A renewable energy share to buy now

The first company I like is Contour Global (LSE:GLO). The energy supplier sits in the FTSE 250. I think it’s a great share to buy now following the recent release of 2021 results. There was much to like in the report, with the business making a strong push towards renewable energy. Even though thermal energy is still the majority load for the business at 57%, renewable energy sourcing is now up to 29%. This should make it popular with ESG investors going forward.

In terms of financials, it has a policy of growing the dividend per share by 10% per annum. Given the current share price, this means the dividend yield sits at 7.28%. This is well above the FTSE 250 average, making it a top dividend share in my opinion.

Looking forward, I think the dividends should continue to grow due to profits heading higher. The raw 2021 figures are distorted by the acquisition of Western Generation in early 2021. However, adjusted revenue was still up 38% year-on-year. This allowed adjusted EBITDA to also jump by 17%.

I do think that there’s a risk due to the skyrocketing natural gas prices. Contour actually provides some energy to the wholesale market, so the concern is that some large corporate clients might default on their obligations due to the high prices.

An alternative banking option

Another option for reliable dividend income, in my opinion, is Close Brothers (LSE:CBG). The merchant bank doesn’t garner the same amount of attention as other UK-focused banks such as Lloyds Banking Group. However, it has a well-established reputation and offers a generous dividend yield of 5.47% at the moment. So when I compare it to the likes of Lloyds with a yield of 4.34%, I can see the appeal.

I think it’s a share to buy now due to the benefit that banks should enjoy in the coming year from higher interest rates. Rising rates allow the business to increase the margin made between charging for liabilities and paying out on assets.

Close Brothers only operates in certain areas of banking, but two of the main ones are deposit taking and provision of lending. Therefore, it should stand in a good position to perform well this year.

However, it does also operate in wealth management. This is becoming an increasingly competitive space, with other larger banks making this area a priority. Therefore, the risk is that Close Brothers loses market share in this area, which could also hinder deposit levels if the money gets moved elsewhere.

Overall, I think both dividend payers are worthy shares to buy now and I’m thinking of doing just that.

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Tharisa (6% dividend yield)

Platinum group metals (PGM) producer Tharisa (LSE: THS) offers very attractive value for money in my opinion. On top of that huge dividend yield, this penny stock trades on a forward price-to-earnings (P/E) ratio of 4.8 times. This is comfortably inside the widely-regarded bargain watermark of 10 times and below.

I think Tharisa’s profits could soar in the short-to-medium term because of rising inflationary pressure. Safe-haven metals like platinum tend to increase in price when inflation reduces the intrinsic value of paper money. But this isn’t the chief reason I’d buy Tharisa stock. I think it’s a great company to own as demand for environmentally-friendly technologies rapidly grows.

PGMs are used in increasingly vast quantities inside catalytic converters to clean up exhaust emissions. They’re also a critical component in the electrolysis process that produces green hydrogen. This carries plenty of potential for Tharisa as the world moves gradually away from fossil fuels. I’d buy this dividend stock even though a fresh economic downturn could hit industrial demand for its product.

Central Asia Metals (6.5% dividend yield)

Investing in mining stocks can be a dangerous business. The process of metals excavation is highly complex and a variety of problems can occur to stop production. Exploration and development work isn’t an exact science either, and issues on either front can also hit earnings forecasts hard. Mining shares can therefore experience times of extreme share price turbulence.

I still believe, though, that Central Asia Metals (LSE: CAML) — like Tharisa — looks attractive from a risk-to-reward perspective. Today the copper, zinc and lead producer trades on a forward P/E ratio of just 6.5 times. I like this particular commodities stock because it produces metal in Kazakhstan, a region where the number of people living in urban areas is rising rapidly and therefore so is demand for construction materials.

I’d also buy this stock because the metals it produces are essential in the manufacture of electric cars. This UK mining share then could see profits soar as demand for these low-emissions vehicles grow. KPMG reckons electric cars will account for around half of all auto sales by 2030.

Direct Line Insurance Group (7.6% dividend yield)

I think Direct Line Insurance Group’s (LSE: DLG) one of the most dependable dividend stocks out there. It’s been proven that spending on general insurance products remains strong even during economic downturns. This is especially the case when it comes to motor insurance, of course, given that it’s a legal requirement for drivers.

The defensive nature of its operations provides Direct Line with excellent earnings visibility and consequently the means to pay big dividends year after year. But what’s so special about this particular insurance business? Well I like the excellent customer loyalty that its heavyweight brands like Direct Line, Churchill and Privilege command. They give the company a distinct advantage. That said, they don’t remove the threat posed by competitors and this is a risk I need to take into account. 

But Direct Line’s excellent cash generation makes it one of the best dividend stocks to buy right now in my view. Not only is this enabling the insurer to pay above-average yields and to engage in share buybacks. It is also helping it to invest in its core operations and in technology to deliver growth.

ContourGlobal (7.7% dividend yield)

Power generator ContourGlobal (LSE: GLO) has the wind in its sails at the moment. In December it upgraded its profits guidance for 2021 thanks to better-than-expected performance from one of its Spanish natural gas plants. I don’t think this dividend stock’s just a great buy for today, though. I reckon it’s a good way to make money from soaring energy consumption around the globe.

ContourGlobal builds and operates power stations across Europe, Africa and Latin America. Demand for its services should hopefully grow as population levels increase and economic output in emerging markets takes off. I also like this particular energy producer because of its growing focus on renewable energy. This could help its share price rise over the long term as the theme of responsible investing takes off. 

But I’m aware that today ContourGlobal trades on a high forward P/E ratio of around 29 times. A premium share price always leaves a company in danger of sinking if earnings forecasts start to look a bit flaky. A project delay is one danger that could send ContourGlobal’s share price reversing sharply.

Bank of Georgia Group (8.3% dividend yield)

Rising interest rates mean that it might be a good time for me to think about buying some banking stocks. A higher interest rate means that banks can generate greater profits from their lending activities. But I’m not thinking about buying Lloyds, Barclays or any other UK-focused bank. I’d much rather invest in Bank of Georgia Group (LSE: BGEO).

This isn’t just because Bank of Georgia’s yield smashes those of the FTSE 100 banks either. Banking product penetration in the Eurasian country remains quite low compared with the West. At the same time the Georgian economy is tipped to grow strongly along with personal wealth levels. It’s a blend that is already supercharging earnings growth at Bank of Georgia (profits have risen 67% during the past three years, for example).

Of course, growing political instability in former Soviet territories could damage Georgia’s economic growth. But it’s my opinion that this threat is largely reflected in Bank of Georgia’s super-low share price. Today it trades on a forward P/E ratio of just 4.3 times.

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Rupert Hargreaves: Impact Healthcare REIT

Impact Healthcare REIT (LSE: IHR) focuses on buying healthcare properties in the UK. The properties are usually leased on long-term contracts with annual inflation uplifts. The firm has expanded its portfolio by around 150% over the past few years.

Thanks to this business model, Impact Healthcare has become an income champion. The stock currently yields 4.4%, and analysts expect the yield to hit 5.5% in 2022. I would buy the shares for my portfolio for these reasons.

Some challenges the firm may face include higher interest rates, which could reduce the amount of cash value for distribution to investors.

Rupert Hargreaves does not own shares in Impact Healthcare REIT.

Zaven Boyrazian: Anglo Pacific Group

Anglo Pacific Group (LSE:APF) is a royalties business that finances the development of mining sites of other companies. In exchange, it receives a portion of the materials extracted from the earth.

The firm has a stake in eight producing mines worldwide and another seven in early-stage development. Combined, they supply nine different metals, including cobalt and vanadium, which are key ingredients for electric vehicle batteries.

While the company is exposed to the risk of fluctuating commodity prices, it is currently yielding 6.5%. That’s why I think now is an excellent time to increase my position in this dividend stock!

Zaven Boyrazian owns shares in Anglo Pacific Group

Paul Summers: Somero Enterprises

At the risk of sounding like a stuck record, my top dividend stock for January – and one of my picks for 2022 – is Somero Enterprises (LSE: SOM). Offering a near-6% dividend in FY22, this quality AIM-listed company is doing exceedingly well as the infrastructure boom in the US continues. Somero manufactures laser-guided equipment to check that concrete flooring in warehouses is completely flat. 

Clearly, recent momentum could be lost in the event of a serious wobble in the global economy. At a little less than 13 times forecast earnings, however, the valuation still looks reasonable to me for the income on offer.

Paul Summers owns shares in Somero Enterprises

Ed Sheldon: Legal & General Group

My top British dividend stock for January is Legal & General Group (LSE: LGEN). It’s a financial services company that specialises in insurance, investment management, and retirement solutions.

Legal & General has put together a solid dividend growth track record over the last decade. For 2020, it paid out dividends of 17.6p per share, up from 13.4p for 2015. For 2021, the total dividend is expected to amount to 18.4p. At the current share price, that equates to a very attractive yield of 6%.

One risk to consider here is that share price volatility can be elevated at times. This can impact overall returns. I think the key is to forget about the volatility and focus on the big dividend payments, however.

Edward Sheldon owns shares in Legal & General Group.

Royston Wild: ContourGlobal  

ContourGlobal (LSE: GLO) constructs, acquires and runs power stations all over the world. And at current prices it’s one of the highest-yielding shares on the FTSE 250. A reading of 7.6% for 2022 beats the index’s broader 2% average by a massive margin too. 

Concerns over central bank rate hikes and their impact on the global economy are significant. This has the potential to drive up debt costs at ContourGlobal. But unlike most UK shares, such monetary tightening shouldn’t stop this FTSE 250 business generating big profits, in my opinion. The critical nature of ContourGlobal’s services should see to that. So I think this is a top dividend stock for these uncertain times. 

Royston Wild does not own shares in ContourGlobal.

G A Chester: Polymetal International 

Gold and silver miner Polymetal (LSE: POLY) has a high-quality portfolio of producing, development and exploration assets in Russia and Kazakhstan. It’s a FTSE 100 company, and a top-10 global gold producer and top-five global silver producer. 

Operational setbacks can be a risk with miners, but I think Polymetal’s nine producing mines mitigate the risk by reducing the adverse impact of a problem at any one. 

I’m expecting a fourth-quarter production report later this month to underpin an analyst’s consensus forecast that gives the dividend stock a P/E of around eight and a generous yield of near to 8%. 

G A Chester has no position in Polymetal International.

Roland Head: Ibstock

FTSE 250 firm Ibstock (LST: IBST) is one of the UK’s largest manufacturers of bricks and concrete building products. The company’s products are used by housebuilders, in commercial buildings and on the railway network.

Ibstock’s business has recovered from the pandemic, but its share price remains nearly 40% lower than at the end of 2019. At this level, the shares offer an attractive forecast dividend yield of 4.2% for 2022.

The main risk I can see for this dividend stock is that a downturn in the construction market could hit demand. However, management say demand remains strong. Ibstock is on my shopping list.

Roland Head does not own shares in Ibstock.

Christopher Ruane: Diversified Energy

Double-digit percentage yields are unusual, but one is offered by Diversified Energy (LSE: DEC).

The company owns over 60,000 oil and gas wells spread throughout the Appalachian region of the US. The sheer number of wells gives the dividend stock critical mass, even though many of them individually are fairly small. That enables it to generate substantial cash flows. The company pays dividends quarterly and currently yields over 10%. One risk, though, is the future cost of capping old wells. That could eat into profits.

Christopher Ruane owns shares in Diversified Energy.

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I think it’s a bit premature to get too excited, though. The ongoing public health emergency could throw up fresh surprises if new coronavirus variants emerge. Let’s not forget that infection rates are currently rocketing across much of the globe and fresh economically damaging lockdowns could be looming. Inflationary pressures are rising that could hammer consumer spending and prompt severe interest rate hikes.

I don’t think this is reason for me to stop buying UK shares, however. There are many stocks out there that I believe will have a strong 2022 despite those risks. Here are two cheap stocks I’d buy in the New Year and hold for years to come.

7.5% dividend yields

Buying shares that help electrify the planet could be a great idea as populations grow and wealth levels in emerging markets balloon. According to the International Energy Agency world energy demand is set to almost double between now and 2050. I’d buy ContourGlobal (LSE: GLO) shares to exploit this phenomenon.

ContourGlobal builds, acquires and operates power stations across the globe. It produces energy using sources like coal, natural gas, wind and hydro, but it is increasingly embracing ‘green’ technology and recently vowed not to build any more coal plants. This will allow it to exploit growing demand for clean energy from governments and industry.

I expect ContourGlobal to deliver decent profits in the coming decades, even though project slippage is an ever-present danger that can hit earnings hard. Costs can spiral and revenue forecasts can be torn up. I think its monster 7.5% dividend yield for 2022 makes it a particularly attractive renewable energy stock to buy.

Another dividend-paying UK share I’d buy

I’m thinking of bulking up my exposure to Taylor Wimpey (LSE: TW). House prices ballooned in 2021 thanks in part to the earlier moratorium on Stamp Duty payments. But I’d be mistaken if I thought this was the sole reason why property values have rocketed. Historically-low interest rates, ultra-attractive mortgage products, and continued government support via Help to Buy have also helped light a fire under home-buying activity.

Latest home price figures from Halifax prove that the housing market remains red-hot despite the return of the homebuyer tax. This showed average property values hit a fresh all-time high in December, at £254,822.

I believe, then, that owning home-building shares remains a good option for me. So buying more Taylor Wimpey shares could be a good move for me, especially at recent prices. Today it trades on a forward P/E ratio of 9.4 times. It carries a mammoth 5.8% dividend yield too. I’d buy it even though homes demand could suffer if the British labour market worsens and interest rates rise at breakneck pace.

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Here are three top-quality income stocks I’m considering buying for my portfolio.

Playing the house-price boom

I reckon housing stocks will remain rock-solid shares to own as Britain’s chronic homes shortage rolls on. Okay, interest rates are likely to rise multiple times in 2022 to curb runaway inflation. But I can’t see the Bank of England base rate rising above 1% any time soon. So I expect homebuyer activity to remain strong.

This is why I’d buy Persimmon (LSE: PSN) for my shares portfolio, even as extreme building product shortages threaten to drive up costs. Estate agent Savills recently estimated that average property prices will rise 3.5% year-on-year in 2022. I believe home values will keep rising long beyond next year too, as it’ll take some years for the country to build its way out of the supply crunch. Persimmon carries an eye-popping 8.9% dividend yield for next year.

Another generous dividend stock I’d buy

I’d also buy ContourGlobal (LSE: GLO) given the uncertain outlook for the economy. 2022 could be a tough year in the story of the global recovery as inflation soars, supply chain problems persist, and the public health emergency carries on. But this UK share — which builds and operates power stations — should remain rock-solid given the essential nature of its services.

I don’t just think that ContourGlobal’s a great buy because of its excellent defensive qualities though. I reckon its commitment to focus investment on hydro, wind and solar energy makes it a great renewable energy stock to add to my portfolio.

This is likely to reap huge rewards as lawmakers across the globe demand more and more energy from green sources. I’d buy ContourGlobal despite the ever-present threat of power plant development issues that could hit profits. This UK dividend share sports a giant 7.7% dividend yield for 2022.

8%+ dividend yields!

I believe Direct Line Insurance Group (LSE: DLG) might also be a wise stock for me to buy ahead of what could be a difficult 2022 for the British economy. History shows us that spending on general insurance products tends to remain stable, even when household budgets come under the cosh. Paying out on car insurance products tends to be even stronger too, given that driving with cover is a legal requirement.

This bodes particularly well for Direct Line as it sources around 50% of premiums from its motor arm. The remainder is sourced broadly evenly across its home, rescue and other product lines. Even though it faces intense competition, Direct Line’s excellent brand power helps to greatly offset this.

I think the insurer’s 8.3% dividend yield also makes it a particularly great income stock to buy for next year.

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Looking on the bright side, I think this reversal presents an opportunity to pick up some choice bargains. Indeed, the following two FTSE 250 shares offer dividend yields I believe are too good to miss following recent share price falls. Here’s why I’d buy them today.

An all-round FTSE 250 bargain

There’s a lot I like about ContourGlobal (LSE: GLO) today. For one, I believe it offers jaw-dropping value in terms of both earnings and income. City analysts think the power station operator’s earnings will rocket 345% in 2021.

This results in a mega-low forward price-to-earnings growth (PEG) ratio of 0.1. A reading below 1 suggests that a stock could be undervalued.

Meanwhile, ContourGlobal offers a dividend yield that makes mincemeat of the FTSE 250 forward average of 1.9%. For 2021 this clocks in at a mammoth 6.7%.

I also really like the defensive nature of ContourGlobal’s operations. Electricity is one of life’s essential commodities and the business plays an essential role in providing this. I’m also a fan of the company’s broad global footprint. This gives it exposure to fast-growing emerging markets where energy demand is poised to boom.

Finally, I think ContourGlobal’s decision to concentrate on renewable and low-carbon thermal energy will pay off handsomely as the green revolution clicks through the gears. Though project delivery problems are an ever-present threat — the construction of power plants is a highly complex process, after all — I still think the risk-to-reward profile of ContourGlobal is highly attractive.

A property powerhouse I’d buy today

HICL Infrastructure (LSE: HICL) doesn’t carry dividend yields as large as ContourGlobal. Its 5.1% yield however still packs a hell of a punch. And like the electricity generator, it has exposure to non-cyclical sectors that provide reliable revenues, whatever the weather.

HICL Infrastructure is an investment company which ploughs money into essential infrastructure projects. These include highways, hospitals, railways and schools, the sort of critical assets which produce a steady stream of income and robust cashflows.

The assets it buys up are located both in the UK, on mainland Europe and in North America too. This provides it with added strength through geographical diversification.

There’s always the possibility that HICL Infrastructure could overpay to acquire an asset, or that a project it picks up might fail to deliver on its initial promise. This could result in significant reputational damage that might, in turn, negatively impact the share price.

But I’m impressed by the company’s track record on this front and its proud history of delivering decent shareholder returns. Like ContourGlobal, I think the property powerhouse is a great FTSE 250 dip buy.

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The average forward yield on the FTSE 250 today illustrates this perfectly. The prospective average right now sits around 1.8%. This lags the historical average by almost a full percentage point. 

However, it’s still possible for dividend investors like me to find top income stocks to buy on the index. Here are what I think are two of the best FTSE 250 dividend stocks to buy right now.

7.8% dividend yields

Direct Line Insurance Group (LSE: DLG) is top of my FTSE 250 shopping list because of its mighty value. Firstly, it carries a monster 7.8% dividend yield for 2021. Secondly, it trades on an undemanding forward price-to-earnings (P/E) ratio of 12 times. I think this is a snip given the dividend stock’s industry-leading position in the general insurance markets.

Companies with strong earnings visibility are critical for those seeking big dividends year after year. This is a quality that makes Direct Line such a popular stock to buy for income chasers as spending on insurance remains stable during economic upturns and downturns. This is especially the case in the motor segment of course, where insurance cover is a legal requirement.

The FTSE 250 operator faces severe competition in all its markets, sure. But at current prices — and particularly with that huge dividend yield — I think Direct Line is too cheap to miss.

An electrifying dividend stock

ContourGlobal (LSE: GLO) is another top FTSE 250 dividend stock I’d buy today. The company, which builds and operates power stations across the globe, plans to grow dividends by 10% each year. I’m confident that the essential nature of its services and its improving cash generation will see it make good on its pledge.

Electricity demand across the world is set to keep rising strongly. Naturally, more and more power plants will be needed to service growing consumption. However this isn’t the only reason I like ContourGlobal shares.

The company has also made renewable energy a core part of its growth strategy, a savvy play as lawmakers take steps to reduce their carbon footprints. The International Energy Agency reckons green energy sources will surpass coal as the primary means of producing electricity as soon as 2025.

ContourGlobal’s share price has sunk in recent weeks. This is in spite of some terrific half-year financials released at the start of August. In my view this represents a great dip-buying opportunity as, at current prices, the business trades on a forward price-to-earnings (PEG) ratio of 0.1.

Oh, and right now the dividend stock packs a hefty 6.6% yield too. I think this is a top dividend share to buy even though its complex operations create a large range of execution risks which can impact profits.

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A top FTSE 100 stock to buy

WPP (LSE: WPP) could be one of the best FTSE 100 stocks to buy next month. The UK media share is due to release half-year results on Thursday, 5 August. And recent newsflow suggests to me that a barnstorming release could be in the works that could send its share price soaring. After all, excellent trading news from IPG lifted WPP’s industry rival to its most expensive for around 20 years last week.

The Footsie advertising agency really has the wind in its sails right now. Marketing budgets are rising at a tremendous pace as the world vaccinates itself out of the Covid-19 crisis. And so demand for WPP’s services is growing strongly.

Most recent financials in May showed the company’s like-for-like sales rise 6.3% between January and March. While WPP operates in massively-competitive markets, I think its scale, and an improved focus on digital media, should still deliver big profits in the near term and thereafter.

Another great UK share for August

Halfords Group (LSE: HFD) is one of many UK shares which is suffering from severe supply chain issues right now. A combination of global container shortages, Covid-19 travel restrictions and Brexit trade rules are causing havoc for many British companies. This FTSE 250 firm admitted that “acute” supply pressures at its Cycling division are affecting its trading outlook.

Despite these problems, I’d still buy Halfords for my Stocks and Shares ISA. Cycling in the UK is enjoying a boom right now, with leisure cycling up 60% over the past two years in certain places. It’s a phenomenon which this one-stop-shop for bikes, cycling accessories and cycle servicing is well-placed to exploit. I expect the popularity of pedal power to keep growing too, as awareness around the environment and personal health grow.

Huge government investment in cycling infrastructure and schemes like Cycle to Work, which allow workers to buy bikes and accessories at a lower cost, will also keep sales at Halfords rising nicely.

Power play

Demand for renewable energy stocks is soaring as responsible investing becomes increasingly popular. One UK share I’m thinking of buying to ride this theme is power station builder ContourGlobal (LSE: GLO).

This FTSE 250 company has commented that “we see our future in renewable energy and low-carbon thermal production” and in recent years has committed to no longer constructing coal-fired plants.

ContourGlobal currently operates 85 renewable energy assets across Europe and Latin America. And I’m expecting its geographic footprint to grow as it services the rising power needs of an increasing global population.

I think it’s a top UK stock to buy despite a broad range of significant project execution risks that can cause delays and unexpected costs.

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It’s hoped that the boost coronavirus vaccines will give to the economic recovery this year will see a huge improvement in dividend levels versus last year’s washout. However, those buying dividend shares for an immediate improvement in their income flows need to be extremely careful.

Some market commentators have sliced back their forecasts for global dividends in 2021 as the world continues to grapple with Covid-19. The emergence of the Indian variant on these shores is particularly troublesome for UK share investors.

2 UK dividend shares on my radar

The outlook for a great many UK shares remains packed with uncertainty. But there are still plenty of rock-solid stocks for investors like me to choose from today. Here are two top dividend shares I think will pay out big in 2021. I’d happily buy them in my Stocks and Shares ISA and hold them for the long haul.

#1: An safe haven in tough times

Our need for electricity remains constant, regardless of whatever economic, political or social trouble is going on in the background. This makes operators in this field like Greencoat UK Wind (LSE: UKW) dependable investments right now. Indeed, this particular FTSE 250 company’s decision to raise dividends last year despite the coronavirus outbreak provides perfect evidence of this.

Everyone knows that green energy is increasingly big business. It’s a field which I think will make this UK dividend share — a company that invests in wind farms all across Britain — a great long-term buy.

City analysts think earnings here will rise 16% in 2021. This underpins expectations of another dividend increase and, consequently, a meaty 5.4% dividend yield. Remember though that changes to green energy laws could harm later profits growth.

#2: Another great play on green power

ContourGlobal (LSE: GLO) is another UK dividend share I’m paying close attention to today. For one, its forward dividend yield of 6.5% is even better than Greencoat’s staggering reading. It also offers terrific value from an earnings perspective too. Brokers think earnings here will soar 400%-plus in 2021, resulting in a nominal price-to-earnings growth (PEG) multiple of 0.1.

This FTSE 250 stock builds and operates power stations all over the globe. Not only does this offer the same sort of defensive qualities as Greencoat, it also puts it in a strong position to exploit soaring global energy demand.

Finally, I like the company’s pledge to dedicate all future investment in renewable energy and low-carbon thermal production, as fresh acquisition news announced last week shows. I think it’s a great buy despite the ever-present threat of plant construction problems that could result in huge project delays and unexpected costs.

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Here are several quality UK (and US) shares I’m thinking of buying before 5 April’s ISA deadline.

Looking good

I think ASOS (LSE: ASC) is one of the best e-commerce stocks to buy right now. Changing consumer habits following the Covid-19 crisis and steady technological improvements means online shopping has plenty of room for growth. And this UK share is investing heavily in winning brands to make the most of this opportunity. My colleague Edward Sheldon recently commented that online-only operators who offer a multitude of brands are the big winners with fashion shoppers.

A word of warning though. City analysts are expecting earnings at ASOS to rise by healthy double-digit percentages over the next couple of years at least. These forecasts are helped by expectations that people will blitz webstores and physical stores alike with the cash they’ve saved during Covid-19 lockdowns. This is by no means guaranteed though.

A Bank of England policymaker has just predicted that as a little as 5% of these accumulated savings could be spent each year. This could have significant implications for the ASOS share price if profits growth subsequently disappoints.

Another of the best retail shares to buy

I believe Chinese business Alibaba (NYSE: BABA) is another great way investors can make money with e-commerce. The number crunchers at Statista believe China’s online retail market will grow by a staggering 8.6% between 2020 and 2024. Brazil is the only country predicted to punch stronger growth over the next several years.

Alibaba is one of the three largest e-retailers in the Asian country. This naturally makes it one of the best shares to buy to capitalise on this booming market. Sales here rose 37% in the final quarter of 2020. The company doesn’t come cheap though and trades on a forward price-to-earnings (P/E) ratio of around 30 times. Like ASOS, this could prompt a sharp share price correction if trading starts to disappoint for whatever reason.

Electrifying dividend yields

I think ContourGlobal (LSE: GLO) is another great buy for Stocks and Shares ISA investors like me following recent share price weakness. The power station operator’s fall has pushed its forward dividend yield to a mighty 6.2%. I don’t think a corresponding P/E ratio of 21 times is too excessive either, given its excellent structural opportunities.

Energy demand is expected to rocket in the years ahead and I think ContourGlobal is one of the best stocks to ride this trend. I particularly like the company’s exposure to fast-growing emerging economies in Latin America, Africa and Eastern Europe.

That said, UK energy-generating shares like this do face increasing regulatory scrutiny over the environmental impact of their operations which could damage future and existing projects.

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