That’s why I’ve recently invested thousands more into this niche under-the-radar player. So let’s talk about the copper stock that most investors are ignoring.

Massive growth potential

As a quick introduction, Ecora’s a royalties business. In oversimplified terms, it helps mining giants such as Rio Tinto and Capstone Copper cover the initial costs of getting shovels into the ground at new projects. In exchange, Ecora receives a small portion (normally 1%-2%) of the revenue generated over the lifetime of a mine.

Today, it has 23 projects in its portfolio, nine of which are already in commercial production, generating high-margin royalty income across a diversified collection of metals. This includes copper, cobalt, vanadium, uranium, steelmaking coal, and a bit of gold.

But copper’s the group’s flagship metal. And in 2026, three of its copper-producing projects are on track to ramp up production volumes considerably. And the timing’s somewhat impeccable.

With demand for copper surging to support the build-out of new energy infrastructure, electric vehicles, and AI data centres, predictions of massive supply shortages have emerged.

Just recently, the International Copper Study Group (ICSG) has estimated a 150,000-tonne deficit will surface later this year. And due to limited new discoveries, the analysts at S&P Global have estimated this could grow to 10m tonnes by 2040!

Consequently, copper prices have begun surging and have reached a new all-time record high. Needless to say, sky-high copper prices combined with production ramp ups are major positives for Ecora’s bottom line. And with other commodities in its portfolio also marching higher, 2026 looks like it’s on track to be a bumper year for this business.

What to watch

As noted, Ecora isn’t involved in any direct mining operations. So since it only gets paid for what comes out of the ground, any unexpected disruptions, such as power cuts or equipment failures, have an indirect impact on the group’s revenue stream.

Even if production runs smoothly, delays in expansion efforts or regulatory permits by operators could still prevent Ecora from capitalising on rapidly rising commodity prices. Furthermore, while most investors are focused on gold, the rise of copper hasn’t gone unnoticed by the mining industry.

Giants like Glencore are already seeking to ramp up their copper production efforts to capitalise on the price tailwind. And if demand falters or new discoveries allow supply to catch up, copper prices could start to change course.

Don’t forget, commodities are notoriously cyclical. And Ecora has seen significant volatility within its earnings over the years as a result.

The bottom line

Ecora’s far from a risk-free investment. But it’s hard not to get excited about what’s on the horizon. And with several of its development-stage projects on track to enter commercial production across 2027 and 2028, the company looks well-positioned for a sustained multi-year growth trajectory.

That’s why, despite the risks, it’s now the second-largest position in my UK-focused portfolio.

The post After already DOUBLING, is this one of the best growth shares to buy today? appeared first on The Motley Fool UK.

2025 proved to be an exceptional year for UK shares, with the FTSE 100 index delivering a total return of 23.6%. That means anyone who put £5,000 to work last January now has £6,180 sitting in the bank. That’s even better than what US stocks eked out despite them historically outperforming.

But of course, past performance doesn’t guarantee future returns. So how much money should investors expect to make in 2026?

Another stellar year for UK shares?

Through a combination of earnings resilience, interest rate cuts, and continued impressive cash flow generation, the consensus among experts is that 2026 will be another excellent year for the FTSE 100.

In fact, the combined pre-tax profits of the entire index are expected to climb from £229bn to £260bn – a 14% increase to a new record high. With this projection in mind, analysts at AJ Bell have forecast the UK’s flagship index to rise to as high as 10,750 points over the next 12 months.

Compared to where the index stands today, that roughly translates into 8.9%. Throw in the 3% dividend yield, and the total estimated return for 2026 sits at 11.9%.

Obviously, that’s not as high as what we saw in 2025. Nevertheless, it’s still notably ahead of the index’s 8% long-term average. So for investors who prefer relying on tracker funds, a £5,000 lump sum investment could grow to £5,595 over the next 12 months. But for stock pickers, the rewards could be even greater.

Which sectors could outperform?

Looking at the current macroeconomic landscape, two sectors stand out as potential big winners this year for ISA investors:

• Energy & Mining – sticky inflation and geopolitical conflicts are driving up global commodity prices.
• Financials – banks, insurance groups, and asset managers are benefiting from sticky credit margins on the lending side and steady interest rate cuts on the investing side.

One business that overlaps with both industries is Ecora Resources (LSE:ECOR). The business acquires royalty stakes in mining projects across primarily OECD countries by helping mining giants cover the initial costs of getting spades in the ground.

In recent years, management’s been aggressively repositioning its royalty portfolio to focus on critical metals such as copper and cobalt over its legacy coal-focused projects. And in 2025, these counter-cyclical investments finally started paying off with underlying earnings surging.

Looking ahead to 2026, rising secular demand (primarily from electric vehicles) is steadily pushing the price of these commodities higher. And with new projects in Ecora’s portfolio on track to enter commercial production this year, the business appears well-positioned to continue thriving even after climbing over 75% last year.

Of course, there’s always the risk that commodity prices don’t rise as expected. New discoveries or a slowdown in EV adoption (particularly in China) due to weaker economic conditions might cause Ecora to stumble.

Even if these headwinds don’t materialise, production disruptions or development delays at Ecora’s various projects could prevent the business from fully capitalising on higher commodity prices.

Nevertheless, given the explosive growth potential surrounding this niche enterprise, these are risks worth considering, in my opinion. That’s why I’ve already added shares to my portfolio.

The post In 2026, investing £5,000 in a Stocks and Shares ISA could be worth… appeared first on The Motley Fool UK.

In 2026, this upward momentum could continue. The company has implemented clever hedging strategies that mean even if the Bank of England continues to cut interest rates, profit margins will likely remain elevated throughout 2026.

With that in mind, it isn’t surprising that most institutional analysts are bullish on this business. But when zooming in on share price forecasts, the average consensus is that Lloyds’ shares will only rise to 99.5p.

That’s around 4% higher than current levels which, when combined with a 3.5% dividend yield, still suggests some respectable returns could be on the horizon. But it pales in comparison to the explosive potential of other cheap UK stocks.

Here’s one I’ve already started buying.

The hidden copper king

At the heart of technologies like nuclear power and electric vehicles lies copper. The red metal plays a massive, often overlooked, role in modern infrastructure.

But there’s a critical problem. Limited new discoveries by mining companies and a continuous upward trend in demand are translating into a global deficit that’s on track to continue expanding between now and 2035.

This trend’s already pushed up copper prices by almost 75% since July 2022. And following a recent report by JP Morgan, the copper market’s expected to get even tighter next year, courtesy of recent major disruptions to global mining operations.

But for Ecora Resources (LSE:ECOR), rising prices could send its share price flying in 2026. Here’s why.

Perfectly-timed disruption

Ecora’s a rather unique business. The group provides alternative financing to mining giants such as Capstone Copper and Rio Tinto to help cover the costs of getting shovels in the ground, in exchange for lifetime royalties.

Historically, most of its royalty portfolio has been focused on steelmaking coal. But over the last five years, management’s been repositioning itself to focus on critical base metals including copper, cobalt, and nickel.

2025 was the first time these base metals generated more than 50% of Ecora’s revenue. But looking out to 2026, this contribution’s set to grow even higher.

Several of its development-stage copper projects are on track to enter commercial production. That means Ecora not only benefits from higher prices but a significant ramp-up in copper volumes.

With this in mind, it isn’t surprising that some institutional analysts have started issuing very aggressive share price targets. This includes the team at Canaccord Genuity who thinks Ecora shares will climb to 155p by this time next year – almost 45% higher than where the stock’s trading today.

Obviously, this forecast isn’t guaranteed. Unexpected disruptions or delays at Ecora’s own royalty projects could easily result in targets being missed. Even if that doesn’t happen, a sudden drop in steelmaking coal prices could ultimately offset any gains made with copper. After all, for former still makes up a large chunk of Ecora’s income.

Nevertheless, with Ecora seemingly perfectly positioned to benefit from the long-term supply/demand dynamics of copper, it’s a risk I’ve decided to take. And it’s not the only UK stock I’ve been buying.

The post Why I’m ignoring Lloyds’ shares and buying other cheap UK stocks for my ISA! appeared first on The Motley Fool UK.

• Enormous capital is currently concentrated in AI and ‘Magnificent Seven’ stocks.
• The S&P 500 is trading significantly ahead of its historical price-to-earnings ratio average, while the FTSE 100 sits at record highs.
• Sticky inflation is driving up recession risk.
• Geopolitical conflicts are on the rise.
• The private credit markets are experiencing a steady upward trend in late payments and defaul.

That’s obviously pretty scary. Yet despite these doomsday signals, I’m still drip feeding money into both UK and US stocks. Here’s what I’ve been buying and why.

Don’t try to time the market

Hindsight is 20/20, and it’s easy to look back at previous market downturns and say: “If only I had sold/bought when prices reached the top/bottom”.

However, this often leads novice and even expert investors into the trap of thinking they can successfully time the market the next time.

The reality is, in the short term, the stock market’s near-impossible to predict. And there are countless examples of investing legends like Michael Burry or Jeremy Grantham calling for catastrophes that never materialise, resulting in massive opportunity costs.

Instead, history’s shown that the best performers are those who remain invested and continue to top up their positions if volatility does indeed rear its ugly head. With that in mind, here’s what I’m doing now.

Balancing risk with potential reward

I would be lying if I said the current investing environment doesn’t make me a little nervous. And I’ve subsequently increased my portfolio’s cash position as a hedge against potential volatility. But I’m also still deploying capital where opportunities emerge.

Even with stock markets near record highs, there are still plenty of under-the-radar bargains to explore. And one that I’ve recently taken advantage of is Ecora Resources (LSE:ECOR).

The business specialises in providing alternative financing solutions for mining enterprises, to help get shovels in the ground in exchange for a small lifetime royalty. It’s certainly a niche business. But it’s one that some of the largest mining companies rely upon, including Rio Tinto, BNP, and Vale, among others.

What makes Ecora interesting right now is the firm’s strategic pivot away from coal towards critical metals such as copper, cobalt, and nickel. 2025 marks the first year in the company’s history where these metals contributed more than 50% of revenue, on track to reach 85% by 2030.

Copper’s now the new heart of Ecora’s portfolio. And with demand expected to vastly outpace global supply over the next decade, management’s investments over the last five years are starting to pay off at an accelerating pace.

Obviously, investing even in a royalty resources business comes with risks. If the supply/demand dynamics of copper fail to materialise, Ecora’s growth trajectory could be disrupted. And even if that doesn’t happen, unexpected production delays across its portfolio of projects could still hamper progress, likely resulting in share price volatility.

Nevertheless, while Ecora shares have already more than doubled since April, they remain massively undervalued compared to this medium-to-long-term growth opportunity, in my opinion. That’s why I’ve already snapped up some shares for my own portfolio.

The post I don’t care if the stock market crashes in 2026. I’m buying bargain shares today appeared first on The Motley Fool UK.

Nobody really knows. The predicted timelines of the next major meltdown are always speculation rather than a guaranteed fact. Nevertheless, there are some real storm clouds gathering on the horizon that have me concerned, especially since lofty share prices seem to be ignoring these real threats.

Consumer spending is weakening, inflation is proving stubborn, and economic growth remains elusive. Meanwhile, in the US, similar patterns are emerging with tariffs adding complexity to monetary policy, and a recent wave of job cuts hitting the labour markets. Yet in both cases, stocks are trading near all-time highs.

With that in mind, I don’t want to be caught napping when the next stock market crash does hit. But rather than wasting time trying to predict it, I’m focused on getting ready for when it does eventually arrive.

Bargain hunting in 2025

With UK and US stocks trading at record highs, I’ve been growing more cautious throughout 2025. I’ve trimmed some of my largest positions and started building up a larger-than-normal cash cushion. Why? Because if disaster does strike, some amazing buying opportunities with emerge.

Having said that, I’ve also been doing a bit of selective shopping.

There are still some terrific bargains to capitalise on today in both markets. And here in the UK, one stock that I’ve recently added to my portfolio is Ecora Resources (LSE:ECOR).

A hidden growth opportunity

The business offers unique financing solutions to mining companies, offering to help cover the cost of initial construction in exchange for a lifetime royalty or equivalent from a mining project.

Over the last five years, management has been restructuring its royalty portfolio to be concentrated in copper and cobalt, as well as other critical materials like nickel, rare earths, and uranium.

Given that demand for these materials is expected to grow exponentially over the long run, this strategic decision seems prudent. Yet in the short term, it’s caused quite a bit of volatility in earnings, adding complexity to the financials and causing nervous investors to jump ship since 2022.

However, this restructuring process looks like it could be on the verge of paying off. With multiple development-stage projects expected to enter commercial production in 2026 and 2027, the group’s revenue and profits appear primed to surge. And at an underlying forward price-to-earnings ratio of just 13, it seems the market hasn’t noticed this incoming growth catalyst.

What could go wrong?

Despite operating in the natural resources sector, Ecora is still sensitive to economic weakness in both the UK and the US.

Lower consumer spending on items like cars, gadgets, and computers, among others, means that manufacturers’ order books will take a hit. And with lower order volumes, demand for raw materials like critical metals will, in turn, suffer.

Even if demand remains robust, if other mining entities overshoot on the supply side, commodity prices may fall, putting pressure on Ecora’s royalties.

In other words, even at a cheap-looking valuation, buying Ecora shares still carries significant risk. Nevertheless, that’s a risk I feel is worth taking given the long-term growth opportunity, discounted share price, and diversification bonus the stock offers for my portfolio as the stock market approaches a potential downturn.

The post I’m getting ready for a stock market meltdown appeared first on The Motley Fool UK.

The mining royalties and streaming enterprise has been aggressively repositioning its project portfolio over the last five years. This transition hasn’t been smooth, creating a lot of volatility in both its share price and financials.

But the firm’s now reached a stage where it’s seemingly perfectly positioned to benefit from a surge in copper prices. And with countries scrambling to decarbonise and electrify their infrastructures, analysts at S&P Global Commodity Insights have projected a massive 9.9m- tonne global supply deficit by 2035.

To put that into perspective, at today’s prices, that presents a $106.9bn growth opportunity over the next decade. And that’s assuming copper prices don’t continue to rise from here.

So why’s Ecora primed to profit from this supply imbalance? And should investors rush to buy shares before the expected surge?

Digging into the details

As a quick crash course, Ecora provides upfront funding for mining companies so they can explore potential extraction sites and get shovels into the ground. In exchange, the business then earns a small royalty from any future revenue generated from that mine.

Historically, the group’s largely invested in steelmaking and thermal coal projects. But with management seeing the long-term need for critical metals like copper, cobalt and uranium, they switched tactics and have been repositioning the royalty portfolio to capitalise on these long-term demand trends.

2025 marks the first year that copper, cobalt, and nickel will generate more than 50% of revenue instead of coal. But looking ahead, that number’s on track to reach 85% by 2030 with multiple projects preparing to drastically ramp up their production over the next two years.

In other words, the company might be standing on the launchpad of a massive surge in revenues. And there are already early signs of this happening. In its latest results, copper and cobalt delivered a massive 150% surge in revenues – a trend that management expects to accelerate in 2026.

Risk versus reward

While this early and long-term growth potential’s undeniably exciting, it’s important to recognise there’s considerable risk attached to this enterprise.

Ecora may not be doing any of the mining, but it’s nonetheless still sensitive to commodity prices. This could prove to be quite advantageous if the copper forecasts are correct.

But forecasts are never set in stone. And if demand doesn’t prove to be as strong, or supply starts to catch up, prices may not rise. They might actually fall – something Ecora has experienced first-hand numerous times in the past.

This commodity risk is one of the main reasons why Ecora’s earnings have been so volatile over the last five years. And any unexpected downturn in prices could derail the growth trajectory of this business.

Nevertheless, given the rising demand for these critical metals, it’s an opportunity worth exploring further. And if my hunch is correct (no guarantees), but Ecora could indeed be one of the best stocks out there right now. That’s why I’m seriously considering adding it to my own portfolio.

The post With a $106.9bn growth opportunity, is this one of the best stocks to buy now? appeared first on The Motley Fool UK.

In recent months the cooling of inflation, paired with a slower-than-expected economic bounce back in China, has led to mixed results for raw material prices. And two of Ecora’s flagship products, coking coal (used for steel making) and cobalt (used for electric vehicle (EV) batteries), haven’t had the best of luck.

With that in mind, it’s not surprising to see the stock drop by over 30% since September last year. Consequently, the royalty mining business currently offers an impressive dividend yield of 6.8%. But the question is, can the firm maintain this tasty payout moving forward?

Investigating a high-dividend yield

With the energy sector undergoing a massive transition toward renewables, metals like copper, nickel, uranium, and cobalt will undoubtedly be in high demand in the long run. In fact this is precisely why Ecora’s management team have been busy investing in royalty stakes of mining operations extracting these specific resources.

However, dividends may still be in danger. Despite the group’s efforts, the lion’s share of revenue continues to stem from its Kestral site in Australia. Kestral is a coking coal mine that’s expanded considerably over the years. So much so, operations are beginning to fall outside Ecora’s royalty region.

Consequently, in the next couple of years, income from Kestral will cease. And it will be up to the group’s other mining sites to pick up the slack, which at the moment doesn’t come close to covering Kestral’s contributions.

In other words, today’s high yield could very well be an income trap for my Stocks and Shares ISA.

The bull case

As concerning as the looming loss of coking coal revenue is, management still deserves some credit. The company isn’t idling, and encouraging progress is being made to secure long-term earnings.

Using the excess cash flow generated by Kestral these past couple of years, the firm has added multiple new mining sites to its royalties portfolio. The largest of which is the Voisey’s Bay cobalt mine.

While cobalt prices have fallen sharply over the last 12 months, long-term demand is set to skyrocket as more EVs enter the market. Don’t forget cobalt is a primary ingredient for lithium-ion batteries.

Furthermore, the continued diversification away from coking coal reduces Ecora’s reliance on the strength of the Chinese economy (the biggest steelmaker in the world).

At a P/E ratio of just 3.5, investors appear to be already baking in the loss of Kestral’s income into the share price. At least that’s the impression I’m getting. And with management actively working to diversify and bolster its revenue stream, the high yield may be sustainable in the long run, even if it suffers a cut in the short term.

Therefore, now could be an excellent time to add this business to my Stocks and Shares ISA, I feel.

The post Down 31%, should I buy this 6.8% yield for my Stocks and Shares ISA? appeared first on The Motley Fool UK.

With that in mind, here are two British stocks that, in my opinion, offer attractive passive income prospects.

What if UK dividend shares offered inflation-adjusted returns?

One of the primary catalysts behind the ongoing stock market correction was the spike in inflation, especially in regard to energy bills. But what if there was a way to profit from the surging electricity bills? That’s where Greencoat UK Wind (LSE:UKW) comes into the picture.

The company owns a portfolio of onshore and offshore wind farms scattered across the UK. The business model is simple:

1. Acquire a stake in a wind farm
2. Let it generate clean electricity
3. Sell that electricity to the national grid through a long list of corporate clients

The proceeds are then distributed to shareholders through an impressive 4.6% dividend yield that management automatically increases in line with the retail price index – a proxy for inflation.

With fixed operational costs, the rise in electricity prices has translated into almost pure profit. So it’s not surprising that in the last six months underlying earnings exploded from £128m in 2021 to £566m at a 97% profit margin!

These elevated prices obviously won’t last forever. And when regulators inevitably reduce the price caps, they could stay that way for a prolonged period as they have done in the past. Needless to say, that wouldn’t be good news for the shares of this UK dividend group.

Regardless, I feel it’s a risk worth taking. The skyrocketing earnings grant management a lot of flexibility to improve the balance sheet’s strength and reinvest for long-term growth. And that’s why I recently added some shares to my income portfolio.

Earning a passive income through royalties

The mining sector is not short on UK dividend shares offering impressive payouts. But one from my portfolio that continues to be my favourite in this space is Anglo Pacific Group (LSE:APF). It’s a royalties business that funds mining companies to establish a new extraction site in exchange for some of the dug-up materials.

Historically, the bottom line has primarily been driven by its coal assets. And that’s still true today. However, management has long since been reducing its dependence on the material by diversifying its product portfolio. Lately, it’s been hyper-focused on adding more cobalt, nickel, and copper projects to help meet the demand for electric vehicle batteries and renewable energy technologies.

Mining is a cyclical industry. And while Anglo Pacific may not be doing any drilling, it’s just as susceptible to fluctuating commodity prices. We’ve already begun to see some raw materials drop on fears of a recession. And one of its most lucrative coal mines is coming to the end of its life within the decade.

Those risks can’t be ignored. But management seems to have a sound strategy for replacing the eventual revenue loss. And with global cobalt supply highly restricted, I believe these UK dividend shares offer an attractive long-term source of income at a 4.5% yield. That’s why I’m considering topping up my current holdings.

The post Forget income bonds! I’d buy these 2 high-yield UK dividend shares appeared first on The Motley Fool UK.

With that said, what are some of the best income stocks for my portfolio today? Let’s explore my favourites.

Becoming a renewable energy baron

When investing in dividend stocks, I’m drawn to the companies I believe will remain relevant for at least the next 10 years. And I think it’s fair to say that electricity will still be in demand a decade from now.

Most of the electrical grid is powered by gas turbines in the UK. Yet renewables are starting to become a more significant contributor. And that makes Greencoat UK Wind (LSE:UKW) rather promising, in my opinion. This business owns a vast network of on- and off-shore wind farms generating clean electricity.

It’s not a risk-free investment, of course. Being a real estate investment trust, most of the profits are returned to shareholders generating a 4.7% yield today. But that means there’s little capital left for reinvestment and, consequently, management has loaded up on debt over the years. With interest rates rising, profit margins will undoubtedly get squeezed, potentially compromising the passive income stream.

Having said that, net profit margins currently stand at a massive 86%. Therefore, I think Greencoat can absorb this increased pressure without much trouble. And that’s why it’s number one on my list today.

Generating passive income from e-commerce

The rise in popularity of online shopping continues to trend upward, even with the pandemic no longer keeping brick & mortar stores shut. But e-commerce is creating a big problem regarding logistics that Warehouse REIT (LSE:WHR) is trying to solve.

The business owns and leases a network of warehouses across the UK, predominantly to large online retailers like Amazon. With demand for well-positioned facilities on the rise and the supply quickly running out, Warehouse REIT has consistently increased rent, boosting dividends to a 4% yield today.

It’s far from the only player in the space. And the rising level of competition is making the acquisition of new prime locations more challenging. However, with an occupancy rate of 93.5% and average lease duration steadily rising over time, I think Warehouse REIT could be a fine addition to my passive income portfolio.

Digging for 21st-century metals

As the world slowly transitions to eliminate carbon, technologies like renewable energy and electric vehicles (EVs) are rapidly being adopted. But it’s creating a supply problem for battery metals such as cobalt, copper, and vanadium. This has proven to be quite advantageous for Anglo Pacific Group (LSE:APF). The mining royalties business has an equity interest in 15 sites worldwide, eight of which are actively producing.

Commodities are indeed notoriously cyclical. And that’s a pattern which is unlikely to change anytime soon. As such, the bottom line has been wobbly over the years, leading to an equally wobbly dividend.

However, despite this risk, I don’t see demand for battery metals disappearing anytime soon, especially now that more EV manufacturers are entering the picture. Hence why this stock is on my passive income investment list today.

The post How I’d build passive income for life with these 3 UK shares appeared first on The Motley Fool UK.

Edward Sheldon: Unilever

My top income stock for May is consumer goods company Unilever (LSE: ULVR). Analysts expect it to pay out €1.71 in dividends for 2022, which equates to a prospective yield of around 3.9%.

There are a couple of reasons I like Unilever in the current environment. The first is that the company is relatively recession-proof. People tend to buy its every-day essentials like soap and cleaning products irrespective of economic conditions. The second is that, due to its strong brands, the company has the ability to raise its prices. This should offer protection against inflation.

Of course, with inflation so high, the company could still face challenges. However, with the stock trading at 18 times this year’s expected earnings, I like the overall risk/reward.

Edward Sheldon owns shares in Unilever

Zaven Boyrazian: Anglo Pacific Group

Anglo Pacific Group (LSE:APF) is a global royalty mining business with a diverse portfolio of natural resources. Today, the company has eight extraction sites scattered across the world, producing primarily cobalt, vanadium, copper, uranium and coking coal (used in steelmaking).

Mining is a cyclical industry, which can lead to prolonged periods of poor performance when commodity prices fall.

However, management is aggressively transitioning its portfolio towards metals essential to renewable energy technology. And since demand, in my opinion, is unlikely to disappear any time soon, I believe Anglo Pacific Group will continue to reward investors with sizable dividends for many years to come.

Zaven Boyrazian owns shares in Anglo Pacific Group.

Roland Head: Burberry

I’m choosing luxury brand Burberry Group (LSE: BRBY) as my income stock for May. This FTSE 100 firm is now trading at levels not seen since the 2020 market crash.

I think that’s probably too cheap for a business with a track record of high profit margins and long-term growth. As the pandemic recedes, broker forecasts suggest profits could hit record highs next year.

Changing shopping habits in China are a key risk. But Burberry’s dividend hasn’t been cut for 20 years and the stock’s forward yield of 3.2% is above its long-term average. I can see value here.

Roland Head owns shares of Burberry Group.

Paul Summers: IG Group

Online trading platform provider IG Group (LSE: IGG) is my pick. I think it remains a decent way of hedging against market volatility. 

It’s also a great source of dividends. IG is forecast to yield almost 7% in FY23 (which begins at the start of June). This payout is also sufficiently covered by expected profit. When combined with a very solid balance sheet, this makes me think a cut is unlikely. 

While ongoing regulation of its industry remains a risk, I think this is already priced in. Available for just 8 times forecast earnings, I am strongly considering buying more.

Paul Summers owns shares in IG Group

Andrew Mackie: Aviva

My top income stock for May is Aviva (LSE: AV). When I invested in the company, I certainly did not do so in anticipation of stunning growth. But I have always viewed it as a sleeping giant given its sector-leading brand.

With a new CEO in place who has cleared out a lot of the dead wood from its portfolio, the dividend is now starting to climb again.

In 2022, it has forecast a dividend payment of 31.5p per share. At today’s share price, that equates to an inflation busting yield of 7.5%. Further, it expects the dividend to grow to 33p in 2023 and by low-to-mid single digit in subsequent years.

Andrew Mackie owns shares in Aviva.

Royston Wild: National Grid 

Now could be a good time to buy for me to buy utilities stocks as market volatility increases. Shares like these might rise in value in May as concerns over more cyclical shares gather steam. 

FTSE 100 power grid operator National Grid (LSE: NG) is one such share on my watchlist. I like it because the essential services it provides delivers excellent profits stability at all points of the economic cycle. 

I also like National Grid because it has a monopoly on maintaining the electricity grid. A consequent lack of competitive pressure provides earnings forecasts with extra strength. 

Today, National Grid carries a healthy 4.5% dividend yield. 

Royston Wild does not own shares in National Grid. 

G A Chester: Unilever 

Historically, it’s rare for consumer goods giant Unilever (LSE: ULVR) to be on offer with a dividend yield above 4%. But that’s currently the case. 

The group’s trusted brands — the likes of Lifebuoy, Domestos, Ben & Jerry’s, and Hellmann’s — tend to generate relatively reliable cash flows through the economic cycle. The combination of this ‘defensive’ quality of the business and the current yield makes Unilever my top income stock right now. 

The market is concerned about what the company concedes is “unprecedented cost inflation,” but so far management has successfully countered this with pricing action. 

G A Chester has no position in Unilever. 

The post Top British income stocks for May appeared first on The Motley Fool UK.