One income stock I will be adding to my holdings imminently is Urban Logistics REIT (LSE:SHED). Here’s why I’m bullish on the shares.

Real estate investment trust

As a quick reminder, a real estate investment trust (REIT) is a business designed to yield income from property. As a rule of thumb, it must return 90% of profits to shareholders in the form of dividends. This is why I already own a few REITs as part of my holdings, with the primary aim of boosting my passive income stream.

Urban specialises in industrial and logistics-style properties to help with ‘last mile’ delivery. It focuses on smaller, single-let industrial properties in key locations throughout the country.

At present, Urban shares are trading for 134p. At this time last year, the stock was trading for 163p. This is a 17% decline over a 12-month period. This share price drop does not concern me. In fact, I view it as an opportunity to buy cheap shares in a stock I’ve had my eye on for some time.

An income stock with challenges to be wary of

Despite my decision to buy Urban shares, I must note bearish aspects which could hamper the shares. Firstly, I believe the share price has been pushed down by economic volatility caused by soaring inflation and rising costs. This is not good news for Urban as many businesses are struggling. This could see them struggle to pay rent to firms like Urban for the use of their properties.

Next, for any income stock, it is worth remembering that dividends are never guaranteed. They can be cancelled at the discretion of the business to conserve cash in times of volatility.

Finally, Urban has a record of acquisitions to grow its portfolio of properties. Acquisitions are great, but they have the ability to go wrong. One common issue is overpaying for a property in Urban’s case. This could have a detrimental impact on returns.

Why I like Urban shares

To start with, I like Urban’s business model and the sector it is currently targeting. E-commerce has exploded in recent years, and there is still a shortage of quality warehousing space for businesses to utilise. Urban specifically targets businesses looking for ‘last mile’ hubs. This should help boost performance and returns for some time to come.

Moving on to Urban’s level of return, the shares current dividend yield stands at an impressive 6%. This is higher than the FTSE 100 and FTSE 250 average of 3%-4% and 1.9% respectively.

Next, due to Urban’s recent share price drop, the shares look dirt-cheap on a price-to-earnings ratio of just over three.

Finally, Urban has a good track record of performance. I do understand that past performance is not a guarantee of the future. However, looking back, I can see it has grown revenue for the past four years consecutively. It also continues to expand its portfolio of properties for growth purposes.

In conclusion, I believe Urban will serve me well as a good income stock. I do expect some shorter term headwinds due to the current volatility in the economy. Despite this, I buy and hold for the long term, so I am happy to buy the shares and hold on to them for long-term returns.

The post Here’s why I’m buying this income stock for juicy dividends with a 6% yield! appeared first on The Twelfth Magpie.

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

Iron curtain

The silver lining in the ongoing war for Ferrexpo is that it’s located in central Ukraine. Despite being stationed east of the Dnieper River, Ferrexpo’s facilities haven’t suffered any direct damage from Russian forces, allowing it to continue running its operations.

Having said that, logistical disruptions have impacted the company’s exports. In its most recent operations update, Ferrexpo mentioned that it decreased its commercial production. Ukraine’s Black Sea ports remain closed due to Russian presence in the south. As a result, the FTSE 250 firm has had to divert all its European shipments via Ukraine’s railway network and barging operations.

However, recent Russian airstrikes have damaged Ukraine’s railway and infrastructure in the south west. This has reduced Ferrexpo’s ability to utilise its barging operations to serve its European customers. Nevertheless, the group is in advanced discussions with additional port operators in central Europe for seaborne exports.

As flexible as wrought iron

Due to supply chain disruptions, the iron pellet producer reported a 0.4m tonne increase in iron ore inventories in May. Although the downturn in production hasn’t resonated well with shareholders, I believe this to be a masterclass in operating efficiency, as Ferrexpo is protecting its bottom line from unnecessary costs.

Management have also reiterated that production is expected to resume at peak capacity once damaged infrastructure is reopened, an alternative logistics route is agreed, and Ukraine’s Black Sea ports resume activities.

On track to £3.30?

I have no doubt that Ferrexpo has a long and treacherous road ahead. Analysts have set a price target of £3.30, but the firm faces strong political and economic headwinds. Apart from the ongoing war, a recession in Europe and America is within the realms of possibility. If this were to happen, it would negatively impact industrial production, affecting Ferrexpo’s top line.

On the flip side, there are also a couple of catalysts that could send the FTSE 250 stock flying. Firstly, the firm sees excess demand from Europe after countries imposed sanctions on Russia. Considering Europe accounted for more than half of Ferrexpo’s revenue in 2021, this could be a huge tailwind for Ferrexpo once it resolves its logistical issues. Secondly, iron ore prices could increase if China’s economy continues its recovery. With the group’s Wave 1 Expansion also on hold, its ability to produce 25% more pellets could boost Ferrexpo’s numbers if there’s sufficient demand.

Furthermore, the board recently reinstated its dividend, attracting dividend investors back into the stock. Its shares are going ex-dividend later this week at 6.60p per share. So, this could be an opportunity for me to earn some passive income.

Nonetheless, despite a potential 115% return, the geopolitical implications remain too ambiguous for me to have a long-term position in Ferrexpo. Instead, I’ll be looking to purchase other shares that could benefit my portfolio in this stock market crash.

The post Can this FTSE 250 income stock make me rich? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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

What’s going on with the Aviva share price? 

Investors looking at the Aviva share price chart might be slightly concerned at its recent drop. However, there’s no need to be. Indeed, the drop was prompted by its B share scheme, where the company returned £3.75bn to shareholders. A B share scheme is similar to a special dividend but deemed more tax efficient. This returned the proceeds from the company’s disposals of its international subsidiaries. However, as the cash is no longer on the balance sheet, the large drop in the Aviva share price was expected. 

To make things slightly more complicated, Aviva also conducted a share consolidation, at a ratio of 76:100. This means that for every 100 shares held by an investor, they received 76 back. This does not affect the value of the firm, however.   

What factors should be considered? 

Despite selling off its international subsidiaries, Aviva continues to perform strongly. For example, in the first three months of 2022, UK & Ireland Life sales were up 2% year-on-year, with particularly strong growth in the annuities sector. The firm also highlighted growth in the General Insurance sector, which achieved its best quarterly sales in a decade. Aviva noted that this was because “people were attracted to the strength of the Aviva brand and the quality of [their] products”.This bodes well for the future. 

There was a slightly less promising update from the wealth management sector, though. In fact, overall sales were down 3% year-on-year and overall assets under management fell 1% to £150bn. This is mainly due to market volatility. However, while this may be a short-term problem, it still points to negatives around the Aviva business model. If this fails to improve, it’s a factor that could strain the Aviva share price. 

But I’m not buying Aviva shares for growth. Instead, it’s establishing itself as one of the most reliable income stocks around. Indeed, this year, Blanc has already promised to raise the dividend to 31p per share, and 32.5p in 2023. This equates to a current yield of 7.6%, one of the highest in the market. 

What am I doing now? 

Market uncertainty can be particularly damaging for insurance firms, as shown when Aviva cancelled its dividend during the 2020 stock market crash. But after its disposals, the firm seems to have a clearer focus. The large dividend payouts are also extremely tempting. Therefore, I’ll continue to add Aviva shares to my portfolio at its current price. 

The post A 7.6% dividend yield! Is the Aviva share price a bargain not to be missed? appeared first on The Twelfth Magpie.

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