Penny stocks sit at the sharp end of the risk/reward spectrum. They’re often small, fast‑moving businesses with limited track records, which makes it tough to look confidently 10 years ahead.

But a few names are already reasonably established and still trade at what I’d see as ‘early‑stage’ valuations. One example is Michelmersh Brick Holdings (LSE: MBH).

So what makes it an interesting long‑term candidate?

A good old solid bricky

Michelmersh manufactures clay bricks and prefabricated components for construction, selling under brands such as Blockleys and Freshfield Lane.

In its 2025 results, revenue came in at £68.9m, down slightly from £70.1m, while statutory profit before tax fell to £4.3m and basic earnings per share to 4.02p.

Despite the profit squeeze, the dividend was held at 4.6p per share and operating cash flow rose to £10.9m. That’s rare for a penny stock.

The share price has struggled to recover since the 2008 financial crisis but now could be its time to shine.

The housing push

With Labour targeting 1.5m new homes, housing policy has moved centre stage again. The manifesto talks about mandatory housing targets and the “biggest increase in social and affordable housebuilding in a generation”. That should support demand for materials if those ambitions translate into actual projects.

Using a discounted cash flow (DCF) model, analysts estimate the stock is trading at 39.3% below fair value. Even one of the lowest 12-month targets I found (88p) is still 11.4% higher than today’s price.

The stock’s 2021 high is double today’s price. If it regains that level and continues for another five years, it could realistically triple today’s price.

But construction activity remains weak and Michelmersh’s margins are already under pressure. Net cash has swung to net debt, and management has flagged uncertainty around the timing of customer orders. If Labour’s housing plans don’t materialise, returns could lag expectations and stall the company’s recovery.

Another strong option?

Brave Bison Group (LSE: BBSN) isn’t technically a penny stock any more, as its market cap now sits a little above £100m. Even so, I see it as a small‑cap play with long-term potential.

The company is a “next‑generation marketing and technology partner”, running social‑media campaigns, influencer marketing, e‑commerce services, and its own media network across platforms like YouTube and TikTok.

For 2025, Brave Bison guided net revenue of at least £33.5m, up 57% from £21.3m in 2024, with adjusted EBITDA of at least £6.5m and adjusted profit before tax of at least £5.5m.

That growth is being driven by acquisitions and new client wins, including major names such as Primark and Royal Mail.

But with lots of recent acquisitions, execution mis‑steps or a downturn in digital ad spend could easily hit margins.

Final thoughts

For me, penny‑style stocks are classic high‑risk/high‑reward tools in a diversified portfolio. Many of today’s giants once traded for pennies, but plenty of penny names quietly disappear too.

Businesses like Michelmersh Brick and Brave Bison offer real‑world demand drivers with credible growth plans. Still, the extra uncertainty means they should only be considered as small positions alongside more defensive core holdings.

The real question is whether that mix of risk and potential suits your own long‑term plan. Investing is all about each individual’s unique goals, timeline, and risk tolerance.

Should you invest £5,000 in Michelmersh Brick Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Michelmersh Brick Plc made the list?

Mark Hartley does not hold any positions in the companies mentioned.

The post Could these high-risk/high-reward penny stocks triple their value in the next decade? appeared first on The Twelfth Magpie.

More reading

• £500 buys 643 shares in this penny stock, expected to grow earnings 75% this year!

Working towards passive income in the stock market takes time, and I don’t think anyone should start by chasing the highest yield. For me, the better thing to focus on is whether a company can keep paying and growing dividends for decades.

That’s why I like businesses that have been rewarding shareholders since my father was young, not just stocks that look tempting today. If I’m thinking 20-30 years ahead, I want durability, not drama.

So which UK dividend stocks look strongest as we move into the second half of 2026?

10 income stocks that complement

For me, the best dividend stocks have three things in common: they throw off enough cash to cover payouts, they have long records of paying shareholders, and they carry debt levels that don’t threaten the dividend.

I also like businesses with pricing power, because that helps them protect margins when inflation or weak demand hits. That’s why I’d rather own a steady 4%-yielder like Diageo (LSE: DGE) with a strong record, than chase an 8% yield that could disappear next year.

My top pick today

Diageo looks especially interesting for both income and value investors this year. The alcoholic beverages producer owns and markets several ‘billion-dollar’ globally recognised brands worldwide.

In recent results, management said the group’s “broad portfolio of iconic brands” with sales in “nearly 180 countries”. That gives it the scale and reach many income investors want. Despite a 50% price decline in the past five years, profitability remains solid, with a return on equity (ROE) of 21.39%.

It has a moderate 4.09% dividend yield with a high payout ratio around 80%, but the key attraction is its 47-year payment track record. That shows strong dedication to rewarding shareholders.

Still, it’s faced notable challenges lately and its price fall has reflected them. The latest results showed pressure on sales in North America and China, and it may have to reduce dividends to strengthen the balance sheet (net debt is $21.7bn). 

So it may not be a perfect income stock, but if the price recovers, total returns from both dividends and capital gains could be significant.

The bottom line

Diversification goes beyond just including stocks from different sectors. Even within a pure income portfolio, it’s important to include a variety of dividend stocks with complementary characteristics.

Each of the dividend stocks I covered here could all add value to an income portfolio in various ways. A portfolio filled only with high yielders can look attractive until one or two companies cut payouts, so it often makes sense to consider including stronger, more established businesses like Diageo. 

That kind of balance is usually what helps income remain steady through rough market cycles.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Mark Hartley owns shares in Diageo, Unilever, RELX, National Grid and HSBC.

The post Which British dividend shares could supercharge a passive income portfolio in 2026? appeared first on The Twelfth Magpie.

More reading

• Has the turnaround finally started for Diageo shares?
• How much longer can the Diageo share price stay this low?
• Is it finally game on for the Diageo share price?
• Why has the Diageo share price badly underperformed the FTSE 100 under its latest boss?
• Why does the market still not believe in Diageo shares?

Lloyds Banking Group (LSE: LLOY) shares are often the go-to pick for investors looking to build a strong foundation in a long-term retirement portfolio.

The bank’s deep connection to the UK mortgage industry makes it something of a bellwether for the broader economy. When housing activity, interest rates, and consumer confidence move, Lloyds’ lending income and credit losses usually move with them.

But with house prices rising, population growth under pressure, and political sentiment shifting, how does it compare to other banks in 2026?

Side-by-side comparison

Lloyds’ Q1 2026 results were respectable, although not quite as impressive as some rivals. Net income rose 9% to £4.785bn, operating costs fell 3% to £2.47bn, and banking net interest margin improved to 3.17% from 3.03%.

That helped lift return on tangible equity (RoTE) to 17%.

Barclays reported Q1 2026 total income of £8.163bn, up 6%, with operating costs of £4.54bn and RoTE of 13.5%.

In the same quarter, NatWest posted total income (excluding notable items) of £4.22bn, up 6.9%, with a 46.5% cost-to-income ratio and RoTE of 18.2%.

On raw efficiency and profitability, NatWest came out ahead, while Lloyds still looks good on mortgage-linked earnings power. But when I run these statistics side-by-side, it’s clear to see it’s not the only bank doing well…

Risk exposure

Lloyds’ biggest strength is also its main risk. It’s the UK’s largest mortgage lender by outstanding balances, with a £324.7bn mortgage book as of 31 March. That leaves it highly exposed to UK housing sentiment, even though its lending mix is broad and its credit quality was stable in Q1.

The bank’s own scenario work assumes UK house price growth of 0.7% in 2026 and 3.6% in 2030 under its base case. It also shows house prices falling in downside cases, which matters because slower lending growth and weaker margins would hit income.

Lloyds says its Q1 margin strength came partly from structural hedge income, but it also notes mortgage asset-margin compression. For a lender with such a heavy mortgage bias, that’s the key concern.

What this all means for investors

For British investors adopting a long-term retirement outlook, I’d frame Lloyds as the steadier, more UK-focused bank.

At the same time, I wouldn’t entirely ignore NatWest as a serious alternative in 2026. It has shown stronger recent profitability metrics and better efficiency, which usually allows more room for dividends or buybacks. For investors keen on earning income along the road to retirement, that matters.

Meanwhile, Barclays offers more diversification but is less of a pure retirement-income feel. That matters for those who feel the mortgage risk is significant, so it may appeal as a safer option. It has broader international reach, stronger investment banking exposure, and potentially more advanced digital tools.

In the end, it really comes down to each investor’s personal preference and long-term goals. But if I wanted one simple bank holding to consider for a long-term portfolio, Lloyds still makes the most sense, in my mind.

Should you invest £5,000 in Lloyds Banking Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group Plc made the list?

Mark Hartley owns shares in Lloyds Banking Group.

The post Barclays, NatWest or Lloyds shares: which is the better pick for a UK retirement portfolio? appeared first on The Twelfth Magpie.

More reading

• Prediction: this UK growth stock will outperform Lloyds shares over the next 5 years
• Here’s how much I think Lloyds shares will be worth by the end of 2027
• How to target a tax-free passive income of £1,275 a month on top of your State Pension
• At 109.5p the Lloyds share price just hit an 18-year high! What should investors do?
• Why I’d rather consider buying Lloyds shares over SpaceX

A Self-Invested Personal Pension (SIPP) can be a powerful way to build retirement wealth. For those who are unaware, it’s like a tax-wrapper that allows the investments inside to grow free of tax.

That matters over decades. Small differences in quality can become big differences in outcome when returns are left to compound for 20 or 30 years.

For that reason, I think a retirement-focused portfolio should start with businesses that are financially resilient, easy to understand and capable of producing steady returns through different market conditions.

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.

Three starter stocks to consider…

For a British investor opening a first SIPP, three names worth considering are Unilever, National Grid and Prudential (LSE:PRU). They sit in different parts of the market, which helps spread risk.

Unilever has the sort of profile many novice investors like in a pension. It sells everyday brands people keep buying in good times and bad, which can help support cash generation.

National Grid’s different, but just as useful in a long-term portfolio. Its regulated business model gives it a defensive feel, and that can be valuable when markets get choppy.

Prudential adds more growth potential. It’s not a sleepy stock, but it gives a SIPP exposure to insurance and asset management, plus a stronger link to Asia than most UK shares.

Why Prudential works

Insurers can make sense for investors who want financial exposure without buying a bank. They provide diversification within the financial sector without the same loan-book and credit-risk swings that typically come with bank stocks.

And Prudential is often cited as a leader in the UK insurance industry. In its 2025 full-year results, underlying operating profit rose 10% to $3.1bn and annual premium equivalent sales rose 7% to $6.2bn. Latest figures suggest funds under management at Eastspring, its Asian asset management business, sit at $275bn.

That gives the company a few attractions:

• It has a large life insurance and savings franchise.
• It has fee-earning, asset-management businesses that can lift earnings over time.
• It offers exposure to higher-growth Asian markets.
• It has potential for stronger growth in assets under management than slower-moving UK defensive stocks.

But even the most reliable stocks come with risk. Prudential’s exposed to market swings, currency moves and the Chinese economy, where trading conditions can be uneven. It also faces regulatory pressure and the usual risks that come with insurance, including claims trends and investment-market volatility.

Building patiently

For a SIPP, I’d rather add money regularly than try to invest one large lump sum at the ‘right’ moment. Pound/cost averaging can soften the impact of market noise.

This approach also makes it easier to stay calm. Solid, reliable stocks reduce the temptation to guess the market’s next move.

Unilever, National Grid and Prudential are all sensible starter stocks to consider when opening a first SIPP — but they’re not the only ones. The FTSE 100 has plenty more names that can play a similar role, from income machines to defensive compounders.

Should you invest £5,000 in Prudential Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Prudential Plc made the list?

Mark Hartley owns shares in National Grid and Unilever.

The post Thinking about a SIPP for retirement? Here are 3 starter stocks to consider appeared first on The Twelfth Magpie.

More reading

• How much do you need in a Stocks and Shares ISA to generate £100 a day in passive income?
• FTSE 100 value stocks: where has the market become too pessimistic?
• 4 steps to building a £38,456 retirement income with ISA shares

As the race for jobs in what looks likely to be an Andy Burnham-led government gets under way, I thought I’d conduct a little challenge of my own. I’ve identified two FTSE 250 dividend stocks with similar characteristics — each one costs around 100p per share and yields around 8%.

On the surface they look similar income plays, but once I dig into the numbers, they tell very different stories. So which matters most if you’re hoping to live off these dividends for years?

A reliable REIT vs a fast-growing equipment vendor

I already own a few shares in the real estate investment trust (REIT) Primary Health Properties (LSE: PHP), but it never hurts to consider other options.

It owns government-backed, long-lease healthcare facilities across the UK and Ireland. For 30 consecutive years it’s increased its dividend, with a current yield around 7.92% and a 2025 payout of 7.1p per share.

But strict REIT tax rules means it currently pays out essentially all adjusted earnings as dividends. That suits investors who want maximum cash today, but it leaves limited room to reinvest or cushion any shocks.

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.

In the opposite corner is ME Group International (LSE: MEGP), which runs instant-service equipment such as photobooths and self-service laundry machines across Europe.

In 2025, it raised dividends 9.5% to 8.64p per share, representing 58% of earnings per share (EPS). That’s consistent with its policy of paying out at least 55% of profit and works out to a dividend yield of about 7.9%.

Profitability and valuation

On profitability, ME Group earns a net margin around 17.9% and delivers return on equity (ROE) of 30.8%. Primary shows a higher net margin of 56.6% but a more modest ROE of 8.6% – typical for a leveraged property vehicle.

Valuation also differs. Following a sharp price dip, ME Group now trades on a price-to-earnings (P/E) ratio of just 7.34. Meanwhile, Primary sits closer to 13.86 – so ME looks more like a bargain today.

Balance sheets also matter for income durability. ME Group has net cash of £26.5m, a quick ratio of 1.17 and debt-to-equity around 0.25, pointing to comfortable liquidity and conservative borrowing.

Primary’s debt is roughly in line with equity, with a current ratio about 0.5 and a quick ratio below 1, so it relies more on debt funding.

Side-by-side comparison

Risk comparison

Primary’s cash flows depend on UK and Irish healthcare budgets, NHS policy and property valuation yields. Higher interest rates or political pressure on rents could squeeze returns, especially with leverage elevated after recent transactions.

ME Group faces more commercial and regulatory risk: photobooth demand can be hit by rule changes, such as tighter German passport photo regulations. Plus, its growth plan assumes continued roll-out of laundry sites and new products.

My verdict

For those aiming mainly for reliability, Primary’s long dividend track record and government-backed leases make it more defensive. Just keep in mind that high payout ratio and debt load.

ME Group has stronger profitability with a lower valuation and payout ratio. That gives it more growth potential but only for investors happy to accept some operational and regulatory uncertainty.

In my opinion, both are worth considering: Primary as the steadier income anchor, and ME as the higher-growth complement.

This highlights a key aspect of diversification: a mix of dependability and risk can actually help stabilise income when markets get rough.

Should you invest £5,000 in Primary Health Properties Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Primary Health Properties Plc made the list?

Mark Hartley owns shares in Primary Health Properties.

The post £10,000 in either of these FTSE 250 gems could net around £800 in passive income. But which to pick? appeared first on The Twelfth Magpie.

More reading

• 1 REIT could turn a £20,000 ISA into annual passive income of £1,580
• With yields of 8.4% and 7.9%, are these FTSE 250 shares perfect for a Stocks and Shares ISA?
• 8% dividend yield! This REIT could be a BIG winner after Keir Starmer’s resignation
• £250 buys 227 shares in this 7.9%-yielding income stock!
• With an 8.5% dividend yield, is this cheap income stock a no-brainer?

While the connection may not be immediately obvious, I believe Rolls‑Royce (LSE: RR.) shares could actually benefit from the AI sell‑off.

And, unsurprisingly, SpaceX is part of that story.

When I step back, I see three big forces:

• Investors rotating away from expensive AI names
• A growing crunch in electricity demand
• Industrial power specialists like Rolls quietly solving those problems

Let’s take a closer look at some of the moving parts that bring these three together.

How AI’s sell‑off puts Rolls‑Royce in focus

The recent AI‑driven correction has seen money flow out of software and semiconductor names into more traditional cyclicals such as industrials and energy. That suits a business like Rolls‑Royce, which is far more of a cash‑rich industrial compounder than a speculative tech play.

In 2025, the aerospace engineer reported the following:

• Revenue: £20.06bn
• Operating profit: £3.46bn
• Operating margin: 17.3%
• Free cash flow: £3.27bn

The £7bn‑£9bn share buyback was the cherry on top, alongside a 9.5p dividend per share. That’s a very different profile from many AI names that are still chasing profitability.

Still, the high valuation can’t be ignored. Analysts’ average 12‑month target is about 1,425p, only fractionally above the current price. With much of the turnaround story already priced in, even a mild earnings slip could hurt the share price.

Here’s how AI could be the next trick up its sleeve.

Rolls’ AI exposure

Rolls‑Royce isn’t an AI stock, but it uses AI heavily in its operations. The group runs thousands of engines through AI‑driven predictive maintenance systems, using digital twins and real‑time data to spot problems early and stretch service intervals.

For airlines, that means fewer unscheduled outages; for Rolls, it means higher‑margin service revenue and better engine reliability.

On the power side, the company is developing small modular reactors (SMRs) designed to deliver around 470MW of steady low‑carbon electricity, specifically pitched as potential power sources for data centres.

Its Power Systems division is already seeing strong demand for backup power and data centre energy solutions, with data centre backup sales rising 46% in 2024.

If AI keeps driving data centre growth, who will investors trust to keep the lights on?

The SpaceX link

SpaceX is now as much an AI story as a rocket company. It’s floated plans for up to 1m solar‑powered satellites acting as orbital data centres – essentially hundreds of gigawatts of AI power in space over the next few years.

That’s an extreme version of the same problem: AI needs huge amounts of reliable power.

Rolls sits on the other side of that equation. Through SMRs and large‑scale backup power systems, it can provide dense, low‑carbon electricity for hyperscale data centres.

Sure, there’s no formal partnership today. But in a world where SpaceX pushes AI into orbit, I can easily imagine Rolls chosen to power that ecosystem.

What it means for investors

For investors rotating away from AI and SpaceX amid the sell‑off, Rolls‑Royce shares are worth a closer look. 

The company offers exposure to the same long‑term trend: massive growth in data centres and power infrastructure. However, it does so as an established industrial powerhouse, not a speculative AI hype story.

Whoever can deliver reliable power at scale will keep the AI dream alive. Rolls is looking like a top candidate for the job.

Should you invest £5,000 in Rolls-Royce Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls-Royce Plc made the list?

Mark Hartley owns shares in SpaceX.

The post Here’s how Rolls-Royce shares, SpaceX, and the AI trade are all connected — and what it means for investors appeared first on The Twelfth Magpie.

More reading

• The SpaceX frenzy is over – is it time to look at Rolls-Royce shares again?
• Here’s what’s already happened to £5,000 invested in Rolls-Royce shares in January
• Rolls-Royce shares could be set to climb a further 24% says this broker
• Rolls-Royce shares have surged — but what if the real growth is still ahead of the market?
• Could Rolls-Royce shares turn investors into millionaires by the end of the decade?

Why boring investing can beat the thrill of hype when we’re targeting a second income is simple: steady cash beats story stocks most of the time. 

Hyped tech names often reinvest every penny or swing wildly in price, while dull‑sounding firms quietly send out regular dividends that feel like a second paycheque.

As Peter Lynch famously said: “The best companies to own are often the most boring”, and that mindset is tailor‑made for income investing.

So if we want our portfolio to help pay the bills, not just entertain us, where should we look first?

Why boring wins for second income

For income, I’d rather be roughly right with cash flow than precisely wrong with a story. Established businesses with long dividend records give us that predictability. Their dividends may only grow a few percent a year, but it’s growth we can actually plan around.

I tend to think about ‘boring’ income stocks through five simple lenses:

• Predictable payouts and steady earnings.
• Lower volatility than hot-ticket growth names.
• The ability to stay profitable through recessions.
• The ability to quietly compound by reinvesting dividends.
• Low maintenance ‘set-and-forget’ stocks.

So how does that look in practice?

Boring asset classes to target

First, there are the classic dividend stalwarts: companies that have grown or held dividends steady across many years, typically consumer staples, utilities and healthcare.

Real estate investment trusts (REITs) are another popular choice. Forced to distribute at least 90% of taxable income to shareholders, they’re often high‑yield vehicles for property income.

Instead of owning a single buy‑to‑let, you can effectively own slices of diversified portfolios of commercial and residential assets.

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.

Then there are broad‑market index funds. A low‑cost FTSE 100 tracker, for example, provides instant diversification across large UK companies. That’s about as boring as it gets, which is exactly the point.

One stock that fits the bill

Legal & General Group‘s (LSE: LGEN) a good example of a ‘boring on purpose’ UK income stock. In 2024, it grew core operating profit 6% to about £1.62bn and lifted the annual dividend 5% to 21.36p per share.

Recent data from DividendMax suggests the trailing yield is in the high single digits, roughly around 7.7% to 8%.

Management has highlighted how ageing populations create long‑term demand for pensions and retirement products, calling the ageing population “an obvious set of long‑term, positive drivers for the business”. That helps support highly visible, recurring premium income.

Analysts I reviewed put the average 12‑month price target at about 263.76p, slightly below the current price. That tells me most see it as an income compounder rather than a rocket ship.

Of course, it’s not risk‑free. Profits can swing with insurance accounting rules, and sentiment is sensitive to UK rates and markets. But for pure second‑income potential, it ticks a lot of boxes and could be worth considering.

Spreading the risk

Even with a name like L&G, I’d never want every penny in one business or sector. Pairing a financial giant like this with steady utilities such as National Grid — or a retail giant like Tesco – can spread risk across different cash‑flow engines.

Add a cheap FTSE 100 tracker and maybe a REIT or two, and you’ve quietly built a second income strategy that’s anything but exciting. And that might be exactly why it works…

Should you invest £5,000 in Legal & General Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General Group Plc made the list?

Mark Hartley owns shares in Legal & General, National Grid and Tesco.

The post Why boring is often best when targeting a second income from the stock market appeared first on The Twelfth Magpie.

More reading

• How much would you need in a Stocks and Shares ISA to match the State Pension?
• Here’s a quick and easy way to start earning passive income this summer with a spare £1,000
• How much would I need to invest in these FTSE 100 dividend gems for a £29,061 ISA passive income?
• £500 buys £173 shares in this 7.7%-yielding income stock!
• Here’s how to invest £2,000 in a Stocks and Shares ISA for an 8% dividend yield

Earlier this week, Berenberg’s Michael Christodoulou published a fresh note on Barclays (LSE: BARC) shares, and it was notably upbeat.

He initiated coverage with a Buy rating and a 620p target price, implying a roughly 21% rise from the 511.5p close on 23 June 2026.

That’s on a share price that has already surged around 160% over the past two years. So why does he expect even more growth – and is that view widely shared?

Why Berenberg sees more good news

Christodoulou’s core argument is that the sharp share‑price rise is mainly the market catching up with improving earnings rather than an excessive re‑rating.

Barclays delivered diluted earnings per share (EPS) of 43.8p for 2025, up from 36p the prior year. Its return on tangible equity (RoTE) was 11.3%, in line with management’s 11%+ target.

Even after the rally, he still sees the shares as cheap relative to European peers, pointing to a discounted valuation despite that earnings progress. With a trailing price-to-earnings (P/E) ratio around 11.8 and a forward P/E near 9, it’s below the broader financial sector.

In simple terms, he thinks investors are paying a modest multiple for a bank that’s now delivering double‑digit returns.

On top of that, he noted the bank’s clear earnings visibility, largely driven by Barclays’ structural hedge. By locking in interest rates with long‑term swap contracts and renewing them as they mature, the bank smooths out its interest income.

As such, earnings don’t swing around every time market rates move. That gives the bank a more predictable income stream as rates move — a comfort when the macro picture is shaky.

What do other analysts think?

From what I can see, Berenberg isn’t an outlier. Recent broker data shows a cluster of optimistic targets:

Overall, the average 12-month target is around 10% to 20% above the current price, following several upgrades or target increases.

But that doesn’t mean the stock is risk‑free, with politics the key concern. Andy Burnham is widely seen as the key contender to replace Keir Starmer as Labour leader and as Prime Minister, with prediction markets giving him a clear edge. 

Burnham has already called for “strong public control” over key industries and AI, which worries markets that bank regulation and oversight could tighten. If that happens, banks like Barclays might face tougher rules or higher costs.

The bottom line

The UK economy is dealing with a tricky mix of slower growth, stubborn inflation and political uncertainty – none of which is ideal for banks. But Barclays comes into this period with a solid balance sheet, rising earnings and a structural hedge that helps stabilise income as rates shift.

For investors chasing long‑term exposure to UK banking, I’d see Barclays as a reasonable candidate to consider: not bomb‑proof, but supported by decent fundamentals and a line‑up of analysts who still expect further gains.

The big question is whether future regulation and the next phase of the economy will let that structural advantage fully play out.

Should you invest £5,000 in Barclays Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Barclays Plc made the list?

Mark Hartley does not hold any positions in the companies mentioned.

The post After a 160% rally, major brokers still see more gains for Barclays shares. Here’s why appeared first on The Twelfth Magpie.

More reading

• Barclays shares could soon soar another 21%, according to the latest price target
• How many Barclays shares do I need to buy to get a £1,000 passive income?
• Here’s the very latest Barclays share price target upgrade
• 3 reasons to consider buying Barclays shares for an ISA or SIPP at £5
• Up 51% in a year, are Barclays shares still 14% undervalued?

Following Keir Starmer’s resignation, Andy Burnham has positioned himself as the frontrunner for the Labour leadership. UK investors may now be asking: could he make changes that will impact a Stocks and Shares ISA?

According to sources, he’s committed to the existing fiscal rules.

That adds some comfort, but other changes may still arise. Chatter suggests the tax debate could shift towards wealth, assets, and investment income — which is where ISA investors should pay attention.

So what do investors need to know if he does become Prime Minister?

Direct changes unlikely

At present, there’s no clear sign that Burnham wants to tear up the basic ISA wrapper. The annual allowance remains £20,000 across all ISAs for 2026/27, so the tax-free shelter is still a major part of the UK savings system.

The bigger risk is gradual tinkering. In practice, a government that wants extra revenue could lower allowances or tighten rules for higher earners, even if that’s not Burnham’s stated priority.

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.

What is his tax philosophy?

Andy Burnham’s clearest clue is his own language. He’s said:

“We over-tax labour, people’s work, and we under-tax people’s assets”.

That’s important for investors because it points to a system that could lean harder on wealth, property, dividends, and capital gains. 

In plain English, I would read that as bad news for assets held outside tax shelters, and better news for people who hold assets in an ISA.

A useful way to think about it is this:

• Cash and shares inside an ISA should stay protected from CGT and dividend tax.
• Investments outside an ISA are more exposed if CGT is reviewed or pushed higher.
• Property-heavy or dividend-heavy portfolios could feel more pressure than salary income.

Which sectors look vulnerable?

Andy Burnham’s politics lean toward stronger state intervention, so utilities are one area I would watch closely. Severn Trent (LSE:SVT) is a good example.

Its preliminary FY26 results showed revenue of £2.83bn, up 16.6%, and net profit of £371m, while the full-year dividend rose 3.5% to 126.02p per share.

Newly-appointed CEO James Jesic said it had “been another year of exceptional growth” during the company’s February trading update.

But the balance sheet is still heavily geared. With about £10.7bn of debt and £1.8bn of equity, it’s sensitive to tougher regulation or tighter price controls.

The utility company, which supplies water to 8 million people across the UK, also says its dividend policy is to grow by CPIH each year.

That mix can work in stable conditions, but is less forgiving if the political mood turns harder. 

What investors should watch

For British investors, my simple view is this: an ISA still looks like one of the best defensive wrappers in a Burnham-led Labour era. If tax shifts toward wealth, the shelter becomes more valuable, not less.

But I would be more cautious about concentrated holdings in regulated UK utilities, especially if the policy tone becomes more interventionist.

In short, should Andy Burnham enter No.10, it may be wise to consider reducing positions in utility stocks like Severn Trent.

Fortunately, there are several other FTSE 100 stocks that could benefit from his tenure.

Should you invest £5,000 in Severn Trent Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Severn Trent Plc made the list?

Mark Hartley does not hold any positions in the companies mentioned.

The post Here’s what you need to know about how Burnham policies might impact your Stocks and Shares and ISA appeared first on The Twelfth Magpie.

More reading

• Could Andy Burnham derail these FTSE passive income stocks?

When Keir Starmer confirmed he would step down yesterday (22 June 2026), FTSE 100 banks enjoyed a quick relief rally. NatWest (LSE: NWG), Lloyds, and Barclays jumped between 3.6% and 4.7% — comfortably ahead of the Footsie’s roughly 0.6% gain. 

It seems the initial reaction was that the leadership transition would be ‘orderly, not Truss‑like’. Crucially, it didn’t trigger a bond‑market panic. Gilts held steady, the pound only slightly weakened, and markets briefly treated UK banks with relief rather than fear.

Fast-forward 24 hours and that mini-rally has hit a wall, with some banks slipping up to 1%. That suggests the story is already shifting from politics back to fundamentals.

So what does that mean for British investors watching domestic banks?

What do the fundamentals tell us?

NatWest and Barclays have eased by around half a percent today, a tiny move compared with yesterday’s jump. Still, it’s enough to remind us that sentiment can turn quickly when the headlines change.

In my view, the market has simply digested the resignation and gone back to its usual worries: interest rates, loan growth, and long-term income stability.

For now, Starmer’s exit looks like a sentiment catalyst, not a fundamental game‑changer. The numbers underneath haven’t suddenly changed just because No.10 is set for a new occupant. 

However, the Labour leadership contest could still produce very different fiscal or regulatory plans. For example, we might see tougher capital rules or an aggressive windfall tax on bank profits that could alter the earnings outlook and valuations in a much more material way.

That’s the real political risk investors need to watch, not just the day‑to‑day share price moves.

Why I’m still optimistic

The recent volatility may feel unsettling but when you zoom out, the broader picture for FTSE 100 banks still looks encouraging. Over the past month, NatWest is up about 9% and Barclays around 11.8%, reflecting solid earnings momentum rather than just a one‑day political pop.

In particular, I think NatWest is looking more and more like one of the strongest bank stocks to consider for UK investors chasing passive income.

Allow me to explain…

For 2025, the group reported operating profit before tax up 24.4% to £7.71bn, and lifted its dividend 51% to 32.5p per share. That equates to a forward yield close to 5%.

Profit attributable to ordinary shareholders rose to £5.48bn, while net interest income climbed to £12.83bn as higher rates fed through to margins.

Based on the latest valuation data, that translates into a net margin of about 36.5% and a return on equity (ROE) near 14.2%. That’s a healthy level for a UK‑focused retail and commercial bank.

But a sharper‑than‑expected economic slowdown could still derail the story — if interest rates fall too rapidly, net interest margins would tighten and put dividends at risk. Plus, if the government shakeup leads to stricter bank regulation or tax policy, it could dent returns.

So what’s the verdict?

Starmer’s resignation shook markets for a day, but the real story for long‑term investors in FTSE 100 banks is still written in earnings, capital strength, and dividend policy.

Yes, politics matters to the extent it shapes fiscal discipline and regulation. But the case for domestic banks like NatWest and Barclays ultimately rests on whether their fundementals continue to support shareholders returns. 

In my opinion, that narrative hasn’t changed.

Should you invest £5,000 in NatWest Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if NatWest Group Plc made the list?

Mark Hartley owns shares in Lloyds.

The post FTSE 100 banks retreat as investors react to political unrest. What lies ahead? appeared first on The Twelfth Magpie.

More reading

• How much would you need invested for a second income that covers council tax?
• Here’s how to invest £18,182 in an ISA for a 5.5% dividend yield
• Everybody is talking about Space X but I’m more excited by the NatWest share price
• How much do you need in a SIPP to replace the average £39,039 UK salary?
• 2 cheap FTSE 100 stocks that have P/E ratios below 10