Platinum play

Gold stocks aren’t the only game in town for investors looking to seize upon soaring previous metal prices. Purchasing shares in platinum group metal (PGM) producers is another potential play to look at as prices here also take off.

Gold prices have risen 45% in value over the last year. Platinum, meanwhile, has risen 47% over the period. And it could be due for further significant gains as metal supply falls.

According to the World Platinum Investment Council, total platinum supply will slip to five-year lows in 2025. With jewellery demand growing and investment interest also rising, the organisation expects the market to record an 850,000-ounce deficit this year.

Purchasing platinum stocks like Sylvania Platinum (LSE:SLP) can be a more profitable way of capitalising on appreciating metal prices than physical metal or a metal-tracking fund. This South African miner’s 75% share price rise over the last year illustrates this theory.

Miners enjoy a ‘leverage’ effect, where revenues rise alongside commodity prices while their costs remain largely stable. This can lead to supersized profits, as indicated by the 118% year-on-year EBITDA increase Sylvania enjoyed in the last financial year (to June 2025).

Be aware that the ‘leverage’ factor can also mean earnings can nosedive if metal prices reverse. But right now I think this phenomena should continue working in the company’s favour.

City analysts share my optimism, and expect earnings to almost double in the financial 2026. Forecasts are also boosted by company plans to boost full-year platinum, palladium, rhodium and gold — the so-called 4E grouping — to between 83,000 and 86,000 ounces from the record 81,002 last year.

This also means brokers expect the annual dividend to soar to around 4p per share this year from 2.75p last year. That leaves Sylvania Platinum carrying a healthy 5.2% dividend yield.

A FTSE 100 favourite

BAE Systems (LSE:BA.) doesn’t offer this sort of high dividend yield over the near term. For 2025 and 2026, they sit at 1.8% and 2%, respectively.

Yet the prospect of more market-beating dividend growth still makes this FTSE 100 share worthy of serious attention.

Shareholder payouts have risen every year since 2012, resulting in last year’s 33p per share dividend. And City brokers are expecting them to rise another:

• 8% in 2025, to 35.7p.
• 10% in 2026, to 39.4p.

To put all that in perspective, dividend growth across the broader UK share index has averaged 3%-4% this century.

This doesn’t make BAE Systems a no-brainer stock to buy though. As a major supplier to the Department of Defense, its profitability is exposed to any pulling back in US military activity on the global stage.

Yet this isn’t a formality as the geopolitical landscape continues to evolve. Besides, the company can expect sales to other key customers like the UK, Australian and Saudi Arabian governments to keep rising. Strong spending from NATO countries and partner countries drove group sales 11% higher in the first half.

This in turn encouraged BAE to lift the interim dividend 9% year on year. With Western rearmament tipped to continue, I’m expecting dividends to keep marching higher as well.

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And I think it’s easier than most people believe. Like a lot of readers, I also started with next to nothing.

No savings, no investments and no trust fund. No business interests, and no property. No buy-to-let rental income either.

I had the money I made from freelance writing.

But without passive income, I had no safety net to simply enjoy my leisure time.

So this is how I started.

Zero to hero

Depositing small, regular amounts into a tax-advantaged account like a Stocks and Shares ISA or SIPP is a great way to get up and running.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

It soon grows into a decent stake without you really noticing. Today I’m 42 years old and I have about £4,000 of passive income banked.

Almost exactly half of this comes from share price increases in the growth stocks I own.

The rest is from regular dividend payments from income stocks.

Not all companies pay dividends. These include the biggest names: Amazon, Netflix and the Google owner Alphabet.

Thirst for growth

It can be frustrating to find a stock you like, and see it doesn’t pay dividends. However, it’s not always a binary choice between dividends or growth forever.

For example: one of my best investments did not pay a dividend when I first bought the shares.

However, it will start sending me free dividend cash this year.

This is the £200m market cap viral medicine testing company Hvivo (LSE:HVO).

It trades on the AIM market, one step below the FTSE 250.

Buying shares in what was then an unknown 12p-per-share penny stock was quite scary. But I did a huge amount of research before buying in.

I listened to investor presentations. I looked at their rival companies to see how fast they could grow. I watched like a hawk to see if management actually made good on promises.

Hot profit

Hvivo’s sales shot up from £3.3m in 2019 to £55.5m in 2023.

From losing £5m a year, the company is now raking in £8m a year in profits.

It is vastly more cost-effective for big pharma companies to use Hvivo’s models than any other method. That’s why Hvivo’s pay-up-front clinic model has seen such explosive growth.

So I’ll hold this alongside my other dividend-paying shares.

I’ll use compound growth to my advantage here: reinvesting any dividend payments into buying more shares. For me, that includes 7.5% dividend renewables fund Greencoat UK Wind and the low-cost 13.8% dividend yield metals producer Sylvania Platinum.

Building passive income is a way I’ve used to make my money work for me, rather than the other way around. Given my results to date, I can’t see myself stopping any time soon.

The post How I built £4,000 of passive income starting with £0 appeared first on The Motley Fool UK.

The Renewables Infrastructure Group

As its name implies, The Renewables Infrastructure Group (LSE:TRIG) is a company focused on investing in renewable energy assets. More specifically, it owns wind and solar assets across Europe, as well as a string of battery storage projects.

I already own this UK share in my equities portfolio. And its excellent all-round value is making me consider increasing my holding. This ESG stock trades on a forward price-to-earnings (P/E) ratio of 9.6 times. It also carries a healthy 5.7% dividend yield.

Keeping wind and solar assets up and running can be enormously expensive. And the threat to operators is growing as extreme weather events become more common.

Yet I believe the potential upside of owning Renewables Infrastructure shares offsets this risk. Businesses like this will play a huge role in helping Britain and the European Union meet their carbon reduction targets.

The PRS REIT

Soaring rents are driving profits at residential landlords such as The PRS REIT (LSE:PRSR) through the roof. This provides — at least in the case of this UK share — plenty for income investors to get excited about.

Under real estate investment trust (REIT) rules, the company must pay at least 90% of annual rental profits out by way of dividends. This is why the payout yield here sits at an enormous 4.6%.

A chronic undersupply of new rental homes is driving rents ever higher. Latest data from estate agent Hamptons shows that tenant costs have soared 25% since the beginning of the pandemic. As weak housebuilding levels persist and buy-to-let investors withdraw from the market, the supply and demand imbalance is on course to worsen.

Higher-than-usual building costs pose a threat to PRS REIT’s earnings. But, on balance, I’m still expecting profits here to rise strongly through the short-to-medium term and probably longer.

Sylvania Platinum

Investing in mining stocks can be dangerous business. Even during positive periods for commodities prices, earnings at such businesses can suffer if production problems emerge. These can decimate revenues and drive up costs.

Yet Sylvania Platinum (LSE:SLP) is still an attractive stock to own, in my opinion. The precious metals it digs for look set to benefit from a worsening market deficit as investment and industrial demand outpaces supply.

This week, the World Platinum Investment Council predicted a material deficit of 983,000 ounces in 2023. This was up 77% from just three months ago, with solid investor demand — allied with soaring consumption from automotive and industrial customers — all tipped to rise this year.

I don’t think this improving outlook is reflected in Sylvania Platinum’s low share price. It trades on a forward P/E ratio of just 6.1 times right now. With the South African producer also carrying a 6.8% dividend yield, I think it’s a top value stock to buy.

The post 3 red-hot dividend shares I’d buy for my Stocks & Shares ISA! appeared first on The Motley Fool UK.

Platinum powerhouse

Minerals extraction is a highly complex and massively expensive business. Any problems in the exploration, development or production stages can sink revenues forecasts and drive costs through the roof.

This is a risk that investors in Sylvania Platinum (LSE: SLP) must endure. But it’s one I’d be happy to shoulder today.

Firstly, Sylvania’s dirt-cheap share price reflects the possible impact of operational problems on its bottom line. Today the South African digger trades on a forward price-to-earnings (P/E) ratio of just 4.1 times.

And secondly, a bright outlook for the platinum market suggests earnings here could rocket in 2023.

Supply shortages

Today the World Platinum Investment Council has predicted a meaty 303,000-ounce deficit for the metal next year. It expects demand to grow 19% year on year and supply to rise just 2%.

Breaking this down, demand from the automotive industry (platinum’s single-biggest end market) is expected to rise 11% in 2023. Industrial off-take meanwhile is tipped to increase 10%, “well above the 10-year average.” And bar and coin demand is forecast to leap 49% from this year’s levels.

Long-term drivers

I wouldn’t just buy Sylvania Platinum for the revenues boost it could receive next year though. I’m expecting demand for its metal to grow steadily as the green energy revolution accelerates.

Platinum group metals (PGMs) are being used in increasingly-large quanitities to filter out harmful emissions from cars. Platinum demand could also soar if green hydrogen use takes off (the metal is a key catalyst in the gas production process).

I’m also encouraged by Sylvania’s long-term production outlook. The company’s Tweefontein plant is on course to start producing metal by the end of 2022. Meanwhile its Lannex project is under construction and due to be commissioned around June.

Safe-haven qualities

I also like Sylvania Platinum because of the defensive characteristics of the products it mines. PGMs are dual-role metals that are popular with investors as well as industrial customers.

Consequently, demand for its metal tends to be more resilient than that of other commodities during economic downturns. Platinum prices have risen 2% in 2022 while copper, iron ore and other industrial commodities have tanked.

This helped Sylvania’s EBITDA rise 57% in the three months to September (to £26.4m).

8.1% dividend yield!

The defensive qualities of PGMs also give mining companies here the strength to pay dividends regardless of broader economic conditions.

Sylvania itself is expected to pay a dividend of 9.1 US cents per share in this financial year (to June 2023).

This forecast gives the company a mighty 8.1% dividend yield. And what’s more, I think there’s a great chance that the company will meet (or potentially even beat) City estimates.

That dividend is covered 3 times over by anticipated earnings. Furthermore, the business has excellent cash reserves to help it pay big dividends if profits disappoint. Sylvania reported a $138.6m cash balance as of September.

I think this income stock could be a great way to boost my long-term passive income.

The post A high-yield income stock I’d buy with £5,000 in December appeared first on The Motley Fool UK.

With this in mind here are two top dividend stocks I’m aiming to buy with cash to spare. Both trade on rock-bottom earnings multiples. They also carry dividend yields north of 9%.

Pagegroup

Recruitment businesses like Pagegroup (LSE: PAGE) are incredibly cyclical. This means there’s a big danger earnings could sink in the near term as the global economy cools.

This doesn’t mean I wouldn’t buy the business for my portfolio this November though. Encouragingly, profits here continue to soar despite worsening macroeconomic conditions.

Furthermore, the recruiter offers eye-popping value for money right now. It trades on a forward price-to-earnings (P/E) ratio of 10.1 times and boasts a 9.1% dividend yield.

Pagegroup’s third-quarter gross profits soared 18.6% year on year, during which time it delivered record performances in nine markets. A strong US dollar also helped results, a factor that should continue to provide support going forward.

As a dividend investor I also like Pagegroup for its rock-solid balance sheet. This naturally gives it more firepower with which to raise dividends and pay special ones. Net cash leapt to £186m as of September.

Sylvania Platinum

Falling car sales pose a danger to platinum group metal (PGM) producers like Sylvania Platinum (LSE: SLP). Around 40% of platinum demand comes from the auto sector where it is used in catalytic converters.

However, environmental factors mean PGM demand looks set to grow strongly over the long term. Increasing amounts of platinum and palladium are being required to cut harmful emissions from cars and trucks.

The demand for platinum is also expected to grow strongly if green hydrogen becomes a popular alternative fuel. The metal is a key catalyst in the production of the gas.

I like Sylvania in particular because of its impressive production record. Third-quarter output hit 19,194 ounces, the highest level since the Covid-19 lockdowns. From the end of this year, its expanded Tweefontein plant will begin contributing additional output as well.

I’m also a fan because of the company’s exceptionally low cost base. This provides it with extra protection when commodity prices come under pressure. It also gives the company extra cash with which to pay market-beating dividends.

Today, Sylvania Platinum boasts a 9% forward dividend yield. Furthermore, this year’s payout is well covered by anticipated earnings. Dividend coverage sits at 2.5 times, well inside the benchmark target of 2 times and above.

At current prices, Sylvania also trades on an ultra-low P/E ratio of just 3.9 times. I think this, combined with that huge dividend yield, makes the business too cheap to ignore.

The post 9% dividend yields! 2 cheap UK dividend shares I’d buy this November appeared first on The Motley Fool UK.

However, looking further afield can help supercharge an investor’s long-term returns.

Small-cap companies like penny stocks are out of favour with many investors. This gives those who take time to explore the London Stock Exchange’s lesser-known companies a chance to snap up some undervalued beauties.

Here are two ‘secret’ value stocks I’d buy to boost my dividend income. Each costs less than £1 to buy.

Michelmersh Brick Holdings

Rising interest rates pose a near term threat to brick manufacturer Michelmersh Brick Holdings (LSE: MBH). Demand for the penny stock’s products could sink if they cause a housing market crash.

That said, I still think the company’s profits will soar over the long haul. Britain’s chronic property shortage and growing population mean that housebuilders will need to supercharge homes production over the next decade.

Analysts at the National Housing Federation believe the UK will have to build 340,000 new homes between 2019 and 2031. This should naturally provide a big catalyst to brick demand.

On top of this, Britain’s ageing housing stock provides Michelmersh with excellent long-term opportunities. The average age of a home here is among the highest in Europe. So product sales to the repair, maintenance and improvement (or RMI) sector could rise sharply as time goes on.

Michelmersh currently trades on a forward price-to-earnings (P/E) ratio of 8.7 times. This leaves a wide margin of safety.

The company carries a market-beating 4.9% dividend yield too. And the predicted dividend is covered 2.3 times by anticipated earnings.

This provides decent compensation for dividend investors should earnings disappoint.

Sylvania Platinum

Investing in mining stocks can be risky business. The complex business of mineral extraction can be costly. Common problems at the exploration, development and production phases can also leave revenues forecasts in tatters.

These hazards are reflected in the rock-bottom P/E ratios of many mining shares. Take Sylvania Platinum (LSE: SLP) for instance. This South Africa-based business trades on a forward earnings multiple of 3.7 times.

It’s my opinion that Sylvania’s price could soar as steps to combat the climate emergency accelerate.

Platinum and palladium are key materials in car and truck exhausts. And lawmakers across major regions are demanding higher loadings of the materials to filter out harmful emissions.

Platinum is also a key ingredient in the manufacture of green hydrogen. This provides excellent opportunities for shares like Sylvania as the switch from fossil fuels intensifies. Analysts suggest the green hydrogen market could grow at an annualised rate of almost 30% between now and 2030.

One final reason why I like Sylvania shares: at current prices the penny stock carries a mighty 8.2% dividend yield. In addition, forecast earnings cover the dividend by 3.3 times.

The post 2 ‘secret’ value stocks I’d buy to boost my dividend income! appeared first on The Motley Fool UK.

Metals giant

Investing in UK mining shares such as Central Asia Metals (LSE: CAML) can be risky business. Demand for their product can be highly cyclical so profits can sink when economic conditions worsen.

At the moment too, the near-term outlook is less that encouraging as China’s economy worsens. The Asian powerhouse is the world’s primary commodity market and sucks up around half of all copper shipments alone.

In a worrying omen, analysts at UBS have slashed their Chinese GDP forecasts in recent hours. They now expect growth of just 2.7% in 2022, down from a previous estimate of 3%. And a 5.4% prediction for 2023 has been slashed to 4.6% for 2023.

A clever dip buy?

Yet I believe the low valuations of many mining shares (including Central Asia Metals) reflects this troubled landscape. Today, this particular share trades on a forward price-to-earnings (P/E) ratio of just 5.6 times.

Central Asia Metals’ share price has sunk 12% in 2022. And as a long-term investor, I think this represents an attractive dip buying opportunity.

You see I expect demand for the company’s products to soar as the transition towards green technologies accelerates. This will likely lead to a sharp share price recovery from current levels.

I think sales of the copper it digs out in Kazakhstan will soar as manufacturing of electric vehicles (EVs) and related infrastructure increases. Meanwhile, consumption of the lead and zinc it produces in North Macedonia will step up as EV battery-building lifts off.

Another top mining stock

For the same reason I think Sylvania Platinum (LSE: SLP) could be a top buy. The platinum group metals (PGMs) it digs for also play a critical role in the fight against climate change.

The main industrial use of these commodities is in the manufacture of catalytic converters in cars and trucks. Legislative changes across the globe mean they are needed in increasingly large quantities to filter out harmful emissions.

However, platinum is also an important material in the production of green hydrogen. The World Platinum Investment Council reckons this role alone could boost platinum demand by a whopping 600,000 ounces over the next decade.

Big dividends

South Africa-focused Sylvania faces the same problems caused by China’s cooling economy. It also faces particular danger as interest rates soar to curb inflation. PGMs are also safe-haven investment metals that can fall in price when central banks tighten policy.

But like Central Asia Metals, I think this threat is reflected by the company’s low valuation. In fact Sylvania trades on an even-lower forward P/E ratio of 4.3 times.

Today, Sylvania boasts a big dividend yield of 6.7% for 2022. Furthermore, Central Asia Metals’ yield sits at a mighty 7.9%. I think both of these income shares are too good — and too cheap — to miss.

The post 2 dirt-cheap high-dividend shares I’d buy to hold for 10 years appeared first on The Motley Fool UK.

Bullion values haven’t soared so far due to fears of severe moves by central banks to tame inflation. Such unexpected action is a real risk which the move by Norway’s central bank this week perfectly illustrates. On Thursday, it hiked rates by the largest margin for 20 years, to 1.25%.

I’m still thinking of tailoring my portfolio for a sudden rise in gold values. And I’d do this by snapping up Centamin.

I like the company’s ultra-low price-to-earnings (P/E) ratio of 10.1 times. I also think it’s a better choice than buying physical gold, or a financial instrument like a gold ETF. This way I can receive a dividend as well as potentially ride a soaring share price. Centamin’s dividend yield by the way sits at a large 5.9%.

Inflation and other issues

I’m not convinced by the effectiveness of central banks in fighting the current inflationary boom. Frantic rate rises haven’t, so far at least, stopped inflation gauges in major regions hitting new multi-decade highs each month.

The pressure on central banks to cool their aggressive actions might mount too as recessionary risks increase. Tepid action from the Bank of England last week (when it raised rates just 0.25%) illustrates the difficult decisions policymakers currently face.

Meanwhile, a worsening Covid-19 crisis has the potential to deepen supply chain problems and boost inflation further. So does a long war in Ukraine that might drive up key commodity prices.

I wouldn’t just buy Centamin to own for the short-to-medium term either. I think the business could prove an excellent long-term pick as it ramps up mining production. It remains on course to produce 430,000-460,000 ounces of gold in 2022 and is on the road to eventually dig out half a million ounces per year.

Another inflation-resistant share I’d buy!

Gold isn’t the only precious metal that could soar in this high-inflation environment. Platinum group metals (PGMs) might also rebound strongly again before too long. It’s why I’m considering adding Sylvania Platinum (LSE: SLP) to my portfolio as well.

Like Centamin, this platinum producer carries a rock-bottom valuation. It trades on a forward P/E ratio of just 3.9 times. In addition, its dividend yield stands at a solid 5.6%.

I’d buy Sylvania even as weak economic conditions threaten industrial demand for its product in the near term. And I’d look to hold its shares for the long haul too.

I think demand for pollution-battling metal platinum could soar as the fight to reduce car emissions increases. I also reckon off-take of its material could soar over the next decade, thanks to its critical role in hydrogen production.

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Penny stocks are shares of usually small-cap companies that cost less than £1 per share. Their cheapness means that they can be prone to bouts of extreme share price volatility. They tend to be financially weaker than larger-cap companies, too, making them vulnerable when times get tough.

These weaknesses and their relative unpopularity means that many of them are massively undervalued. This gives me an opportunity to nip in and grab a potential growth hero of the future at a knock-down price.

Here are two cheap dividend-paying penny stocks I’d buy right now. I think they could make me a lot of cash over the next decade.

A platinum-plated stock

I think the stage could be set for platinum prices to soar. And so I’m considering buying South African mining company Sylvania Platinum (LSE: SLP) for my portfolio.

There are several reasons why precious metals prices could surge. Rocketing inflation and a stuttering global economy. Rounds of fresh trade wars. A fresh Covid-19 crisis in China, and severe geopolitical repercussions from the war in Ukraine.

Platinum prices in particular could receive an extra boost from tightening supplies, helping Sylvania Platinum’s profits even further. This week the World Platinum Investment Council slashed its platinum surplus forecasts for 2022. It now expects the surplus to fall to 627,000 ounces from 1.12m ounces last year.

5.7% dividend yields!

A rising US dollar threatens to derail potential gains for precious metals prices. But on balance I think the possible benefits of owning Sylvania Platinum shares remain compelling. I expect demand for platinum group metals (PGMs) to soar as stricter emissions regulations demand higher amounts of the precious commodities be loaded into autocatalysts.

Besides, at current prices the mining stock trades on a forward price-to-earnings (P/E) ratio of just 3.8 times. This represents some seriously-good value. It carries an enormous 5.7% dividend yield too.

Going for gold

In the current environment, getting exposure to the most popular precious metal of all is a good idea. Therefore Egypt-focussed gold miner Centamin (LSE: CEY) is also on my shopping list today.

Like Sylvania Platinum, Centamin offers exceptional all-round value right now. Its dividend yield for 2022 sits at a mammoth 5.6%. Furthermore, the gold stock trades on a sub-one price-to-earnings growth (PEG) ratio of 0.8 for this year.

Centamin’s low share price reflects to some degree the risky nature of its operations. It’s a quality the business shares with Sylvania, of course. Setbacks with mineral exploration, mine development, and metal production can be common. And they can have a catastrophic impact on future profits.

However, this is a risk I’d be happy to take given the bright outlook for precious metal prices. I think Centamin and Sylvania are top penny stocks to buy today.

The post £5,000 to invest? 2 dividend-paying penny stocks I’d hold to 2030 appeared first on The Motley Fool UK.

I haven’t sold any of my shares though. And I have no plans to do so. In fact, I’m searching for the best bargain stocks to buy following this recent round of heavy selling.

Taking a long-term view

I’m someone who invests with a long-term view in mind. And there are stacks of terrific UK shares I think might make me terrific returns, regardless of any near-term problems.

Here are two sinking stocks I think could be too good to miss following market volatility.

#1: Spire Healthcare

Private hospital group Spire Healthcare (LSE: SPI) has slipped to its cheapest for almost a year on Thursday. I think it’s a great buy though as Britain’s free healthcare service goes from bad to worse.

Spending on healthcare tends to remain stable even when economic conditions deteriorate. Our health is one thing that we can’t afford to skimp on, right? So I think the market has overreacted by heavily selling this UK share.

Today, news emerged that NHS waiting lists hit fresh record highs of 6.4m in March. This was up a staggering 200,000 month-on-month.

The government expects lists to keep growing too, which I think should continue driving patient volumes at Spire Healthcare higher. The number of self-pay patients at the company’s hospitals and clinics soared 115% year-on-year in 2021 as people turned their backs on the NHS.

My only concern with Spire Healthcare is its elevated earnings multiple. Despite market volatility, the business trades on a forward price-to-earnings (P/E) ratio of 43.6 times.

Stocks that carry high valuations can suffer extra-heavy sell-offs if newsflow disappoints. That said, I believe the possible long-term rewards of owning Spire still make it an excellent buy for me.

#2: Sylvania Platinum

I’d also load up on Sylvania Platinum (LSE: SLP) shares following fresh erosion in its share price. Its metals are critical materials in autocatalysts where they’re used to reduce car emissions. I think profits here could soar as the fight against climate change intensifies.

This week the European Parliament passed a law requiring carmakers to accelerate their pollution-cutting plans. It will require them to reduce carbon emissions by a fifth by 2025.

Climate change is a global issue and Sylvania Platinum could see demand for its material take off over the next decade. Sinking car production rates due to supply chain issues threatens company revenues in the near term. But the gradual transition to greener technologies presents opportunities that I find hard to ignore.

At 88p per share penny stock Sylvania trades on a forward P/E ratio of just four times. It also carries an enormous 5.6% dividend yield. I think this could be one of the hottest stocks for me to buy following recent market volatility.

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