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The Ocado (LSE: OCDO) share price was one of the big winners of the pandemic. Unfortunately, it has been unable to sustain the performance achieved in 2020, when the stock returned nearly 100%.

But last year, shares in the online supermarket group lost a third of their value. Following this performance, the Ocado share price has only returned 30%, a relatively disappointing performance considering its growth over the past couple of years. 

However, it appears as if the outlook for the group is improving. Not only is the company continuing to capitalise on rising demand for its services in the UK and around the world, but it is also making progress in a vital legal battle in the United States. 

Legal progress 

The company has been caught up in a legal spat with Norwegian rival AutoStore. The Norwegian corporation accused its UK peer of infringing its patents for automated processes in fulfilment centres. 

But now, the International Trade Commission has concluded that most AutoStore’s legal claims are spurious. This ruling is not legally binding, but it does mean Ocado will have the upper hand in any further legal battles. 

This has removed a significant dark cloud from over the Ocado share price. If there is something the market hates more than anything it is uncertainty. Doubts surrounding the future of the company’s technology was one of the main reasons investors gave the business a wide berth last year. It now looks as if this risk is starting to recede. 

At the same time, it seems that the company is well-placed to continue its growth in the UK grocery market in 2022. Despite some disruption at its automated fulfilment centres, customer order numbers each week were up 9% in the 13 weeks to 28 November. A 22% rise in active customer numbers is helping support this growth. 

Ocado share price growth 

Research from the company shows that when customers migrate to its platform, they tend to stay. As such, I am optimistic the increase in active customer numbers will translate into further revenue growth this year. 

Management is not waiting around for customers. The company is investing £50m more than expected in new facilities. It expects mid-teens sales growth in 2022 as it opens a new automated warehouse in Bicester, Oxfordshire. 

Considering all of the above, I think the outlook for the Ocado share price in 2022 is exciting. However, I will be keeping an eye out for a couple of risks. These include rising costs and inflationary pressures, which could impact customer demand.

The corporation may also have to spend more than expected developing new facilities, which could hold back profit growth. If these facilities do not produce the sort of returns management is looking for, the market could begin to punish the stock for wasting money. 

Still, despite these risks, I would be happy to buy the shares from my portfolio today, considering the company’s outlook.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Ocado 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.

I am always looking for UK shares to add to my passive income portfolio. As well as high growth stocks, I own a portfolio of income shares to produce a steady stream of dividends to support my regular income. 

As we begin 2022, I am looking for new stocks to add to this portfolio. And there are a couple of corporations that have recently caught my attention. I would buy all of the company’s outlined below for my portfolio.

UK shares for income

The first on my list is the infrastructure investment group 3i Infrastructure (LSE: 3IN). This company owns a portfolio of infrastructure assets around the world. This is a great asset to hold as an income investment because related contracts are usually multi-year and inflation-linked. This gives the enterprise a high level of visibility over future cash flows. 

These qualities, as well as the company’s progress in seeking out new investments, have helped it increase its dividend at a compound annual rate of 6% over the past six years. 

Of course, past performance is no guarantee of future potential. But considering the company’s attractive qualities, I think there is a high chance this growth could continue. At the time of writing, this stock offers a dividend yield of 2.9%.

Issues the group could encounter include higher interest rates. These could lead to higher costs, reducing the amount of cash available for distribution to investors. 

Passive income growth

Also on my list is 4imprint (LSE: FOUR), which designs and manufactures promotional marketing material. Unfortunately, this has been a complicated business over the past two years.

During the pandemic, companies have been forced to greatly reduce the number of face-to-face marketing activities. Consequently, the demand for promotional products has declined. Revenues dropped from $861m in fiscal 2020 to $560m in fiscal 2021. 

However, a rapid recovery is expected over the next two years. City analysts have pencilled in revenues of $904m for the 2023 financial year. Profits are also expected to rebound, and so is the firm’s dividend. 

Analysts believe the stock will yield 1.5% next year. That might not seem like much, but 4imprint’s balance sheet is stuffed full of cash, and there is plenty of headroom for further growth in the years ahead. This potential is the main reason I like the look of the company for my passive income portfolio. 

Challenges it could face going forward include competition and additional pandemic restrictions. These headwinds could curb growth. 

Income from property

One of the top UK shares for passive income, in my opinion, is Big Yellow (LSE: BYG). Thanks to its steady profit growth, this self-storage company has become an income champion over the past decade. As management has reinvested profits back into the business, it has grown rapidly, with book value up more than 100% since 2016. 

As Big Yellow’s property portfolio has expanded, the organisation’s income generation has increased. Management has been able to hike the firm’s dividend to investors by 100% since 2016. The stock currently yields 2.3%. And with further development opportunities planned over the next couple of years, it seems likely this payout will continue to grow as it grows. 

Some notable challenges the group may encounter as we advance include higher interest rates, as it relies on debt to fund expansion initiatives. Higher rates could lead to increased interest costs, reducing the amount of cash available for distribution. 

International expansion

Some of the best UK shares for income, in my opinion, are international growth stocks. HSBC (LSE: HSBA) is one of the best examples. 

The Asia-focused bank is one of the world’s largest banks, and as interest rates begin to increase, I think it has fantastic potential for the next few years. As the global economy also begins to recover from the pandemic, the group should have plenty of opportunities to expand its footprint and increase lending to customers. 

These twin tailwinds may help the business’s bottom line expand rapidly in the years ahead. And HSBC has always been one of the best UK shares for income, which suggests that, as the group’s bottom-line grows, it could increase the dividend to investors. 

At the time of writing, the stock offers a dividend yield of 3.6%. City analysts are expecting payout growth of 20% in 2022, implying the shares could yield 4.3% next year. As well as this income potential, HSBC has also been returning cash to investors by repurchasing shares. These are the reasons why I think the stock is one of the best passive income shares to buy. 

Unfortunately, the company’s growth is far from guaranteed in the years ahead. Risks it could face include further pandemic restrictions and a deterioration in relations between China and the United States, which may hit global trade flows. 

UK shares for income and growth

Moneysupermarket.com (LSE: MONY) is one of my top UK shares for passive income generation and earnings growth. It also looks incredibly cheap at current levels. 

The company, which operates online comparison sites, is currently selling at a forward price-to-earnings (P/E) multiple of just 15. This reflects uncertain market sentiment towards the business. Regulatory changes have hurt the outlook for the comparison market, and it is unclear how much of an impact these changes will have on the corporation’s bottom line. 

Still, I am happy to look past these headwinds and buy the stock. As well as the cheap valuation, the stock also supports a dividend yield of 5.1%. It has a cash-rich balance sheet and robust profit margins, suggesting it can sustain a higher than average dividend yield. 

As well as this income potential, there is also scope for a valuation re-rating. This could provide both income and capital growth in my portfolio of UK shares. 

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended 4imprint Group, HSBC Holdings, and Moneysupermarket.com. 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 looking for stocks to provide a high, sustainable income. One sector that interests me is UK Real Estate Investment Trusts (REITs). These property-owning companies receive tax benefits in return for paying out most of their income as dividends.

These three REITs have an average dividend yield of 6.7%. I’m considering buying them to boost the passive income from my share portfolio, although I always have to bear in mind that the yields aren’t guaranteed.

The best retail opportunities?

Shopping centres were struggling even before Covid hit the sector. However, out-of-town retail parks and community shops such as mini supermarkets have recovered quicker and now appear to be performing quite well. NewRiver REIT (LSE: NRR) has a £700m property portfolio that’s built around these types of location.

This business isn’t without risk. Debt levels reached uncomfortable levels last year, leading to property sales to fund repayments. NewRiver’s dividend was also cut during the pandemic.

However, I’d argue that NewRiver’s current share price is low enough to reflect these concerns. The stock currently trades at a 30% discount to its book value of 131p and offers a forecast dividend yield of 7.4%. For these reasons, this UK REIT is a stock I’m considering for a passive income.

Healthcare properties with long-term incomes

My next selection is Target Healthcare REIT (LSE: THRL). This £730m business owns a portfolio of 79 care homes across the UK. The average remaining lease on these properties is 28 years, giving Target great long-term visibility of cash flows.

This REIT is continuing to expand too. Target Healthcare spent £173m on new investments during the final quarter of last year, acquiring 18 care homes and a new-build site.

The company’s properties look pretty safe to me. They generally have long leases and inflation-linked rents. The main risk I can see is that some UK care home operators have struggled to make money in recent years. If Target Healthcare’s tenants run into problems, rental rates might fall.

On balance, I’m attracted to Target Healthcare’s long-term business model. The stock also offers a forecast dividend yield of 5.8% for the current year, making it one of the highest yielders in the property sector.

A UK REIT for industrial property

My first two choices cover retail and healthcare. The other part of the economy where I’d like to own property is the industrial sector. My final pick, AEW UK REIT (LSE: AEWU), owns a mix of UK commercial properties with a bias towards industry.

Around 55% of AEW’s portfolio is made up of industrial units in regional locations. The remainder is made up of office and retail property. Although there’s a small overlap here with NewRiver, I’d be happy to own both of these REITs to gain greater exposure to the industrial sector.

My main concern here is that AEW’s average unexpired lease length is just four years. Its strategy is to buy properties with short leases and then target higher rental rates. This has worked well in recent years, when demand has been strong. However, I think it could be tougher to raise rents during a recession.

For now, the economic outlook still seems healthy. AEW recently reported stable half-year profits and confirmed it plans to pay a dividend of 8p per year. That gives it a tempting 7.1% dividend yield at current levels.

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

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I want my passive income stream to be truly passive. This should mean I don’t have to put in extra hours of work, and that my investments work for me all year round.

Real estate might not be a first choice for someone looking to generate passive income. A rental property would require the management of tenants, potential repairs, and other tasks, so I don’t consider this to be truly passive.

But there’s another option I could use to invest in the property market. Let’s take a look at how I can generate passive income using real estate investment trusts (REITs), and what ones I’m considering for my portfolio.

Real estate investment trusts

REITs are investment companies that own and manage a portfolio of real estate. For a company to be classified as a REIT, it must pay out at least 90% of its taxable income to shareholders. REITs also have preferential taxation as business profits are exempt from tax. This combination can lead to attractive dividend yields for investors like me.

There are other benefits to investing in REITs in my portfolio. I can buy shares of a REIT just like any other company trading on a stock exchange. In doing so, I can buy and sell my real estate investments much easier than physical rental property. However, this comes with added risk as my REIT shares will be more volatile, just like other equity investments.

Growing my passive income

I’ve been screening for potential REITs to generate passive income. There has been a divergence in performance during the pandemic in that retail and leisure REITs have underperformed while specialist property sectors such as industrial and warehousing have surged in price.

With this in mind, a retail and leisure REIT that looks good value today is NewRiver. Its recent half-year results showed that business conditions are improving and the dividend is being increased.

In the specialist property sector, Tritax Big Box, Urban Logistics, and Warehouse are all REITs I’d consider for my portfolio to generate passive income. I think these companies are well positioned to take advantage of the growing e-commerce industry as they manage prime warehouse and logistics centres.

I also like the look of Supermarket Income REIT, which manages a property portfolio that is rented to established supermarket brands. It aims to provide shareholders with an inflation-linked income stream. With the prospect of rising inflation in 2022, this REIT may help to protect my income stream.

With any investment there are always risks to consider, and REITs are no different. As mentioned, shares of REITs can be volatile as they trade on a stock exchange like any other company. Any REIT that I buy must remain profitable for it to pay out at least the 90% of its taxable income too. So any repeat of a Covid-related lockdown may reduce my passive income from REIT investments.

But on balance, I’m considering buying REITs for my portfolio to diversify my passive income.

Dan Appleby has no position in any of the shares mentioned. The Motley Fool UK has recommended Tritax Big Box REIT and Warehouse REIT. 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.

Thinking a UK share’s cheapness is related to its investment quality is a mistake that many novice investors make. The saying “mighty oaks from little acorns grow” applies to investing just as it does to other aspects of our lives. Those who sniff out low-cost stocks have a chance to make a fortune with the right strategy.

Take Ashtead Group investors, for example. Those who bought the rental equipment company’s shares for around 230p a decade ago would have made a colossal profit in that time. The business now trades on the FTSE 100 for around £60.60 a share.

I think the following cheap UK shares could also soar in value over the next 10 years. Here’s why I’d buy them for my own stocks portfolio.

Glencore (trades at 388p)

Glencore’s another FTSE 100 share I’m thinking of adding to my shares portfolio alongside Ashtead. This is even though rapid economic cooling in China is causing me some nervousness. I think profits here could potentially rocket as demand for electric vehicles and investment in renewable energy technology both grow. Goldman Sachs analysts think copper could average $15,000 a tonne in 2025. That compares with $9,680 today.

The copper that Glencore produces is critical in the construction of these new-age technologies. So is the lead, zinc, nickel, cobalt and other metals and minerals it hauls from the ground. It’s my belief that these opportunities offset the possibility that its coal and oil businesses could suffer as concerns over the climate crisis increase.

Assura (trades at 69p)

I think Assura Group could be one of the best safe-haven stocks to buy for the next decade. Even if broader economic conditions are weak, it can expect demand for its services to remain robust. This property business develops, acquires and rents out primary healthcare facilities in the UK, essential facilities that tie occupiers down to long leases.

Supply of medical properties like these is relatively restricted, supporting strong rents at Assura and its peers. I think the long-term outlook for this sector is rock-solid as Britain’s population steadily ages and the need for healthcare services subsequently rises. I’d buy this penny stock even though a shortage of attractive acquisition opportunities could hit profits growth.

Direct Line Insurance Group (trades at 284p)

Direct Line Insurance Group has a long track record of paying above-average dividends. And for 2022, this cheap UK share boasts a brilliant 8.2% dividend yield. Its exceptional cash generation and the immense pulling power of its brands such as Direct Line, Churchill and Green Flag gives it the firepower to shell out such massive rewards. The FTSE 250 firm’s ultra-defensive operations also give it the confidence to pay big dividends, even when broader economic conditions worsen.

Its true that Direct Line Insurance Group operates in an ultra-competitive industry that threatens profits. It also faces rising claims costs as the climate change emergency worsens. But it’s my opinion that the potential rewards on offer make up for these risks. 

Royston Wild owns Ashtead Group. 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.

Last year, the FTSE 100 posted its best year since 2016 as UK stocks rallied from the Covid-induced lows of 2020. The increase of around 14% during 2021 was largely due to economies benefiting from  stimulus measures from governments and central banks.

It closed just below 7,400 on New Year’s Eve and I think there’s a strong possibility that the index could head towards its May 2018 all-time high of 7,900 at some point in 2022.

First, we have some of the highest Covid vaccination rates in the world. Second, the flagship UK market index has underperformed many others in the developed world. Third, the index is rich in companies operating in sectors that could surge this year such as banking, pharmaceuticals, and energy.

The ETF

An ETF (exchange-traded fund) is a fund that tracks an index or sector and can be bought and sold like a share through most online brokers.

For my portfolio, I think that an FTSE 100 index ETF offers me the best chance of participating in any rally since it offers me access to all the companies in the index by just holding one share.

There’s a lot of choice when it comes to a FTSE 100 ETF and the fund I’ve selected for my own portfolio is iShares FTSE 100 (LSE: ISF). By size, it’s the largest at over £10bn, It’s among the cheapest with an ongoing charge of 0.07% and is consistently one of the most popular ETFs in the UK.

One of the benefits of the FTSE 100 is that there are so many established, large companies in the index paying dividends. Although there’s a choice of whether to have the accumulation option or the dividend-paying option of this ETF, for my own portfolio I prefer the latter. Currently, the dividend yield is 3.71%.

The risks

The risks to this ETF reflect those to the FTSE 100 generally.

In my mind this is threefold. First, persistent inflation and any interest rate rises that could ensue. Second, supply chain disruptions still have the potential to hurt firms’ earnings. Finally, we are not out of the woods with Covid. Despite high vaccination rates, new variants could cause a downturn.

For 2022?

As Charlie Munger said in the 2021 Berkshire Hathaway shareholders meeting, “If you’re not a little confused by what’s going on, you don’t understand it”. That’s how I feel. There’s so much uncertainty out there, it’s difficult for me to position myself.  

Despite this, I’m still largely bullish about this ETF and the FTSE 100 index as a whole, largely because of the wide diversity of sectors and companies included in the fund.

If interest rates rise, banking shares could do well. If commodity prices rise, miners and oil companies might rally. A further lockdown might see the supermarkets outperform.

Therefore, on balance, going into 2022 I’m still comfortable holding a small allocation of this ETF among my holdings as part of a diversified portfolio.

Niki Jerath owns shares in iShares FTSE 100. 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.

If I was just starting out and considering investing in the stock market for the first time, there would be a lot to think about. But in my opinion, things can be simplified significantly by stripping out a lot of potential complications. With that in mind, if I had a pot of £2,000 that I aimed to deploy in the best stocks at the moment, here’s what I’d do.

Thinking about the main goal

I’d first decide on my ultimate goal for my investments. There isn’t one company that I’d hail as the best stock to be the right answer to all of my goals. Rather, different stocks will appeal to me depending on what I’m trying to achieve.

For example, let’s say that my aim is to try and invest in the best stocks to beat inflation over the long run. Inflation is currently running at over 5%, but in the long term, the average rate has tended to be closer to 2%. With this aim, I can filter for stocks with share price gains of more than 2% consistently over the past few years.

If I want to be conservative in this way, I can also filter out very volatile shares. I need to remember that sometimes the perfect stock doesn’t always exist, but I can try and fit companies in as best as possible.

Having some funds spare 

I’ll allocate most of my £2,000 straight away in the stocks I like. Yet I wouldn’t invest it all in one go, as having some liquid cash can help me to take advantage of other opportunities as they arise.

For example, my research might flag up a company that has seen its share price plummet in 2021. CMC Markets is a good example that I wrote about recently. I think that the company is now undervalued and has a bright outlook for 2022. So with some of my funds, I’d consider buying shares in the company right now.

Being flexible and leaving some of the £2,000 in cash allows me to take advantage of these options. It also helps should we experience another stock market crash in the next few months. A significant downward move in the best stocks can give me a great entry point for the long term.

Keeping it simple and not panicking

The final point when investing for the first time is to note that I don’t need to panic if things don’t go to plan. A good example of this was the stock market crash in 2020. I could have got myself in a real pickle by trying to over-complicate things and panic-selling or panic-buying through March. Rather, if I’d simply been patient and adopted a long-term approach, I’d have seen the market as a whole bounce back strongly. 

There’s a lot to think about when investing for the first time. Getting started is usually the hardest thing to do, but once I’m up and running, I can let my investments do the hard work! 

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

A lot has been said about Tesla and how it’s going to be the number one electric vehicle (EV) company. It has a market value of over $1trn, so there’s already a lot of success baked into the share price in my view. But is Ford (NYSE: F) stock a better buy for my portfolio to profit from this booming sector? It could well be after it surged on news that the company plans to almost double production of its electric F-150 Lightning.

I’ve commented before that Tesla’s valuation is too rich for me to buy its shares. I can’t say that about Ford, though. Let’s take a look at the stock in more detail.

The bull case for Ford

The doubling of F-150 Lightning production is a good sign for the company’s prospects in the growing EV market. The target now is for 150,000 electric trucks to be made by 2023, well above the prior target of 80,000. What’s more, this is due to accelerated demand for the F-150 from consumers reserving the truck. I view this as a bullish sign for Ford stock.

It’s not surprising to see Ford being able to double its EV production capacity. Only in September, the company announced it was going to lead America’s shift to electric vehicles. To do so, Ford has committed $11.4bn to build a mega campus and battery plants in the US.

This is significant, because it’s an established carmaker with expertise in how to mass-produce vehicles worldwide. Ford delivered almost 4.2m vehicles in 2020 (final numbers are pending for 2021), while Tesla delivered a far smaller 500,000. Now, Tesla’s production numbers are growing, but it remains a smaller player. If Ford can accelerate its EV production line then it may also see a huge boost in its stock price, as Tesla has in recent times.

What are the risks?

Ford has actually been a terrible investment for shareholders until last year. The stock peaked at almost $18 in 2014, and didn’t regain this price until November just gone. It was generally regarded as an ex-growth blue-chip company. Therefore, there’s a lot riding on the success of its EV business for the stock to rally further.

I’m also not too keen on some of the company’s metrics. It achieves a small gross margin in the low teens that has been falling for a number of years. It hasn’t been able to generate significant returns on its capital. Of course, I have to keep in mind that this is a manufacturing company, so these values are generally small anyway.

Should I buy Ford stock?

It clearly could become a major player in EVs. But taking everything into account, I’m going to wait a little while longer before I think about buying some shares. Ford still has considerable investment ahead to pivot its legacy manufacturing business to electric, so I’ll wait for further updates to gauge progress. There are other EV stocks I can consider in the meantime.

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.