2 income stocks I'd buy today! | The Motley Fool UK – Motley Fool UK

5 Stocks for Trying To Build Wealth After 50
If you’re aiming to get your finances on track and you’re in or near retirement, then here’s your chance to claim a FREE copy of an exceptional investing report featuring 5 stocks that The Motley Fool UK is expressly recommending for INVESTORS aged 50 and OVER to consider investing in!
Compare Our Services
Find an investing service that’s right for you!
Ten Steps To Financial Freedom
Smarter, Happier, and Richer: read our Foolish guide to getting your finances in order.
With inflationary pressures continuing to cause global turmoil, this Fool looks at two income stocks he’d buy to protect his portfolio.
Image source: Getty Images
Income stocks are a great way to protect my portfolio against rising inflation. With it currently sitting at over 9% in the UK for May, the situation across the pond isn’t faring much better. Yesterday the US saw rates spike to a 40-year high.
With rising inflation meaning volatility is running rife, I’m on the lookout for stocks with healthy dividend yields to put my money to work. Here are two I’ve got my eye on.
Inflation Is Coming
Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!
Click here to claim your copy now!
My first pick is FTSE 100 constituent Lloyds (LSE: LLOY).
The stock’s current dividend yield is an attractive 4.77%, which sits firmly above the FTSE 100 average. This isn’t inflation-beating, but it’s most certainly more rewarding than keeping my cash in the bank.
There are other reasons to pick Lloyds too. I like the bank’s low valuation. With a price-to-earnings (P/E) ratio of 5.6, this falls well within the ‘value’ benchmark of 10. And compared to its peers, Lloyds also looks cheap. For example, HSBC currently trades on a P/E of 11.
Hiking interest rates could see the firm suffer if its customers default on their loans. Yet on the other hand, higher rates will also allow Lloyds to charge borrowers more when lending. Interest rates were recently set at 1.25%. And with another review scheduled for August, there have been hints of a 0.5% hike. It could benefit from this.
Lloyds is also the UK’s largest mortgage lender. With loans for properties accounting for over two-thirds of its lending, the business may see a slowdown in growth for the foreseeable future as the booming housing market hits the brakes. However, I still think it would be a strong addition to my portfolio.
I also like the look of Rio Tinto (LSE: RIO). With an impressive dividend yield of 12.1%, this trumps that of Lloyds. It also beats the UK inflation rate, offsetting the possibility of my cash eroding.
It’s the second-largest mining company in the world, and it currently trades for around £47 per share.
Just like Lloyds, the stock looks cheap. It has a 4.4 P/E, considerably lesser than that of competitor Glencore (13.3).
On top of this, it also had £1.6bn of net cash, according to its 2021 full-year report, so the firm is in a healthy financial position to pay dividends.
It will also benefit from the large investments we’re set to see in the renewable energy sector. Electric vehicles and their charging infrastructure, along with renewable energy power plants, will see a rise in the long-term demand for iron. The business has also been increasing its stake in mining lithium – including the recent purchase of Rincon lithium project.
It does, however, faces headwinds, as ongoing Covid concerns continue to plague China. Demand for iron ore may wane in the months ahead. China accounts for around half of global steel output, and iron ore is a key material, meaning Rio Tinto may suffer.
However, with its low valuation and strong long-term outlook, I’d buy the stock today.

Should you invest £1,000 in Lloyds right now?
Before you consider Lloyds, you’ll want to hear this.
Motley Fool UK’s Director of Investing Mark Rogers has just revealed what he believes could be the 6 best shares for investors to buy right now… and Lloyds wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 shares that are currently better buys.
All you need is an email address to get started
Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has recommended HSBC Holdings and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.
| Joshua Kalinsky
After growth of 10,000% from its all-time low and having just rejected a billion-dollar offer to merge, this Fool contemplates…
Read more »
| Jon Smith
Jon Smith talks through a few main reasons why he thinks the dip in the FTSE 100 this week offers…
Read more »
| Dr. James Fox
It’s been a pretty turbulent year for investors in Rolls-Royce shares. The stock had gained from its pandemic lows, but…
Read more »
| Edward Sheldon, CFA
Carnival shares have crashed in 2022, falling more than 50%. Edward Sheldon discusses whether this is a buying opportunity.
Read more »
| Alan Oscroft
The Cineworld share price has been hammered by losses, big debts, and potentially crippling legal action. Might that all change…
Read more »
| Edward Sheldon, CFA
Edward Sheldon looks at the Royal Mail dividend forecast for the next few years and discusses whether he would buy…
Read more »
| Andrew Woods
Andrew Woods looks at the BP share price in comparison to competitors and assesses what factors are driving its current…
Read more »
| Andrew Woods
Andrew Woods examines a FTSE 100 stock that is already showing signs of recovering from the tough time it faced…
Read more »
View All
Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.
From 2015-2019, this UK company saw its revenues increase 38.6%, its net income go up 19.7x, and since 2012, revenues from regular users have almost DOUBLED.
We think the opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money…
So why sit on the side lines a minute longer? You could have the full details on this company right now.
To get your copy of this research report for FREE, simply click the button below.
Click here for all the details!
Visit our broker comparison centre to see our top-rated picks and to apply online!
To make the world Smarter, Happier, And Richer
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services.
Read more about us >

We have taken reasonable steps to ensure that any information provided by The Motley Fool Ltd, is accurate at the time of publishing. Any opinions expressed are the opinions of the authors only. The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser. No liability is accepted by the author, The Motley Fool Ltd or Richdale Brokers and Financial Services Ltd for any loss or detriment experienced by any individual from any decision, whether consequent to, or in any way related to the content provided by The Motley Fool Ltd; the provision of which is an unregulated activity.
The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors.
Fool and The Motley Fool are trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority (FRN: 422737). In this capacity we are permitted to act as a credit-broker, not a lender, for consumer credit products. We may also publish information, opinion and commentary about consumer credit products, loans, mortgages, insurance, savings and investment products and services, including those of our affiliate partners. We do not provide personal advice and we will not arrange any products on your behalf. Should you require personal advice, you should speak to an independent, qualified financial adviser.
The Motley Fool Ltd. Registered Office: 5 New Street Square, London EC4A 3TW. | Registered in England & Wales. Company No: 3736872. VAT Number: 188035783.
© 1998 – 2022 The Motley Fool. All rights reserved. The Motley Fool, Fool, and the Fool logo are registered trademarks of The Motley Fool Holdings Inc.


Leave a Comment