There are plenty of FTSE 250 stocks paying generous dividends. And there are many others trading at historically low multiples. However, I’ve found one that looks cheap using both these measures.

Does this sound too good to be true? Let’s find out.

Which is it?

MONY Group (LSE:MONY) helps people save money on household bills and financial products via its five websites, including MoneySuperMarket and TravelSuperMarket. The group’s probably best known for buying MoneySavingExpert.com from financial journalist Martin Lewis in 2012.

Since then, it’s grown rapidly. Over the past five financial years, its earnings per share (EPS) has increased by 56%.

But a falling share price has pushed its price-to-earnings (P/E) ratio higher. The stock’s now (1 July) trading well below its five-year average earnings multiple of 16.5.

Moreover, its dividend’s been increased by 7.9% since 2021. This means the group’s shares are yielding 6.8%, putting it in the top 10% on the FTSE 250.

However, like any business, the group faces a number of challenges, which could threaten its above-average dividend and impact its EPS.

Fears have been raised that AI will provide consumers with more opportunities to use chat interfaces, thereby bypassing the need for price comparison websites. In future, AI agents may act on behalf of users looking for the best deals.

Also, what the group does isn’t unique. There’s plenty of competition out there. Indeed, revenue and earnings growth have both slowed over the past couple of years. Having said that, analysts are forecasting EPS of 18.67p (2026) and 19.99p (2027) over the next couple of years.

No complacency

But MONY Group isn’t ignoring these threats. Earlier this year, it launched the MoneySuperMarket ChatGPT app. It helps its customers “find, compare, and understand deals quickly and simply”. It’s not intended to replace its website. Instead, the company claims it’s “a more conversational companion to our website and mobile app”.

Helping to improve the user experience, there’s no need to re-enter previously supplied information when looking, for example, for car insurance quotes.

The group also has a huge amount of data it’s collected over the years. It’s impossible to put a value on this but the one thing that AI needs in bucketloads is information.

The group also retains a net cash position and enjoys strong brand recognition. MoneySuperMarket is the UK’s most recommended price comparison website. In addition, MoneySavingExpert (MSE) is the country’s most recommended consumer finance brand. Interestingly, it’s also the UK’s third most popular news app. And remember, Lewis, who remains Executive Chair of MSE, has been described as the most trusted man in Britain.

Impressively, if the group’s shares traded at 16.5 times earnings, it means someone investing £10,000 today could see it grow to £13,622. In addition, they could pick up dividends of £680 over the next 12 months. Accordingly, I think the shares could be described as dirt cheap.

On balance, for both its income and growth prospects, I think MONY Group’s a stock to consider.

Should you invest £5,000 in Mony 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 Mony Group Plc made the list?

James Beard owns shares in MONY Group plc.

The post With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

In the years ahead, we’re likely to see the first $10trn company. With numerous technology stocks including Nvidia (NASDAQ: NVDA), Apple, Alphabet (NASDAQ: GOOG), Amazon, and SpaceX (NASDAQ: SPCX) already boasting multi-trillion-dollar market-caps, hitting this milestone seems inevitable.

Will it be Nvidia that gets there first? Or could Alphabet or SpaceX do it? Let’s discuss.

The path to $10trn

To try and answer this question, I’m going to look at three things:

• Market-cap today.
• Current valuation.
• Growth drivers.

By looking at these three different factors, we might be able to get some clues as to which company’s likely to hit $10trn first.

Market-caps

In terms of market-cap today, Nvidia has the largest at $4.7trn (as I write on 30 June). Alphabet isn’t far behind though – it’s at $4.3bn. Zooming in on SpaceX, it’s at $2.2trn. So it’s a fair bit smaller than the other two.

What this means is that it’s going to require the least work, in terms of market-cap appreciation, for Nvidia to get to $10trn. It only needs a little more than a doubling in size to get there. By contrast, SpaceX would need to grow its market-cap almost five-fold from here. That’s a much tougher ask.

Valuations

Turning to valuations, Nvidia currently trades on a forward-looking price-to-earnings (P/E) ratio of 15 using the next financial year’s earnings forecast. Meanwhile, Alphabet’s on 24.

SpaceX doesn’t have a P/E ratio because it’s not expected to be profitable next year. It does have a price-to-sales ratio though – that’s about 30 using next year’s revenue forecast which is very high.

So Nvidia’s the cheapest stock today by a wide margin. This could help it get to $10trn first. Because at current levels, there’s scope for an upward valuation re-rating.

This is less likely with the other two names because they look fairly valued and overvalued respectively (in my view).

Growth drivers

As for growth drivers, all three companies have them. For Nvidia, AI chips should continue to drive growth. But so should new technologies in areas such as robotics and self-drive cars.

For Alphabet, cloud computing and AI (including AI chips) are likely to be key sources of growth. YouTube could be another major driver though.

With SpaceX, I see its two main growth drivers as satellite broadband and AI compute. The AI side of the business is worth highlighting here – if the company can continue landing deals with hyperscalers and AI labs, it could see strong revenue growth in the years ahead.

My call

Putting this all together, I’m going to rule out SpaceX as the first $10trn company. It definitely has some exciting growth drivers but I just can’t see the company’s market-cap increasing five-fold any time soon.

That leaves us with Nvidia and Alphabet. And to be honest, I think both have a decent chance of hitting the milestone first.

My gut feeling however, is that it’ll be Nvidia. With its higher market-cap and lower valuation, I reckon it’s likely to be first to $10trn.

Of course, if AI spending slows dramatically, my thesis could come unstuck. However, with hyperscalers expected to spend a significant amount of money on the AI buildout again next year, I think the company’s prospects look pretty good and that it’s worth considering as an investment.

Should you invest £5,000 in Nvidia 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 Nvidia made the list?

Edward Sheldon owns shares in Nvidia, Alphabet, Apple, and Amazon.

The post Will SpaceX, Nvidia, or Alphabet be the first $10trn stock? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Since June 2025, the share price of Airtel Africa (LSE:AAF), the FTSE 100 telecoms group, has risen 95%. Despite being relatively unknown, it’s done better than some of the world’s largest listed companies, including six of the Magnificent 7.

Is it time for investors to look closer to home when considering their next stock to buy? Let’s see.

What’s going on?

Airtel Africa has been growing rapidly. It now has 183.5m customers across 14 countries. In 13 of these, it’s either the largest or second-largest operator.

The demographics of the continent are perfect for the telecommunications group. Over 70% of Sub-Saharan Africa’s people are aged under 30. And the region’s population is expected to grow by 1bn by 2050. More immediately, the group estimates that its addressable population (aged 15+) will increase by 78m by 2031.

But there are challenges. Africa can be economically and politically unstable. Some of its currencies are extremely volatile. With the group reporting its numbers in dollars, it means it can experience large foreign currency movements.

Also, building telecoms infrastructure is expensive.

On the up

But for now, the group’s going in the right direction. During the year ended 31 March 2026 (FY26), revenue increased 24% and EBITDA was up 30% (both on a constant currency basis) compared to FY25.

Investors will know more later this month, when the group issues its next trading update. Recent history shows there’s often a significant share price movement (up and down) when the company reports its quarterly performance:

• 24 July 2025: +7.3% (Q1 FY26)
• 28 October 2025: +16.4% (half-year FY26)
• 30 January 2026: −6.6% (Q3 FY26)
• 8 May 2026: +0.8% (FY26)

Indeed, the stock has a five-year beta of 1.5. This means it’s 50% more volatile than the wider market. But experienced investors know that it’s the long-term that really matters. And because it’s supplying an essential service to a market that look set to grow for decades to come, I own the stock.

Although higher borrowing costs could be an issue, with approximately 40% of its debt carrying a fixed rate of interest, it has some protection. Also, relative to earnings (1.8 times EBITDA), its lower geared than its two FTSE 100 peers, Vodafone and BT.

I particularly like its mobile money business. It helps promote financial inclusion enabling users to send and receive money via their mobile phones, including those who don’t have a bank account. The group intends to spin-off the division but its IPO has been delayed due to the Iran war.

My verdict

Overall, I remain a fan of the group. In fact, I reckon it’s a bit of a hidden gem, often overlooked in favour of more instantly-recognisable names.

In my opinion, it’s providing a modern-day essential service in a part of the world whose population is growing rapidly. It’s also using the satellites of Starlink (part of Space Exploration Technologies) to give people access to voice, message, and data services, in areas without terrestrial mobile coverage.

That’s why I have it in my Stocks and Shares ISA. In fact, I reckon it’s one of many exciting UK stocks that others could consider adding to their own portfolios.

Should you invest £5,000 in Airtel Africa 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 Airtel Africa Plc made the list?

James Beard owns shares in Airtel Africa plc and Space Exploration Technologies Corp.

The post Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Could this be an amazing opportunity, or a bit of a value trap? Let’s explore.

Buyer beware

The first thing to note is that high yields are often a warning sign of potential trouble. Investors sometimes demand a premium for holding the stock of a company that, they believe, is likely to face a difficult period ahead. And if their fears are realised, its payout could be cut.

That’s probably why Taylor Wimpey’s offered an above-average yield since the pandemic. Higher interest rates and rising construction costs have impacted the demand for mortgages and squeezed the group’s margin. This double whammy has made investors cautious and badly affected the group’s share price.

As the chart of month-end share prices shows, it was last regularly trading below 80p over 12 years ago.

Despite these woes, the group’s maintained a generous dividend for the past five financial years:

• 2021 – 8.58p
• 2022 – 9.40p
• 2023 – 9.58p
• 2024 – 9.46p
• 2025 – 7.62p

What’s happening now?

However, to prove my point about high yields being a possible warning indicator, the group’s payout was cut by 19.5% in 2025. Even so, the stock’s still yielding 9.3%, putting it in the top 10 of FTSE 250 dividend payers.

The fact that the stock’s yield remains high could be a sign that investors are anticipating another cut. Of course, this can’t be ruled out. Indeed, a look at the company’s new distribution policy commits to returning 5% of net assets to shareholders each year by way of dividend, with a further 2.5% through another payout or share buybacks.

The group’s December 2025 balance sheet shows net assets of £4.187bn. Based on the current number of shares in issue, it means the 2026 dividend could be 6p-9p a share (5%-7.5% of net assets).

Management teams tend to prefer share buybacks as their bonuses are often paid on the basis of increasing earnings per share. However, in theory, shareholders should benefit whichever policy is followed.

Even if the dividend was cut to 6p, the stock would still yield 7.3%. There are only 21 on the FTSE 250 offering more.

So does this mean Taylor Wimpey’s shares are dirt cheap?

My view

I wouldn’t go that far. There are still plenty of challenges for the housebuilder to overcome. We don’t know how the Iran war is going to affect inflation in the medium-term. Also, the domestic economy – and housing market — is a little shaky at the moment.

But although I don’t consider it to be dirt-cheap, I still think Taylor Wimpey’s a stock to consider, and not just because of its dividend. The UK housing shortage means the demand for new properties should pick up when consumer confidence returns. And the government’s planning reforms should make it easier to build.

At the moment, the group has plenty of land (76,000 plots) on its books. And it has an order book worth £2.23bn (7,689 homes). Encouragingly, there’s very little debt on its balance sheet.

I already have exposure to the sector through a shareholding in Persimmon. If I didn’t, I would seriously think about Taylor Wimpey as an alternative.

Should you invest £5,000 in Taylor Wimpey 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 Taylor Wimpey Plc made the list?

James Beard owns shares in Persimmon plc.

The post With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

When planning for retirement, the Stocks and Shares ISA has one massive attraction. All the share price growth and dividend income you earn will be entirely free of tax for life.

That means no income tax, no dividend tax and no capital gains tax. This is really handy when building your wealth while working, as your money rolls up tax-free. And it’s even more useful when you retire, as you can take one-off gains or a regular weekly or monthly income without handing a penny to HMRC.

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 can also help you manage your wider tax bill, for example, by upping ISA withdrawals to avoid making too many taxable pension withdrawals in any given year. So how much do you need to bag a decent tax-free income in retirement?

How much capital is needed?

For the sake of this article, I’ve chosen a target income of £375 a week. That works out as £19,500 a year. The amount of capital you need to achieve that depends on the yield across your portfolio:

• With a 4% yield, you’d need £487,500 invested.
• At 5%, the required total falls to £390,000.
• And at 6%, the figure drops to £325,000.

A hugely popular way to bag a higher yield is to invest in a spread of FTSE 100 shares that pay above-average dividends. Some yield as much as 5%, 6%, or well above 7%. This doesn’t simply mean going for the highest yield you can find, but looking for companies that have the ability to maintain and increase shareholder payouts over time.

Most companies aim to increase their dividends each year but, inevitably, some are better at it than others. Cigarette maker British American Tobacco (LSE: BATS) boasts a particularly strong track record. It has increased dividends every year this millennium.

Worth a look?

It’s able to do that because tobacco makers generate plenty of cash from their addicted customer base. Although smoking is declining in the West, British American Tobacco still sold 465bn cigarette ‘sticks’ in 2025. It’s done this by using its brands and scale to take a bigger share of a shrinking market. The board’s also targeting new revenue lines from smokeless alternatives, vapes and nicotine pouches.

Today, British American Tobacco has a trailing yield of 5.1%. That’s comfortably above the average FTSE 100 of yield 3.3%. While often seen as an income stock, share price growth has been pretty impressive. The stock’s up 38% in the last year. That’s on top of the income.

Share price growth’s never guaranteed. Nor are dividends. The tobacco sector will remain under constant regulatory pressure and may be prone to expensive class action lawsuits. The bills could run into billions. And, of course, smoking kills.

I think British American Tobacco shares are worth considering from an investment point of view, but understand many won’t want to buy the stock for other reasons. They don’t need to, because there are lots of other FTSE 100 shares offering similar income and growth prospects.

Should you invest £5,000 in British American Tobacco P.l.c. 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 British American Tobacco P.l.c. made the list?

Harvey Jones does not hold any positions in the companies mentioned.

The post How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

The FTSE remains one of the richest hunting grounds for investors seeking long‑term second income.

With yields still comfortably above global comparable averages, the chance of building a dependable cash stream has rarely been greater.

M&G (LSE: MNG) remains a standout stock here, thanks to its combination of scale, stability and unusually generous payouts.

So, what sort of returns are in view?

Rising dividends forecast?

M&G has a long history of delivering market-beating dividends to shareholders. Indeed, focusing on increasing these rewards is part of its corporate strategy, executed through a progressive dividend policy.

This involves boosting the dividend in line with earnings per share growth. But if earnings fall in a year, the payout is held steady rather than reduced.

In just the past five years, this policy has seen dividends rise from 2021’s 18.3p to 2025’s 20.5p. And these generated average annual respective dividend yields of 9.2%, 10.4%, 8.9%, 10.2%, and 7.2%. By contrast, the present FTSE 100 average is 3.1% and the FTSE 250’s is 3.4%.

Of course, dividend yields can rise and fall as share prices and annual payouts alter. But analysts forecast M&G’s dividend yield will rise from the present 6.2% to 6.3% this year, 6.5% next year, and 6.7% in 2028.

How much second income?

So £20,000 worth (the same as my holding) of 6.7%-yielding M&G stock would generate £19,012 in dividends after 10 years.

The figure also factors in the payouts being reinvested in the stock to harness the full turbocharging power of dividend compounding.

After 30 years — the end of the standard investment cycle for long-term investors — the dividends would rise to a (not guaranteed) £128,434. The total value of the holding (including the £20,000 original investment) could be £148,434 by then.

And that would pay a yearly income of £9,945, just from dividends!

Can the core business sustain this?

The final piece of the puzzle is whether M&G’s underlying business can keep funding these generous dividends. And ultimately this depends on sustained growth in profit over time.

There are risks to the investment giant, as with all businesses, of course. One is a tightening of regulatory capital requirements. That could limit how much surplus capital M&G can return to shareholders in more volatile market conditions.

Another is continued rises in the cost of living, which could prompt customers to reduce account size or to close them. That would decrease the firm’s fee income.

That said, analysts project that M&G profit will grow by a whopping yearly average of 27.1% over the medium term at least.

My investment view

M&G’s combination of high yields, progressive dividend policy and strong profit growth forecasts is why I bought it in the first place. As all are still in evidence, I will buy more very shortly.

And the same factors make it one of the most appealing choices in the FTSE for long-term investors to consider, in my view.  

The company’s clear commitment to maintaining and growing shareholder rewards further strengthens the investment case for my long‑term income portfolio.

Should you invest £5,000 in M&g 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 M&g Plc made the list?

Simon Watkins owns shares in M&G.

The post Here’s how I’m targeting £9,945 a year in second income from this overlooked FTSE gem appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Despite a sizeable pullback in March, Barclays‘ (LSE: BARC) shares performed well in the first half of 2026. Over the six-month period, they rose around 7%.

I think there’s a good chance they’ll do even better in the second half. Here’s why.

Multiple growth drivers

The way I see it, the set-up for Barclays is very favourable right now. For a start, the bank looks well positioned to generate income growth in the short/medium term.

One key driver here is likely to be investment banking revenues. With mega IPOs like SpaceX taking place, and firms of all shapes and sizes raising capital and doing acquisitions to fuel growth, there should be plenty of opportunities for the firm here.

Another is trading revenues. Financial markets continue to be volatile due to economic/geopolitical uncertainty and this should be creating plenty of opportunities for Barclays’ equity and fixed income traders.

Additionally, there’s wealth management. With markets near all-time highs, Barclays’ Private Bank and Wealth Management (PBWM) division should be cleaning up at the moment, as fees here are linked to assets under management.

Trading at a discount

A second reason I’m bullish on the shares is the valuation. It’s still pretty low, especially compared to some other large-scale banks.

With City analysts expecting earnings per share of 52.5p from the bank this year, Barclays is trading on a forward-looking price-to-earnings (P/E) ratio of just 9.7 right now. By contrast, JP Morgan – which also has trading, investment banking, and wealth management divisions – is about 15.

It’s worth noting that brokers have been raising their price targets recently and many of these are well above the current share price. For example, Jefferies just went to £5.90, which is about 16% above today’s share price.

This kind of broker activity can help to boost a stock. So it’s another factor in the bull case.

Upward share price trend

Finally, the share price is a reason to be optimistic in relation to the outlook. Because it’s in a strong upward trend and trends often stay in place for a while.

Moreover, it recently breached the 500p mark and is currently at levels not seen since 2007. That means there’s likely to be minimal overhead resistance – it’s unlikely there are many investors sitting on losses and waiting to breakeven to sell.

Worth a closer look?

Put all this together and there’s a lot to like about Barclays’ shares, in my view. Ultimately, we are looking at a stock that offers the winning combination of earnings growth potential, a low valuation, and share price momentum.

There are risks around an economic and/or consumer slowdown, of course – banks are always vulnerable here. All things considered however, I believe the shares are worth a look as we start the second half of 2026.

But Barclays isn’t the only stock I like the look of right now…

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?

Edward Sheldon owns shares in JP Morgan

The post Why Barclays shares could have a huge second half of 2026 appeared first on The Twelfth Magpie.

Motley Fool UK 2026

But does this now present an amazing buying opportunity to consider? Let’s see.

Confession time

I acknowledge that investing in the sector might not appeal to everyone, but I used to own BP shares. In fact, I sold them midway through the Iran war. Now, I’d like to claim that I got rid of them when the group’s share price was close to its 12-month peak, but I didn’t. However, I was content with my profit, having bought them for 362p a year earlier.

But readers of The Twelfth Magpie know that we always talk about the benefits of long-term investing. Timing the market’s a mug’s game. In light of this, selling my shares after only 12 months opens me up to the charge of hypocrisy. However, in my defence, I thought the war was about to end and that the oil price was close to its peak. The shares were last changing hands for more than 600p just before the Deepwater Horizon disaster in 2010.

However, if BP shares are so sensitive to the oil price, it begs the question: what’s the point of them? It’s impossible to predict future energy prices with any accuracy, therefore what’s the investment case for owning part of the oil and gas giant?

I can think of two reasons…

The bull case

Firstly, there’s its dividend. Based on amounts paid over the past 12 months, the stock’s currently (1 July) yielding 5.4%. This puts it in the top 13 of FTSE 100 dividend payers.

Of course, payouts are never guaranteed. In fact, the group’s dividend was cut after the tragic events of 2010, and by 50% during the pandemic. However, post-Covid, it’s been steadily increased once more. In dollar terms, the group’s most recently quarterly payment was 79% of its pre-cut level.

Secondly, compared to others in the sector, the stock’s trading at a lower earnings multiple. For example, if it was valued the same as Shell, BP’s share price would be 15% higher.

My view

So do I want to own BP shares once again? To be honest, not at the moment.

One of the unexpected consequences of the war is the lifting of sanctions that had prevented the export of Iranian oil. This decision might be reversed at a later date but, for now, it could be significant because the country’s believed to have the third-highest level of reserves.

Flooding the market with Iranian oil could have a big impact, especially when there’s already expected to be an over-supply when shipping movements in the Gulf return to normal. Some analysts are expecting Brent crude to fall to $55 a barrel. It was last at this level in early 2021, when the BP share price was around 250p.

At the moment, I think there’s more uncertainty than usual surrounding the oil price. On this basis, I think there are better opportunities to consider elsewhere, despite the obvious attraction of BP’s dividend.

Should you invest £5,000 in Bp P.l.c. 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 Bp P.l.c. made the list?

James Beard does not hold any positions in the companies mentioned.

The post Back below 500p, is it time to consider BP shares again? appeared first on The Twelfth Magpie.

Motley Fool UK 2026

Lloyds (LSE: LLOY) shares have pushed back above £1, a psychological pressure point it has struggled to decisively break through since 2008.

Many investors will worry that the bank will again struggle to sustain a move much further beyond this long‑standing barrier.

But looking at its strong profit forecasts, capital strength, and rising shareholder returns, I think there is room to go much higher.

So, how high is that exactly?

What’s fair value here?

‘Fair value’ is the true worth of any share, which reflects the long-term fundamentals of the underlying business. It is very different to ‘price’, which is the short-term figure buyers and sellers agree to deal on at any given time.

The difference between these two measures is key in long-term investors’ ability to produce outsized profits. This is because historically share price trend to their fair value over time.

In my experience as a senior investment bank trader, discounted cash flow (DCF) analysis is the best way of determining fair value. It does this by taking long-term cash flow projections for the underlying business and discounting them back to today. That produces a per-share current value.

Analysts’ estimates for the discount to be applied can vary, which can lead to differing DCF outcomes sometimes. But my DCF analysis — including an 8.4% discount rate — shows Lloyds shares could be 47% undervalued at their current £1.11 price.

That suggests a fair value of £2.09 — nearly double where they are now.

If the historical trend for share prices converging to their fair value continues, this represents a terrific potential buying opportunity today, if that DCF modelling holds good.

While-u-wait

In the interim convergence period, investors could expect to receive rising dividend payments. Forecasts are that the current 3.5% dividend yield will increase to 4.1% this year, 4.8% next year, and 5.6% in 2028.

So, a £20,000 holding on the forecast 5.6% as an average would make £14,968 in dividends over 10 years and £86,893 after 30 years. This also assumes the payouts are reinvested back into the shares to harness the full supercharging power of dividend compounding. And dividends can fall as well as rise over time, of course.

Nevertheless, at that point, the holding’s total value would be £100,893, which would pay an annual income of £5,650!

My investment view

I already have holdings in two other banks — HSBC and NatWest. Owning another would disturb the risk/reward balance of my portfolio. However, Lloyds is now on my watchlist to buy if either of these start to underperform. 

I think strong profit growth will power major gains in its share price long term. And I think it will support sustained increases in dividends, generating significant second income.

A risk to its profits is a sharper‑than‑expected downturn in the UK economy, which could lift loan impairments. Another is any tightening of regulatory capital requirements that might limit the pace of dividend increases.

Nonetheless, analysts forecast Lloyds’ profits will grow by a very robust 10.1% a year over the medium term at least.

Its latest results — Q1 2026 — saw profit before tax soar 33% year on year to £2bn. And management also restated its return on tangible equity target — a key profit marker for banks — of over 16% for the full year.

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

Simon Watkins owns shares in HSBC and NatWest.

The post Is there any value left in Lloyds shares now they’re over £1? appeared first on The Twelfth Magpie.

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A Stocks and Shares ISA is still one of the most powerful ways to build long‑term, tax‑efficient wealth.

It is exempt from income and capital gains tax but also it allows withdrawals at any point, unlike private pensions. As from 6 April next year though, savers under 65 will face a 22% tax charge on interest earned from uninvested cash held within the ISA.

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.

Nevertheless, insurance and investment giant Legal & General (LSE: LGEN) continues to offer one of the most generous, well‑covered dividends in the index. And this is backed by robust cash generation, a capital‑light business model, and a progressive dividend policy aimed at increasing returns.

So, what sort of income am I targeting here?

What does the dividend policy mean for returns?

Legal & General’s progressive dividend policy is designed to increase payouts along with growth in earnings per share. But if there is a dip in earnings, the dividend is not automatically cut — it is held steady instead.

Since 2021, it has generated respective average annual dividend yields of 6.2%, 7.8%, 8.1%, 9.3%, and 8.3%. The variation in returns despite rising payouts underlines dividend yields can go down and up alongside changes in share price.

However, all these returns are way higher than the current FTSE 100 average of 3.1% and the FTSE 250’s 3.4%.

What are the forecasts?

Analysts project the firm’s dividend yield will rise to 7.8% this year, 8% next year, and 8.2% in 2028.

In income terms, the forecast 8.2% as an average would generate £25,284 in dividends on a £20,000 holding after 10 years. This also incorporates dividend compounding being used to turbocharge those dividend returns over time.

After 30 years on the same basis, the dividends would jump to £212,146. Including the initial £20,000 stake, the holding’s total value would be £232,146 by then.

And that would pay a yearly income of £19,036!

What about share price gains too?

Historically, share prices tend to converge to their ‘fair value’ over time. And the best way I have found of identifying this value is discounted cash flow (DCF) analysis.

This works by forecasting a company’s future cash generation and converting it into today’s value. When those forecasts are less certain, the discount rate applied increases. Consequently, different assumptions here can cause varied outcomes in analysts’ DCF modelling.

My DCF analysis — including an 11.6% discount rate — shows Legal & General is 55% undervalued at its current £2.86 price.

That puts fair value around £6.36 — more than twice the present level.

So, if share prices do continue to trend to fair value, and the DCF modelling holds good (which are not guaranteed), then the £20,000 holding would be worth £44,475.

My investment view

Ultimately, share price gains and dividend rises are driven by sustained increases in a company’s earnings.

A risk for Legal & General is a sharp downturn in financial markets that could squeeze fee income. Another is tighter regulatory capital rules that could reduce free cash flow.

Nonetheless, analysts forecast the firm’s earnings will grow at a very robust annual average of 14.6% over the medium term at minimum.

Given this, I will buy more of the shares very soon. And I also have my eye on similarly deeply undervalued stocks with high yields in other sectors too.

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?

Simon Watkins owns shares in Legal & General.

The post How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income? appeared first on The Twelfth Magpie.

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