Finding a great income stock in a rising market isn’t easy. But sometimes, a falling share price creates exactly that opportunity. And right now, PageGroup’s (LSE:PAGE) offering a 7.99% dividend yield – one of the most eye-catching income propositions in the entire FTSE 250.
With shares trading at just 107p, a £5,000 investment today would buy 4,672 shares and unlock a roughly £400 passive income in the process.
But is this actually a good idea?
Why the share price has been hammered
As a quick introduction, PageGroup’s one of the world’s leading specialist recruitment firms, placing professional and skilled candidates across more than 37 countries under its Michael Page, Page Personnel, and Page Executive brands.
And it’s been a bruising 12 months for the business. A series of painful profit warnings driven by a prolonged global hiring slowdown have seen close to 60% of its market-cap wiped out since July last year. And its latest full-year results laid bare the scale of the damage.
Revenue fell 8.2% to £1.60bn, pre-tax profit collapsed 67% to just £16.2m, and earnings per share (EPS) dropped from 9.1p to 2.9p. But it was dividends that bore the brunt of the pain, with the payout cut from 17.11p to 8.57p. And understandably, income investors reacted viscerally, sending the share price spiralling to its lowest level since 2016.
Yet even after that cut, the yield remains substantial. So with the damage now done, is this a hidden income opportunity?
Is there a recovery case?
The group’s first-quarter trading update for 2026 offered some tentative encouragement.
Group gross profit fell 4.9% in constant currency to £187m. That’s obviously still declining. But the rate of deterioration is slowing.
More importantly, the Americas and Asia Pacific regions both delivered growth, with the US posting its sixth consecutive quarter of expansion and Asia its fourth. Japan grew 17%, India 10%, and Singapore 16%. In other words, outside of the core European market, demand for PageGroup’s services is recovering.
So what should investors make of all this? On the one hand, if European labour market sentiment normalises (which history suggests it eventually will), PageGroup’s extremely well placed to benefit. Don’t forget, recruitment businesses are operationally leveraged. So when volumes recover, profits bounce back even faster.
Having said that, the near-term outlook’s genuinely uncertain.
For example, PageGroup’s second largest market, France, still shrank by another 14% during the first quarter with no tangible signs of stabilisation. The UK’s down a similar 11.4%. And with the Middle East conflict creating a “heightened degree of uncertainty”, management’s language has been very cautious.
So is it worth buying?
PageGroup’s a cyclical business at a cyclical low. That combination is historically where the best returns are made. But it’s also where timing matters most. Jumping back in too early could leave investors with a bitter taste. After all, while a recovery’s expected, the exact timeline remains a mystery.
For patient investors who believe the European hiring market will eventually turn, this income stock offers a potentially compelling entry point worth considering. But personally, with Europe still looking quite shaky, I feel it might be too soon to think about going on a shopping spree.
Instead, I think there are far more promising income stocks to explore elsewhere.
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Zaven Boyrazian does not hold any positions in the companies mentioned.
