Dividend yields

High dividend yields can be a sign of risk. But the likes of Legal & General have been pretty consistent when it comes to paying out.

Source: Fiscal.ai

So what are investors worried about? I think a lot of the time, the answer is that they don’t really know. 

Insurance companies are complicated. And that brings uncertainty. Solvency ratios and accounting conventions can be hugely complicated. Even for industry specialists. This, understandably, makes investors wary. And the high dividend yields are essentially compensation for the unknown risks.

My top picks

I’m not claiming to be able to understand insurance accounting better than the specialists. But I do own shares in three insurance companies:

• Berkshire Hathaway
• Molina Healthcare
• Admiral (LSE:ADM)

In dividend terms, these are unusual. Two don’t pay one at all and the third has just lowered its distribution.

The reason I own all of these is the same. I think there’s something unique about each that puts them ahead of the competition. Berkshire has a powerful balance sheet and Molina has the lowest costs in its industry. But with Admiral, it’s something else entirely.

Why Admiral?

Ultimately, insurance is about taking in more money in premiums than you pay out in claims. And Admiral is the UK’s best at doing this. Its underwriting margins consistently lead the industry and that’s no accident. It’s due to the firm having better data than its rivals.

Could artificial intelligence (AI) close this gap? The honest answer is I’m not entirely sure and that creates a risk for the company. The issue isn’t that other insurers will have better data – I don’t think that’s likely. It’s that they might be able to do more with less.

Even if this happens, I still think better data should give Admiral an advantage. That’s why I own the stock, but I’m watching the AI threat closely.

Passive income

The latest dividend from Admiral is set to hit my account tomorrow (5 June). And it’s going to be lower than in previous years. That might look like a sign of weakness, but it isn’t. The firm isn’t making less money, it’s just changing how it uses it. 

It’s going to start channelling cash towards share buybacks to fund its employee compensation scheme. And I’m in favour of that move.

Source: Fiscal.ai

Admiral’s share count has been increasing by just under 1% a year. That somewhat offsets the value of the cash returned via dividends.

Even with the lower dividend, the yield is still above the FTSE 100 average. So it’s still my top choice of the UK insurers.

Being a good investor

Billionaire investor Warren Buffett says that risk comes from not knowing what you’re doing. I think that’s especially true of insurance stocks. It can be tempting to take a high dividend yield in exchange for risks that are hard to quantify. But I think that’s a dangerous strategy.

Far better, in my view, to focus on companies with a clear competitive advantage. That’s why Admiral’s the stock on my to-buy list.

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

Stephen Wright owns shares in Admiral, Berkshire Hathaway, and Molina Healthcare.

The post Income investors love insurance stocks. Here’s my top pick from the FTSE 100 appeared first on The Twelfth Magpie.

It has a long record of strong earnings, disciplined underwriting, and the kind of dependable cash generation that supports generous, recurring dividends.

So, how much passive income from dividends are we talking about?

Rising payouts forecast?

Admiral’s present dividend yield is 5.2% — well above the FTSE 100’s current average of 3.1%. These returns can go up or down over time, as share prices and annual dividends alter. But analysts project the insurer’s will rise to 5.8% next year and to 6.4% in 2028.

Based on the forecast 6.4% as an average, my £20,000 holding in the firm could earn me £17,865 in dividends after 10 years. The number also assumes the payouts are reinvested in the stock to capture the full supercharging effect of dividend compounding. It is a similar concept to allowing interest to quietly accrue in a bank savings account. But the effect on dividend income over the years can be stunning.

After 30 years on the same basis, this would rise to £115,725. At that point, the holding’s total value (including the £20,000 stake) would total £135,725.

And this would deliver a yearly income of £8,686!

Does the core business support such numbers?

Dividends ultimately rise or fall with the strength of the business itself. This raises the key question of whether Admiral’s earnings engine can keep powering those numbers.

A risk is competitive pressure in UK motor pricing that could limit the firm’s ability to pass on higher costs. This could put downward pressure on earnings momentum. Another is a sharp fall in used‑car prices due to the continued rise in the cost of living. That would mean Admiral gets less money back when it sells the remains of written‑off cars.

Nevertheless, its full-year 2025 results released on 5 March 2026 saw record profits. Group profit before tax rose 16% year on year to £957.9m, highlighting underwriting discipline and improving claims trends.

Earnings per share also increased 16% to 247.4p, underlining the scalability of its capital‑light model. Meanwhile, insurance revenue climbed 9% to £4.98bn, illustrating firm pricing and steady customer growth in UK Motor and Household.

Together, these drivers point to a business with broad‑based momentum and the operational muscle to grow its dividends over time.

My investment view

Admiral keeps proving its ability to turn disciplined underwriting into rising profits and dependable cash returns, in my view.

The latest results show a company with real earnings momentum, capital strength, and a dividend policy that rewards patient shareholders.

I like that Admiral does not need heroic growth assumptions to deliver attractive long‑term income. It simply needs to keep doing what it already does well.

With forecasts pointing to rising payouts and steady, repeatable profitability, the shares look worthy of attention from income‑focused investors.

For me, it remains a high‑quality FTSE 100 name that can anchor a passive‑income portfolio for years to come. Consequently, I will buy more of the stock very soon.

And I have my eye on ultra-high-yielding shares in other sectors too.

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

Simon Watkins owns shares in Admiral.

The post How much do I need to invest in this FTSE 100 passive income star to aim for £8,686 a year in dividend payouts? appeared first on The Twelfth Magpie.

Despite the Iran War, 2026 has (so far) been another solid year for the stock market. The FTSE 100 index is up 3% since 1 January. Yet a lot of quality blue-chips still offer terrific all-around value.

We’re talking about companies with high dividend yields while also trading at heavily discounted valuations, whether measured by:

• Price-to-earnings (P/E) ratio.
• Price-to-earnings growth (PEG) ratio.
• Price-to-book (P/B) ratio.

Here are two that I’ve spotted: Admiral Group (LSE:ADM) and Barratt Redrow (LSE:BTRW). Want to know why I believe they’re hot bargains to consider?

Value to salute

Admiral offers the dual-benefit of a low historical P/E ratio and a FTSE-beating dividend yield. Its earnings multiple for 2026 is just 12.8 times. That may not exactly be rock-bottom but it’s significantly below the 10-year average, which is 16–17.

Meanwhile, the payout yield is a chunky 5.5%.

Admiral does face mounting risk as inflation rises, pushing up claim costs . But I think the insurer is better placed than many other UK shares to weather this storm.

Why? Its focus on the ultra-stable general insurance market, where revenues remain reliable across the economic cycle. This is especially so in the motor segment, where Admiral leverages its enormous brand power to generate most its earnings.

Crucially, Admiral has other qualities it can use to grow profits despite cost pressures. According to Hargreaves Lansdown notes, these include “its data-led underwriting approach and strong reinsurance relationships.”

Another top FTSE bargain?

The risks to Barratt Redrow have risen sharply since late February. Hopes of interest rate cuts to boost the housing market have disappeared. Now the focus is on potential rate hikes, and the danger this poses to FTSE 100 housebuilders.

Yet I can’t help but think Barratt’s valuation remains too low. I’m drawn in by its 5.5% dividend yield for this financial year. Arguably, it’s even more impressive on other value metrics, including:

• A forward P/E ratio of 10.4, below the 10-year average of 15–16.
• A PEG ratio of 0.1
• A P/B ratio of 0.5.

For the final two ratios, a reading below 1 suggests a share is undervalued. So do the potential rewards of buying Barratt shares at the current price outweigh the risks?

I think so. Over the long term, I believe the stock could snap back as the soaring UK population drives demand for new homes and with it property prices. Estate agent Savills expects average home values to rise more than 22% over the next five years as the market picks up momentum.

Barratt’s enormous land bank puts it in a strong position for when conditions rebound too. It expects to have a hefty 7,000–9,000 plots at the end of this fiscal year.

The post These 5%-yielding FTSE 100 dividend shares are on sale today! appeared first on The Twelfth Magpie.

Most of the decline came on Thursday (7 May) when the stock fell 5.41%. Am I worried? No. Am I buying more? Maybe…

Why Admiral?

The FTSE 100 has a lot of insurance stocks. And the vast majority, I’ve no interest in buying whatsoever.

Admiral, however, is the exception. The reason is simple – it has a massive competitive advantage in a really important industry.

Car insurance is something people have to buy (if they want to drive). And insurance is about pricing risk accurately. 

Admiral’s big advantage comes from its data. Its telematics products give it better information about how people drive than its competitors.

That allows it to be more accurate with its pricing. And it’s why the company’s underwriting margins are consistently ahead of the industry.

What could go wrong?

When it comes to car insurance, I think Admiral is the best in the business. But I’m always aware of what could go wrong.

The most obvious candidate is inflation. If car repairs become more expensive, costs go up and this weighs on profits. 

That’s not the biggest issue – Admiral can adjust its prices the following year. But I’m also mindful of longer-term threats. 

Artificial intelligence (AI) is the thing to keep an eye on. Even with weaker data, it might allow Admiral’s competitors to close the gap a bit. 

That, however, isn’t why the stock fell on Thursday. It’s something much more predictable and much less significant.

What actually happened?

On Thursday, the stock reached its ex-dividend date. So anyone who bought the stock after the open doesn’t receive the next dividend. 

In this case, it’s actually a pretty big payout. It combines a 17p normal distribution with a 73p special dividend for a total of 90p. 

That means the stock on Thursday was genuinely worth 90p less than it was on Wednesday. It’s the same business, but without a 90p distribution.

Admiral shares immediately fell 181p, or 5.41%. But the dividend accounts for half of that leaving a decline of around 2.7%.

On a day when the FTSE 100 fell 1.44%, I’m not sure that’s a big deal. It’s certainly not a huge unjustified sell-off that creates a buying opportunity.

Should I buy it?

I bought my stake in Admiral in February, when the stock was trading at £28.24. After this week’s declines, it’s currently at £31.66. 

On top of this, any shares I buy today won’t come with the next dividend, which is due to be paid in June. That’s also worth noting.

My Admiral stake is currently neither here nor there. It’s not a big part of my portfolio, but I’m ideally looking for a cheaper price.

I’m going to bide my time on this one. That might turn out to be a mistake, but it’s probably better to miss an opportunity than to overpay.

The bottom line, though, is that Admiral shares are down 5.76% this week. But I’m neither concerned by the decline nor looking to seize an opportunity.

The post My top FTSE 100 insurance stock fell 5.76% this week! Here’s what I’m doing appeared first on The Twelfth Magpie.

Suppose you’ve got £15,000 just itching to be put to good use. What dividend income could it deliver for you this year? And what might that grow to become in decades from now?

Crunching the numbers

To calculate potential returns from dividend shares, we need to make some assumptions regarding yield. Fortunately, we can achieve relatively accurate estimates by using typical market averages.

For example, a portfolio of dependable, high-yielding dividend shares could return between 6% and 8% a year. That means an investment of £15,000 could return £900-£1,200. That’s not a bad start. By reinvesting those dividends, the pot would compound steadily, while also benefiting from any increase in payouts.

After 10 years, it could have reached over £39,000 (accounting for average market growth). At that point, it would payout between £2,340 and £3,120 a year.

But is that a realistic goal? With the right stocks, yes it is.

Why careful stock-picking makes a difference

When starting out, investors should consider reliable, well-established dividend-payers such as Imperial Brands, British Land and Admiral Group (LSE: ADM).

The key factors to consider include:

• Earnings coverage.
• Cash flow.
• Debt manageability.
• Payment track record.

In Admiral’s case, dividend payments take up 81.8% of earnings (the full dividend is 2.05p, while earnings per share is 2.5p). That’s a lot of earnings being spent on shareholders. Fortunately, cash flow helps, covering dividends 1.4 times.

Still, that’s only barely sufficient — if profits dipped, it might have to cut or suspend dividend payments. Ideally, it would be better to look for companies with stronger coverage.

Sounds good, so is it worth considering?

On the plus side, Admiral’s been paying dividends consistently for 22 years without a pause. That shows just how dedicated the company is to keep shareholders happy.

This is further supported by the company’s exceptionally high return on equity (ROE), at 53%. However, the balance sheet looks a little stretched, with current assets lagging liabilities by a long margin. This may be due to accounting discrepancies when it comes to insurance but still, it’s worth keeping an eye on.

Long story short? Admiral looks like a highly profitable company that’s happy to return much of those profits to shareholders. However, by doing so, it may be stretching its finances a bit, which is risky.

The bottom line

A solid portfolio of highly-established dividend-payers can deliver far better returns than a standard savings account. But it’s important to weigh up the risks versus the rewards. Some of the best dividend payers push a fine line between maintaining operations and keeping shareholders happy.

A solid track record combined with strong earnings and manageable debt is the ideal combo to look for. In Admiral’s case, I think it’s worth considering because it has a proven history of balancing debt obligations with dividend payouts.

The post How to invest £15k in dividend shares to aim for £1,000 of passive income this year appeared first on The Twelfth Magpie.

And its recent performance hints at something more interesting beneath the surface. The business is strengthening, yet the share price still feels restrained.

That gap could be where the opportunity lies for investors who value both income and mispricing.

Increasing dividend returns?

UK insurance giant Admiral’s (LSE: ADM) current dividend yield is 5.4% — way higher than the FTSE 100’s 3.1% average.

However, analysts forecast this will rise to 5.5% this year, 6.2% next year, and 6.8% in 2028.  So, my £20,000 holding in the stock would make £19,402 in dividends after 10 years and £132,929 after 30 years. This period is commonly seen as a standard investment cycle for long-term investors, such as me.

These numbers are based on the average 6.8% forecast yield, although these can alter over time — up or down.

They also assume that the dividends are reinvested into the stock to harness the supercharging effect of ‘dividend compounding’. It is like leaving interest to grow over the years in a savings account.

After 30 years on this basis, the holding’s value would be £152,929.

And this would generate an annual income from dividends of £10,399!

Rising share price?

Share prices tend to converge to their ‘fair value’ over time. This value represents the true worth of the underlying business, while price is simply whatever the market will pay at any point.

Discounted cash flow (DCF) analysis identifies any stock’s fair value by projecting future cash flows from the business. It then discounts these back to today.

DCF modelling varies according to the assumptions used by analysts — some more bullish than mine and others more bearish. But based on my DCF assumptions — including a 7.2% discount rate — Admiral shares are 48% undervalued at their current £33.50 price.

On that basis, I calculate a ‘fair value’ of around £64.42 — nearly twice the level they are now.

So this price-to-valuation gap suggests a potentially terrific buying opportunity today, if those DCF assumptions hold good.

Supported by growth momentum?

A risk to Admiral is the high level of competition in the insurance sector, which may squeeze its margins. Another is any further surge in the cost of living that may prompt customers to cancel policies.

However, its 2025 results, released on 5 March 2026, showed profit before tax jumping 16% year on year to £958m. The rise was powered by Admiral’s core underwriting and cost‑discipline initiatives. Insurance revenue increased 9% to £4.98bn, highlighting continued momentum across UK Motor, Household, and European lines as pricing and customer retention improved. Turnover remained buoyant at £5.9bn, reflecting the successful integration of the ‘More Than’ business into Admiral’s UK portfolio.

These numbers highlight a business with strengthening fundamentals and operational leverage that should continue to drive earnings growth ahead, in my view.

My investment view

This combination of rising dividend potential, strengthening operational momentum, and deeply-discounted share price means I will be buying more of the stock soon.

I also think these elements make it a compelling candidate for long‑term investor consideration.

In short, it offers the rare blend of dependable income today and the possibility of meaningful gains as the market closes the gap between price and value.  

The post A 6.8% forecast yield! 1 often-overlooked FTSE 100 income stock to buy today? appeared first on The Twelfth Magpie.

The Tesco share price is down just 5% over the last turbulent month. Given the scale of losses elsewhere, that’s pretty impressive. It’s not as impressive as FTSE 100 motor insurer Admiral Group (LSE: ADM), though. Its shares climbed more than 11% over the same period. Only two FTSE 100 stocks have done better — oil giants BP and Shell. That’s pretty remarkable. Can Tesco and Admiral continue to do well?

Solid FTSE 100 stocks

I’d have thought Tesco would be on the front line of current volatility. As oil prices rise, food production and transport costs could jump too. The cost-of-living crisis is back even before it was over. There have even been lurid headlines warning of food rationing. And with all the political noise around profiteering, Tesco may struggle to pass on higher costs without attracting criticism.

If costs rise faster than Tesco can increase prices, margins could be squeezed. On the other hand, it may be better placed than rivals to withstand a price war.

The Tesco share price has been powering on for some time. As of early this morning it was up 45% over the last year and had doubled over five years. It isn’t especially cheap as a result, with the price-to-earnings ratio nudging 17. The dividend yield has dipped below 3%.

I prefer to buy shares after a pullback, when valuations tend to be more attractive and yields higher. That said, Tesco is holding up well, and I can see why investors might still consider buying its shares.

But why is Admiral flying? If customers are feeling the pinch, I’d expect them to shop around for cheaper car and home insurance, intensifying competition in an already cut-throat market. It could be that the shares are still getting a lift from a strong set of results on 5 March. Pre-tax profit jumped 16% to a record £957.9m, while the customer base grew 7%.

The board also raised the dividend by 7% to 205p and treated investors to a special payout of 17.2p per share. Admiral isn’t just a UK story either, as the board highlighted strong results in France and a rapid recovery in Italy. Unlike Tesco, Admiral’s shares were treading water before this recent surge. They’re still up just 9% over one year and 8% over five.

There are risks here too. Beyond squeezed customers, claims inflation remains a concern, as higher repair and replacement costs could eat into margins if pricing doesn’t keep pace. In contrast to Tesco, Admiral still looks reasonably priced, with its P/E ratio just under 13. The income is juicier too, with a trailing yield of 5.1%.

I’m surprised both stocks are holding up so well. Both could still struggle if Middle East tensions intensify. But I think they’re worth considering, especially Admiral for that income stream. Personally though, I’m on the hunt for FTSE 100 shares that are cheap after taking a much bigger beating, but have long-term recovery potential. I can see plenty out there right now.

The post Should investors consider buying resilient Admiral Group and Tesco shares as markets wobble? appeared first on The Twelfth Magpie.

In other words, businesses that can keep paying (and ideally growing) their dividends through good times and bad. How does that look in practice?

Well, here are two FTSE-listed companies that not only fit the bill but also look heavily undervalued right now.

MONY Group

MONY Group‘s (LSE: MONY) a good example of this type of business. It runs a host of comparison sites which earn fees by connecting customers with insurers, lenders and other providers. It’s a simple online model that doesn’t require heavy capital spending.

Revenues have been growing steadily, recently hitting a record £445m, with earnings slowly rising 1%-2% a year. That indicates steady growth despite a tough backdrop for some consumer markets. And with cashflow improving, the board recently launched a share buyback, suggesting confidence in the business.

But the real kicker lies in the low valuation. Estimates suggest it’s trading at around 53% below fair value using a discounted cash flow (DCF) basis. So why is the market so pessimistic about its long-term prospects?

It may be because it’s exposed to online advertising trends and competitive pressure in the price comparison sector. A downturn in customer activity or higher costs could put pressure on profits and future dividends.

But the yield makes it undeniably attractive, sitting at roughly 7.5%. The payout ratio of 82.4% is a bit high but okay for now. Encouragingly, its debt-to-equity ratio is only 0.14, meaning borrowings are very low, and return on equity (ROE) is a punchy 34%.

That shows just how well management is squeezing a lot of profit out of shareholders’ capital.

Admiral Group

In 2024, Admiral Group (LSE: ADM) reported an impressive set of numbers, with profit before tax jumping 90% to about £839m. Earnings per share (EPS) rose an astonishing 95%, and turnover grew 28% to just over £6.1bn.

But it’s important to note these are likely one-off results. That bounce reflects an unusually strong recovery in the UK motor insurance sector. A drawn-out period of heavy claims inflation means premiums have been raised to catch up with rising repair and parts costs.

The main watchpoint is leverage: a debt-to-equity (D/E) ratio of 1.3 is on the high side, which makes it more sensitive to shocks, and the insurance cycle can turn quickly if claims costs spike faster than premiums.

Still, the valuation and income profile are appealing. Trading at roughly 48% below its estimated DCF fair value, it offers a 6.4% dividend yield and payout ratio of 83.2%. High, but acceptable, given its profitability — ROE at 53% is exceptionally high for an insurer.

A wealth of opportunities

For UK investors aiming to build a sustainable second income stream, identifying the right characteristics makes all the difference. Attractive yields, strong return on equity, and undervalued share prices are just three important factors to consider.

MONY Group and Admiral are just two examples of undervalued dividend stocks to consider right now. But with geopolitical and economic shocks happening on a daily basis, it’s critical to keep track of how markets are impacted.

The post Why do 2 of my favourite second income stocks look so cheap right now? appeared first on The Twelfth Magpie.

This could signal a bargain buying opportunity for one of the UK’s most reliable high-yield stocks.

So, is it?

Powered by solid earnings growth

Any company’s share price is driven by a sustained rise in its earnings (‘profits’) over time. A risk to Admiral is any further surge in the cost of living that could prompt customers to cancel policies.  

However, analysts’ consensus forecasts are that its earnings will grow 5% a year to end-2028. This looks extremely conservative to me, based on its recent run of results.

The latest of these — full-year 2025, released on 5 March — saw pre-tax profit surge 16% year on year to £958m. This was supported by a 7% rise in motor insurance profit and by other UK insurance lines and Admiral Money.

This latter division offers unsecured personal loans, car finance, and specialist mortgages. Overall, the operation more than doubled its profit in 2025, as did the firm’s other UK non-motor insurance businesses. 

How much yearly dividend income?

Admiral’s current dividend yield is 5.3%, based on 2025’s 175.9p payout and its current £32.91 price. This far outstrips the FTSE 100’s present 3.1%. However, analysts forecast the dividend yield will rise to around 7% by the end of 2028.  

So, investors considering a £20,000 holding in the firm (the same as mine) could make
£20,193 after 10 years. And after 30 years, this could rise to £142,330.

These figures are based on the average 7% forecast yield, but this can alter over time. They also assume that the dividends are reinvested into the stock to harness the turbocharging effect of ‘dividend compounding’.

After 30 years — the end of the standard investment cycle for long-term investors — the holding’s value could be £162,330.

And this would generate an annual income from dividends of £11,363!

Deeply discounted price

Price is not the same thing as value in stocks. The former is whatever the market will pay at any moment. But the latter reflects the fundamentals of the underlying business.

The difference between the two is crucial for the profits of long-term investors over time. This is because asset prices (including shares) tend to converge to their ‘fair value’ over the long run.

The cornerstone method to establish any stock’s fair value is discounted cash flow analysis. This identifies where any stock should trade by projecting future cash flows and discounting them back to today.

Some analysts’ DCF modelling is more bullish than mine, depending on the variables used. However, based on my own DCF assumptions — including a 7.2% discount rate — Admiral shares are 47% undervalued at their current £32.91 price.

This implies a fair value for the shares of around £62.09 — nearly double where they trade today.

That gap suggests a potentially terrific buying opportunity to consider today if those DCF assumptions prove accurate.

My investment view

Admiral looks a rare mix of dependable income, steady earnings growth, and major undervaluation for the quality on offer.

Consequently, I will add to my holding in the stock very soon and think it well worth the attention of other investors.

The post Down 11%! Time for me to buy more of this FTSE 100 dividend gem at a dirt-cheap price? appeared first on The Twelfth Magpie.

Markets are rattled by the war with Iran and rising oil price. It’s hugely worrying on both a humanitarian and investor level, but a stock market sell-off may also a buying opportunity for the brave. I’m looking at two FTSE 100 stocks that look good value today, while yielding more than 5%. Should investors consider them?

Admiral shares hold steady

General insurer Admiral Group (LSE: ADM) tempts with a modest price-to-earnings ratio of 12.4 and generous trailing yield of 5.5%. It’s also one of only a handful of FTSE 100 stocks to be in positive territory today. I suspect it’s still benefiting from last Thursday’s strong full-year results. The board flagged up an “exceptional” performance from its UK motor division as group pre-tax profit climbed 16% to a record £957.9m. Customer numbers increased 7%, as the business continues to grow despite a competitive insurance market.

The dividend per share rose 7% to 205p and the company further rewarded loyal investors with a special payment of 17.2p. Admiral shares are now forecast to yield 6.15%.

Longer-term share price performance has been bumpy though. The stock is broadly flat over the past 12 months and up only about 4% over five years. There are risks. If oil prices continue rising, pressure on household finances could intensify. Motorists might shop around harder for cheaper insurance or cut back on driving to save fuel. Some households could even sell second cars if living costs climb further.

Yet the market reaction suggests investors still see Admiral as a relatively defensive business with strong pricing power.

NatWest Group’s stock gets cheaper

The big FTSE 100 banks have taken a knock lately, including NatWest Group (LSE: NWG). Its shares are down more than 12% over the past month, pushing the price-to-earnings ratio below 8.5. That looks striking given that only a weeks ago it was starting to look expensive with a P/E of 15.

That number was slashed by a strong set of full-year results on 13 February, with earnings per share jumping 27% to 60.8p. Profits surged 24.4% to £7.71bn in 2025 and the group announced a £750m share buyback covering the first half of 2026.

Banks are vulnerable to a wider economic shock. A surge in living costs could hit both households and businesses, increasing the risk of loan impairments. There’s also concern about stress in private credit markets, although other banks may be more exposed.

Yet in one respect, an oil-driven inflation spike may support profits. If interest rates rise, or cuts are delayed, that could help banks maintain net interest margins, the difference between what they pay savers and charge borrowers.

Both shares are well considering with a long-term view. If the crisis deepens, their prices could fall even further. I can see lots of other bargains surfacing as the FTSE 100 sinks.

The post 2 cheap shares with 5%+ yields to consider buying as markets plunge appeared first on The Twelfth Magpie.