my portfolio today.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended LondonMetric Property 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.

Could these blue-chip businesses be among the best FTSE 100 stocks to buy right now?

Betting on Asia

I think getting exposure to emerging markets is a great idea for long-term investors like me. It’s why I count Unilever, Diageo and Prudential among some of my key holdings. In the same vein, I’m thinking of adding Standard Chartered (LSE: STAN) to my stocks portfolio.

Like Prudential, I’m expecting the blue-chip bank to benefit from soaring financial product demand. Rapid population expansion and a fast-growing middle class in StanChart’s Asian and African territories has supercharged banking industry expansion there.

The bank generates 70% of turnover from North and South Asia combined and operates in regional economic powerhouses including China, Hong Kong, South Korea and India.

I think Standard Chartered could have a lot to offer me in the years ahead. However, I’m keeping a close eye on news flow concerning China’s debt-laden real estate giants like Evergrande. A collapse of the country’s property market could have long and wide-ranging consequences for the bank.

Trouble at Tesco?

Some may believe that Tesco (LSE: TSCO) could be a safer buy than StanChart in the near term. Consumer spending on food is one of the most reliable economic staples. And Tesco still commands a princely position at the top of the grocery industry. That said, I worry about how competitive pressures here could significantly worsen as cash-strapped consumers increasingly shop around.

Today, Aldi announced that it attracted half a million more customers in December as it enjoyed its “best ever Christmas”. This year-on-year jump illustrates that a drive for value could be a big theme for 2022 and possibly beyond.

Tesco faces losing customers to the discounters like Aldi, Lidl and general low-cost retailers such as B&M and Poundland too. And it may have to slash product prices to stop its market share falling sharply.

With Tesco also facing increased supply chain costs, I won’t be buying the FTSE 100 grocer for my portfolio any time soon.  

A FTSE 100 stock I’d rather buy

UK housebuilders are among the biggest fallers in Monday morning trading. The likes of Persimmon (LSE: PSN) have slumped as the UK government demanded that developers and property owners pay to fix the cladding crisis. It’s been estimated that the cost of dealing with potential fire defects could run into tens of billions of pounds.

As I write, Persimmon is actually the biggest faller on the FTSE 100 today. But from where I sit, I think the builder’s investment case remains highly attractive, despite today’s announcement. I say this as someone who owns Barratt and Taylor Wimpey shares.

I’m confident that homes demand should continue to outstrip supply for a long time to come. A mix of lower-than-usual interest rates, Help to Buy equity loans from government, and intense competition among mortgage lenders should keep demand for new-build properties bubbling nicely.

Thus, I’m expecting Persimmon and its peers to keep delivering plump profits for its shareholders as they did during the 2010s.

Royston Wild owns Barratt Developments, Diageo, Prudential, Taylor Wimpey, and Unilever. The Motley Fool UK has recommended B&M European Value, Diageo, Prudential, Standard Chartered, Tesco, 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.

In 2021 the Tesco (LSE: TSCO) share price managed to grow, despite the company having its fair share of drama. The shares ended the year 23% higher than their first 2021 trading day and here I’m going to explain why that may have been the case. 

Aisles and tribulations

Tesco managed to keep its stores open throughout 2021 and this meant that it had a very strong first half. However, that’s the ‘first half’ from a financial perspective (that is, the period from March to August). The actual first six months of 2021 were riddled with issues from the perspective of the outside world. October would reveal a very healthy picture for the company yet before then, investors were spooked by all manner of unflattering news.

In February, Tesco approved a £5bn special dividend payment after disposing of its Asia business. This was accompanied by a share consolidation in which it issued 15 new shares for every 19 existing ordinary shares. The market didn’t seem to like this as the Tesco share price dropped immediately. After this, came news of supply chain issues and driver shortages. There was the Suez Canal blockage in March and Brexit-related restrictions at ports of entry throughout the year.

The Tesco share price therefore consistently underperformed between mid-February and late August. September brought some reprieve with the stock beginning to march steadily upward, but the real turnaround came in the next month.

The comeback 

As mentioned, October brought news of what was a very strong first half. Revenues were up 5.9% compared to the first six months of 2020, reaching a total of £30.4bn. This translated to £1.3bn in operating profit, a 30% increase compared to the same period in the prior year. Tesco reduced its net debt by £1.7bn and then announced a share repurchase programme of £500m. These were all positive signs that increased investor confidence. The Tesco share price began to shoot upwards at the beginning of October in light of the news. It was pretty much an upwards trajectory from there until the stock reached its annual peak at 291.25p on 30 December.

The rally was impressive and all the more so given the fact that there had been so much negative news about Tesco in the preceding eight months. The same week that the half-year earnings came out, it also made headlines on news that it had to pay £193m in settlement of its accounting scandal that happened back in 2014. It didn’t matter. Such was the impression that the earnings report made, the Tesco share price simply marched on and upwards.

Looking ahead

2021 was definitely a rocky year but Tesco managed to grow. The boost in the  Tesco share price during the last three months of the year seems to have been a fair reward for a strong first half. Tesco has revised its earnings expectations upwards and a strong financial year beckons if those final results are as expected come this March.

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

I have been looking for attractive FTSE 100 UK shares to buy for my portfolio in 2022. I am concentrating on companies with tremendous growth potential, as I think these businesses will be able to capitalise on the economic recovery over the next year.

With that in mind, here are three I would buy for my portfolio today based on their growth prospects. 

FTSE 100 growth 

The first business is the financial services and credit rating agency Experian (LSE: EXPN). This company helps corporations and consumers analyse their financial credit information and find products fitting their credit profiles.

Consumer confidence is returning as the economy is opening up, leading to rising demand for credit products. As a result, analysts expect the firm’s growth to accelerate in the next two years. The City is projecting earnings growth of 22% for the current year, followed by growth of 14% in 2023.

The biggest challenge the company is likely to face over the next few years is competition, as it is one of the three leading credit agencies. However, it does have a solid competitive advantage in the form of data. With decades of consumer data under its belt, I think the business is well-placed to continue to grow in the years ahead. 

UK shares to buy 

While Experian’s competitive advantage is its data trove, Coca Cola HBC‘s (LSE: CCH) advantage is its bottling contract across Europe with the drinks giant Coca-Cola. 

This competitive advantage essentially gives the group a guaranteed income stream. Management has been building on this solid base through acquisitions and efficiency initiatives. 

With earnings growth averaging 6.3% for the past six years, the company is hardly a growth champion. But I believe this is one of the best FTSE 100 shares to add to my portfolio, considering the competitive advantage outlined above. It may not be the fastest growing business, but gains are relatively steady and predictable. This quality is relatively rare among blue-chip stocks. 

Still, it is not immune to challenges. Some headwinds the company could face include rising wage and materials costs. These could hit profit margins and reduce growth. 

International expansion

The final FTSE 100 growth stock on my list is Entain (LSE: ENT). Over the past decade, this company has gone from strength to strength through a combination of organic growth and acquisitions.

The pandemic generated a windfall for the business, as stuck-at-home consumers turned to its online gaming platforms to pass the time. The group is using this windfall to help support growth around the world. Considering its track record of expansion, I am excited by this potential. 

That said, gambling is a highly regulated industry. It is also highly competitive. Both of these could act as headwinds to the group’s expansion in the years ahead. 

Despite these risks, I think the company’s international presence gives it scope to expand rapidly over the coming years. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Coca-Cola HBC and Experian. 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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Even a quick glance at BP (LSE: BP) shares suggests they are undervalued compared to their potential. Energy prices worldwide have rallied over the past year, buoyed by the global economic reopening and falling supply.

Thanks to rising energy prices, the company’s profits have jumped. City analysts expect the group to report a net profit of $12.5n this year, followed by nearly $13.3bn in 2022.

To put these figures into perspective, the corporation’s profits have not exceeded $10bn in a single year since 2014, when the oil price collapsed as output surged in the US shale oil boom. 

Based on this potential, City analysts believe BP shares are trading at a forward price-to-earnings (P/E) multiple of 6.8 for 2022. This appears incredibly cheap compared to the market average multiple of 14. 

At the same time, the company could also offer investors a dividend yield of 4.6% in the year ahead. 

Avoiding BP shares

However, while the stock does look cheap, I think it is worth analysing why investors might be avoiding the shares. First off, there are a couple of reasons that could explain the low valuation.

For a start, energy prices tend to be highly volatile. Oil and gas prices have jumped over the past couple of months, but there is no guarantee this trend will continue. The global shift away from hydrocarbon energy towards renewable and green energies will almost certainly impact demand for oil and gas in the long run. If BP does not change with the times, it could be left behind. 

This is another reason why the market may be avoiding the company. Asset managers around the world have been laying out plans to divest oil and gas holdings from their portfolios in response to the climate change debate. This shift has had a marked effect on the value of hydrocarbon producers worldwide. 

BP shares are no exception. 

Looking to the future 

Despite these concerns, I think the stock looks incredibly attractive. Not only does the investment appear to be undervalued compared to its growth over the next few years, but the company is also investing heavily for the future.

The group is looking to invest in and build renewable energy capacity of 20 gigawatts by 2025 and 50 gigawatts by 2030. Rising oil and gas prices will only help the organisation meet this goal.

With profits surging, the company has plenty of capital to invest in its growth initiatives. Previously, the group has relied on debt to fund growth. With profits and cash generation rising, BP can use its income from legacy oil and gas operations to grow the business for a greener future. 

This transition is the main reason why I would buy the stock for my portfolio today. BP shares look cheap compared to its potential, but there is far more to the company than its profit growth over the next couple of years. Rising profitability today should guarantee its long-term success and, as a long term investor, that is something I am incredibly excited about. 

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

The Centrica (LSE: CNA) share price has been a pretty terrible investment to own over the past five years. Excluding dividends paid to investors over this period, the stock has returned -68%.

Over the same time frame, the FTSE All-Share Index has added 6.5%. These numbers imply the stock has underperformed the wider index by nearly 75% over the past half-decade. In fact, most shareholders would have been better off putting their money in a bank savings account than investing in the business. 

However, over the past 12 months, the company’s fortunes have started to improve. Centrica has managed to shake off some of the legacy issues that have held back its growth in the past. This transformation, coupled with rising oil and gas prices, has helped improve investor sentiment towards the company.

Over the past 12 months, the Centrica share price has returned nearly 50%, excluding dividends, compared to a return of just 10% for the FTSE All-Share Index. I think this trend could continue.

This is why I am considering adding the stock to my portfolio. 

The Centrica share price comeback

Over the past five years, Centrica has struggled to compete in a viciously competitive energy market. The company, which owns the British Gas brand, was burdened with legacy employment contracts and high costs.

These restricted its ability to compete with more nimble peers such as Octopus energy, which has built its operating business around technology, a model designed for the 21st century. 

As gas prices have exploded over the past 12 months, many of British Gas’s smaller competitors have gone to the wall. The volatile energy environment exposed cracks in their business models, and they could not deal with the uncertainty. 

However, Centrica and British Gas now have the advantage as the largest supplier in the market, with established supply contracts and economies of scale.

Historically, the corporation has been able to earn higher profit margins than its competitors, thanks to these strategic advantages. As such, the current environment plays to the company’s strengths. The business has a second chance to entice consumers back to the brand. 

Despite this opportunity, the company’s potential is still limited by the energy price cap. This cap is currently set at £1,277 a year for an average customer, although Ofgem will revise it in April. Some analysts have speculated it could hit £2,000 a year, although the government and energy businesses are working to find a solution to reduce the burden on consumers. 

Growth opportunity 

In this environment, I think Centrica, with its economies of scale and trusted British Gas brand as well as diversification into products such as financial services, will prosper. Earnings are expected to rise by around 100% in 2022. Based on this growth, I think there is potential for the stock to more than double from current levels over the next year. 

Unfortunately, this growth is far from guaranteed. The price cap and volatile energy prices are the biggest challenges the company faces. These could weigh on its ability to grow over the next few years. 

Still, despite these risks, I think the Centrica share price has tremendous potential over the next few years. That is why I would buy the stock for my portfolio today. 

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

One of my main investing goals is to generate passive income. There are many ways to do this, such as buying real estate investment trusts. But perhaps my favourite way is to look for the best dividend stocks to add to my portfolio. As a UK-based investor, there are a number of dividend stocks I can choose from that are listed on the London Stock Exchange. Here are two that I think offer excellent dividend yields this year.

One of the best dividend stocks to buy

I think Legal & General (LSE: LGEN) is a top dividend stock to consider for my portfolio. It has a diversified business model, operating across insurance and investment management. Legal & General is also a member of the prestigious FTSE 100 index.

Digging into the dividend forecasts, City analysts are targeting 4.5% growth in dividends per share for 2021 (with the fourth-quarter dividend pending). This is expected to grow by a further 4.5% in 2022. This might not sound too exciting, but the shares are cheap, in my view. Therefore, if I bought the shares today, I’d be generating a yield of 6.2%. I consider this highly attractive for a dividend that is growing each year.

One further positive about Legal & General is that it’s been a dependable dividend payer over the years. The average 10-year yield has been 5.5%, which make me confident that the dividends can keep rolling in. The company was able to carry on paying a dividend through the pandemic too.

I have to keep in mind that dividends are never guaranteed. If Legal & General’s profits drop, then there’s a good chance that the dividend will be cut. But on balance, I view the company as one of the best dividend stocks to buy for my portfolio.

Another company to consider

I’d also buy Rio Tinto (LSE: RIO) shares in my search for dividends. It’s a diversified global mining company, but with a particular focus on iron ore extraction.

The forecast for the full-year 2021 dividend is a huge 15%. Rio Tinto has been able to pay bumper dividends as the iron ore price has surged. It’s fallen back now though, so I don’t expect this double-digit yield to be maintained in 2022.

In fact, analysts are forecasting that the dividend will be cut by a hefty 41% for 2022. This doesn’t sound great. But again, it should be looked at in relation to how cheap the shares are today. Even though this is a substantial cut, it would still result in a bumper forward dividend yield of 8.6%.

What’s more, Rio Tinto has been able to pay a dividend every year since 2010. The average 10-year dividend yield is a respectable 5.2%.

The likely huge dividend cut this year does highlight the risk of Rio Tinto shares. I expect any future dividend payments will be quite volatile and dependent on the price of iron ore.

Nevertheless, the still-high dividend yield makes up for this volatility. I’d buy Rio Tinto shares today, along with Legal & General, to diversify my portfolio with two of the best dividend stocks in the UK today.

Dan Appleby owns shares of London Stock Exchange, Legal & General and Rio Tinto. 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.

Rivian (NASDAQ: RIVN) stock has had a volatile start to life as a public company since its IPO last November. Indeed, after reaching highs of $172 a few days after its IPO, the electric vehicle (EV) stock has since fallen back to around $86. This is a 50% decline. As such, after this large fall-back, can Rivian stock soar or is this the start of a major decline?

Recent developments

There have been several reasons why Rivian stock has fallen so significantly recently. Firstly, the company recently indicated that production for 2021 was going to be below its initial target of 1,200 vehicles. This led to some concerns about the firm’s manufacturing capabilities, especially as it’s such a young company.

Most recently, it was also announced that Amazon, Rivian’s second-largest shareholder, stated that it would buy electric delivery vans from Chrysler owner Stellantis. Although this does not directly jeopardise Amazon’s deal to buy 100,000 delivery vans from Rivian, it does add some extra competition. Rivian’s deal with Amazon was one reason for its high valuation, and therefore, it’s no surprise that this recent development has had such a detrimental effect on the share price.

Even so, there are still plenty of positives for the EV company. For example, it recently announced a new $5bn production plant in Georgia, which should be able to assemble around 400,000 vehicles annually. This may help offset any investor worries about the firm’s manufacturing capabilities. But production at this plant is not forecast to begin until 2024.

The company’s R1T pick-up truck was also awarded the 2022 MotorTrend Truck of the Year, one of the most sought-after awards in the automotive industry. This referred to it as the “most remarkable pick-up truck… ever driven”. As such, there is hope it will have a bright future.

Long-term future

The valuation of Rivian stock is solely dependent on its future prospects. In fact, it has barely started any commercial operations, making revenues of just $1m for the three months ending 30 September 2021. In the same period, it recorded losses of $776m, mainly due to research and development costs and other general expenses. So far, Rivian only has three vehicles as well. Considering that it has a market cap of around $80bn, around the same as Daimler, it may seem somewhat overpriced.

But future demand for products seems strong and this will hopefully allow it to fulfil its potential. Indeed, pre-orders for its R1T pick-up truck recently rose from 48,000 at the end of the third quarter to around 71,000 by mid-December.

What am I doing about Rivian stock?

Right now, I’m not going to buy any shares. I feel that its $80bn valuation cannot be justified. This is especially true considering that it’s facing competition from both Tesla and Ford, which are also releasing EV trucks. Even so, future potential does seem extremely strong, and as a long-term buy, Rivian could be a top performer. This means that if it falls back further, I’ll be far more tempted, and it could be a no-brainer buy. Therefore, I’ll be keeping a close eye on the stock.

Stuart Blair 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.