That’s a rational response. The Barratt Redrow share price has had a shocker. It’s crashed 43% in the last year, and 63% over five. Who would go anywhere near a stock like that?

Those are awful numbers, and there could be more pain to come. But this might also be a buying opportunity, for long-term investors who are up for the challenge.

Why is Barratt Redrow doing so badly?

Barratt Redrow isn’t alone. Pretty much every UK housebuilder has taken a beating. The Brexit vote in June 2016 sent their shares into a spiral and they’ve never recovered. Affordability issues, Covid uncertainty, inflation, the cost-of-living crisis, and demise of the government-backed Help to Buy scheme in 2023 all added to their woes.

This year was supposed to be different with the Bank of England expected to keep cutting interest rates. Then came the Iran war, driving up inflation and mortgages.

Housebuilding is seen as a cyclical sector but lately it’s been down all the way. Barratt Redrow now trades at levels last seen in 2013, some 13 years ago. But there’s a chance it may be about to turn.

It seems we may have a lasting ceasefire deal with Iran, and analysts are suddenly talking about an oil price glut rather than a spike. That could take the edge off inflation and bring down mortgage rates. Yesterday, the Bank of England held the base rate at 3.75%, rather than increasing it.

In that rosy scenario, Barratt Redrow shares look good value trading at a price-to-earnings ratio of 10.35. And that could be the perfect time to buy them.

How safe are those dividends?

A £1,000 investment would buy 380 shares at today’s price of 263p. In 2025, the board paid a total dividend of 17.6p. So 380 shares would have delivered a handy £67 last year. Can the income keep rolling?

The trailing dividend yield is a mighty 6.7% but don’t be fooled. That’s expected to retreat to 5.4% in 2026. As profits struggle, Barratt Redrow has been cutting dividends. In 2024, it cut them by a thumping 52%. There was better news in 2025 though, as the total dividend was hiked 8.64%.

We are still waiting for the worst of the inflation shock to wash over us, even after the Iran deal. The Bank of England may yet hike interest rates. And even if mortgage rates do fall, buyers aren’t exactly feeling flush right now. The UK economy is barely growing. Younger people are struggling to buy homes.

I still think Barratt Redrow is worth considering, for the right investor. I’d be tempted myself, but I already have a big stake in rival Taylor Wimpey. It’s performed in exactly the same way, but has a higher forward yield of 7.7%. This is an exciting opportunity, but the road to recovery could be bumpy.

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

Harvey Jones owns shares in Taylor Wimpey.

The post £1,000 buys 380 shares in this 5.4% yielding passive income stock appeared first on The Twelfth Magpie.

The UK economy is precarious, the Iran war has pushed inflation up, and the prospect of getting back to those old low-interest days has vanished out of sight. And that’s given house builders, including Barratt Redrow, a painful kicking.

Short-term pain, long-term gain

But there’s one thing that short-term investors seem to be missing. When it comes to businesses with long-term potential, those serving the UK’s chronic housing shortage are surely among the ones that warrant the furthest horizons.

Can Barratt survive the downturn without too much discomfort? If it can, I reckon it could turn into one of the FTSE 100’s nicest dividend earners. And the company’s third-quarter update made Barratt look like it was thriving, not struggling.

Despite heightened macroeconomic uncertainty, we expect the Middle East conflict to have limited impact on FY26 performance, given our strong forward sales position and advanced build programme. We are therefore on track to deliver total housing completions and adjusted profit before tax in line with consensus expectations.

— CEO David Thomas, Q3 trading update

Highlights from the quarter include…

• On track to deliver between 17,200 and 17,800 total home completions
• Total forward sales of £3,539.2m, up from £3,138.6m
• Year-end net cash guidance raised to between £550m and £650m

Is Barratt Redrow’s financial position and outlook sufficient to see it through the current down spell? I think so.

What’s the valuation like?

In its most recent upgrade, RBC Capital said of the UK’s house builders: “We would call out Barratt and Persimmon as top of the class.” The investment bank put a 350p price target on Barratt, 38% ahead of where it is at the time of writing.

Forecasts put the 2026 price-to-earnings (P/E) ratio at an undemanding 10. And that could fall to eight by 2026, with earnings projected to rise. Perhaps more importantly, analysts expect Barratt’s net cash position to hold strong at least through to 2028.

Will it be long enough for investor sentiment to turn positive again on house builders? That’s a tricky one. With the upgrade, RBC also offered some cautions…

Asset valuations are back to levels last seen in the Great Financial Crisis and without a powerful catalyst we don’t see how to get valuations ‘back to the future’ … until newsflow turns positive there is limited fear of missing out.

— RBC Capital

The bottom line?

Right now, that fear of missing out does seem to be driving investors. I can’t think of any other reason they’d value SpaceX so highly, for one thing.

But the housing market still faces price pressure. And the forecast 5.5% dividend yield comes after a cut — analysts previously had 6.8% pencilled in. So we could see further pressure on FTSE 100 builders.

But I reckon this is a great time to consider getting in while the shares are cheap, and holding for the long term. The only reason I’m not buying is I already have enough Persimmon.

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

Alan Oscroft owns shares in Persimmon.

The post Down 33% with a 5.6% dividend yield, is this FTSE 100 stock a once-in-a-decade buy? appeared first on The Twelfth Magpie.

Why? As AJ Bell analyst Dan Coatsworth says:

the UK stock market is cheap as chips and there are real bargains on offer. Certain companies are in the bargain bin for good reason, but there are also golden nuggets that have flown under the radar.

That comment may have been made way back last July. However, plenty of top-class Footsie shares continue to trade below value.

Take the following growth and dividend stocks:

• Barratt Redrow (LSE:BTRW).
• Polar Capital Technology Trust (LSE:PCT).

Want to know why they’re top bargain shares to consider?

Rock-bottom PEG ratios

Barratt’s forward price-to-earnings (P/E) ratio of 10.6 offers top value in my view. Though it’s the firm’s price-to-earnings growth (PEG) readings that really demand serious attention. These are:

• 0.1 for this fiscal year (to June 2026).
• 1 for next year.
• 0.4 for financial 2027.

Any reading below 1 indicates a stock trading below value. Combined with dividend yields of 5.5%-6.7% for the next three years, Barratt Redrow shares provide excellent all-round value.

So why is the housebuilder trading so cheaply? There’s no doubt risks have grown in 2026 after the Iran war began, raising inflation and likely leading to interest rate hikes. This has the potential to choke off the housing market’s fragile recovery.

Yet it’s my opinion Barratt’s ultra-low valuation more than reflects these risks. Besides, the long-term outlook for housing stocks like this is as robust as ever in my view, as the UK’s growing population drives demand for new homes. I’m confident this will underpin a strong share price rebound.

As the UK’s biggest builder by volume, Barratt is well-placed to seize this market opportunity too. Net cash sits at around £550m-£650m, giving the firm substantial financial firepower to do things like building its land bank. What’s more, its three different brands — Barratt (entry level), David Wilson (mid-market) and Redrow (premium) — help it effectively target different types of buyer.

A 9.4% discount opportunity?

While Barratt shares have dived, Polar Capital Technology Trust’s have rocketed. This reflects a rebound among high-growth US tech shares over recent months.

Yet Polar’s technology trust still offers excellent value. Why? Its shares trade at a 9.4% discount to the net asset value (NAV) per share.

Discounts like this can arise when investors sell a trust’s shares more aggressively than the underlying holdings. This could continue, if concerns over the economic landscape raises worries over holdings like Nvidia, Alphabet and Apple.

For me though, this discount reflects an attractive dip-buying opportunity. Polar Capital Technology Trust has surged 1,149% in value over the last decade, helped by its focus on market leaders with strong balance sheets and long records of innovation. I’m expecting it to keep rising as growth trends such as AI, quantum computing, robotics and cybersecurity gather pace.

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

Royston Wild holds shares in Barratt Redrow.

The post Why are these FTSE 100 growth and dividend stocks so cheap? appeared first on The Twelfth Magpie.

The stock in question is FTSE 100 housebuilder Barratt Redrow (LSE: BTRW). Its shares have crashed 43% over the last 12 months, and a mighty 65% over five. A lot of readers will be thinking the same thing: we’d be stark staring mad to buy such a flop. Loads of UK blue-chips are bouncing along, despite the Iran crisis. Why choose one that’s bombed out?

Would you buy a stock like this?

At The Twelfth Magpie we favour buying shares that have taken a beating. It allows us to bag them at a lower valuation, lock into a higher yield and benefit when the business cycle swings back in their favour.

It’s not a foolproof approach. It’s important to take a close look at the underlying business, because turning around a troubled company takes time.

After the financial crisis, when the Bank of England slashed interest rates almost to zero, house prices raged out of control. Buyer incentive schemes such as Help to Buy threw more fuel onto the affordability fire.

Then in 2022, the cycle turned and inflation and mortgage rates rocketed. That hit sales and prices, while also driving up the cost of labour and materials, squeezing margins from both sides. In 2023, Help to Buy was scrapped. And now the Iran war is driving mortgage rates back up. Stamp duty adds to buyer costs. Despite all of this, Barratt Redrow is still making money, as my list shows:

• 2025 – £488.3m
• 2024 – £385m
• 2023 – £884.3m
• 2022 – £1,054.8m
• 2021 – £919.7m

Sadly, it’s only making half as much money as it was just three years ago. Yet I should point out that the 2025 figure would have been £591.6m, but for the cost of buying up Redrow.

Is this stock good value or a trap?

Here’s another positive. The Barratt Redrow share price looks good value with a price-to-earnings ratio (P/E) of just 10.3. That compares to 16.2 for the FTSE 100 as a whole. Underlying pre-tax profits are expected to rise 16% to £568m in the 2026 financial year. It’s hardly the end of the world.

Investors should still tread carefully. The UK economy and housing market are in a poor state. Deutsche Bank predicts a 5% drop in nominal house prices this year. Also, Barratt Redrow has cut its dividend. The trailing yield may be 6.7% but the forecast for 2026 is just 5.5%. There’s a chance dividends could be cut again.

I’m personally exposed to the fortunes of the housing market through Taylor Wimpey, and that’s proving equally painful. Yet the bad news is out there and at some point we could see a massive recovery. Investors with long-term outlook and high tolerance for risk might still consider drip-feeding money into Barratt Redrow today. They don’t have to be mad. Just brave, contrarian and patient.

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

Harvey Jones owns shares in Taylor Wimpey. 

The post Down 65% but yielding 6.7% – is this beaten-down UK stock now a generational bargain? appeared first on The Twelfth Magpie.

Here’s the reason. I think there’s an exciting opportunity to buy Barratt Redrow at a bargain price, and grab a bumper dividend yield too. But it’s not for everybody.

What went wrong with this FTSE 100 stock?

Years of near-zero interest rates drove house prices to unaffordable highs, leading to big affordability issues when the cost-of-living crisis finally drove up mortgage rates. The end of the Help to Buy scheme in 2023 further dampened demand.

Surging inflation also pushed up the cost of building materials, while the government hiked both employer’s National Insurance bills and the minimum wage. Post-Grenfell cladding compensation brought still more costs. When 2026 began, there were hopes things would ease, but then the Iran war kicked off and inflation fears returned all over again.

We could put this down to bad luck, but it is not just that. Housebuilders are often at the sharp end of wider economic volatility. They produce relatively small numbers of high-value products and are highly sensitive to shifts in sentiment, interest rates, and policy.

Looking at the last five years of Barratt Redrow’s underlying pre-tax profits shows just how bumpy things have been:

2025 – £488.3m
2024 – £385m
2023 – £884.3m
2022 – £1,054.8m
2021 – £919.7m

I should note that the 2025 figure includes the acquisition of Redrow in August 2024. Otherwise, it would have been £591.6m.

Barratt Redrow shares have taken a beating, but the underlying balance sheet and business are relatively solid. Its Q3 update (April 15), showed a 13% increase in its order book to £3.5bn, with full-year completions expected to come in between 17,200 and 17,800. Underlying pre-tax profits are expected to rise 16% to £568m.

Can the housing market recover?

The big problem is that nobody really knows what happens next, either in the Middle East or in the UK economy and housing market. What is clear is that the stock is pricing in a good deal of risk, with a modest price-to-earnings ratio of 9.9. Thanks to its share price decline, the trailing dividend is a chunky 6.75%.

However, the forecast yield for 2026 is lower at 5.69%, reflecting February’s cut to the interim dividend. But investors willing to look beyond the group’s current troubles may see a profitable, high-yielding business that could re-rate strongly if conditions improve.

Analysts are optmistic. The 12-month consensus share price forecast is 370p. If correct, that would represent an eye-popping increase of 42% from today’s 261p. With the dividend, the total return would head towards 48%. No promises, of course. But there is potential here – Barratt Redrow just needs the right conditions to unlock it. It’s well worth considering, for investors who are willing to be patient. I’ll be keeping a close eye on both the stock and the wider housebuilding sector, and suggest you do the same.

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

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

The post Here’s the frankly jaw-dropping 12-month Barratt Redrow share price and dividend forecast… appeared first on The Twelfth Magpie.

What’s behind this generous payout? A big reason is the stock’s lacklustre performance over the last 12 months, which has wiped out close to 48% of the group’s market-cap. It’s a painful loss for sure, but has the market overreacted and created a buying opportunity for long-term investors?

Let’s find out.

Why have the shares fallen?

The downfall of Barratt Redrow shares starts with the UK housing market. Rising mortgage rates, persistently stretched affordability problems, and weak consumer confidence have all slowed demand for new homes. And that has left housebuilders in a difficult spot.

For Barratt Redrow, the situation has only been made more complicated by its late 2024 merger with Redrow. The combination was strategically sensible. But integrations of this scale come with enormous execution risks. And while the company has delivered some early synergistic gains, the bulk of expected benefits have yet to materialise.

It seems that investors have understandably started to grow impatient. Throw in the risk of higher inflation and potential interest rate cut reversals, and the entire UK homebuilding sector looks exposed. So it isn’t too surprising to see sentiment sour.

But with the stock already being aggressively sold off, is today’s high yield and discounted price-to-earnings ratio a good reason to reconsider?

Exploring both the bull and bear cases

The main argument for buying Barratt Redrow shares today stems from its dirt cheap valuation and a chronic shortage of housing in the UK.

The homebuilder’s one of the biggest names in the sector. And the group has historically bounced back rapidly from cyclical downturns. As such, if mortgage rates recover faster than expected, the subsequent earnings surge could trigger a sudden recovery rally.

In other words, investors could be looking for both a high-yield income and a growth stock combined into one.

However, when this eventual cyclical shift will happen is where the mystery lies. Stubborn inflation translates into higher-for-longer interest rates – a significant headwind that could prevent the wider housing market from returning to growth. And with dividends already being pulled back slightly, today’s high yield may end up on the chopping block.

What’s the verdict?

For investors willing to stomach the volatility, Barratt Redrow could be an interesting recovery opportunity to explore. However, its high yield is a perfect reflection of the risk attached to this business right now.

So while the payout’s eye-catching, I think there are better alternative passive income opportunities for investors to explore right now.

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

Zaven Boyrazian does not hold any positions in the companies mentioned.

The post This 7% dividend yield FTSE 100 stock’s at a 52-week low! Time to consider buying? appeared first on The Twelfth Magpie.

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.

Investing in a spread of FTSE 100 shares is a great way of generating that second income stream. UK blue-chip companies offer some of the most generous dividends in the world, with some yielding as much as 5%, 6% or 7% a year. All share price growth is on top of that.

How much do I need to invest?

Today, the median annual salary for full-time UK workers is £39,039. Matching that from an ISA takes a lot of doing, but it’s possible over time. How much you need in your pot depends on its yield, as this list shows:

• 4% – £975,975
• 5% – £780,780
• 6% – £650,650

Those are dauntingly large sums of money. Then again, we’re looking to generate a pretty hefty level of income. With time, it can be done. Let’s take the middle figure of £780,780. Let’s also assume our investor has 30 years to invest, and their portfolio grows at 9.5% a year. That’s the average return from a Stocks and Shares ISA over the last decade, with all dividends reinvested.

It’s enough to turn a £400 monthly investment into £786,756. Our investor will need to resist the temptation to dip into their ISA pot, but it shows what can be done if you start early and stick with it.

Stock markets have been volatile lately, but I can see some really attractive dividend income stocks out there. Many have spare price growth potential too.

Should I grab that bumper 7% yield?

Barratt Redrow (LSE: BTRW) has an astonishing trailing yield of 7.27%, although investors should approach it with caution right now.

UK housebuilders have struggled lately. Stretched affordability, the cost-of-living crisis, patchy wage growth and the end of the Help to Buy scheme in 2023 have all hit demand. At the same time, the rising cost of labour and materials and the fire safety cladding scandal have driven up costs.

The housing market outlook was bright at the start of the year, as markets anticipated lower interest and mortgage rates. Sadly, the Iran war wrecked that.

The Barratt Redrow share price is down almost 50% in the last 12 months. Paradoxically, I think this could be a tempting time to buy it. The shares are cheap as a result, with a price-to-earnings ratio of just 9.6.

With a long-term view, its shares look good value. But the short term is likely to remain bumpy as the UK struggles and house prices slip. Also, the board recently cut the interim dividend by 9.1% to 5p per share. The forecast yield for 2026 is 6%, lower than today.

The key question is whether Barratt Redrow can keep selling houses and funding its dividend as the UK economy slows. I think it’s worth considering for investors who are up for that challenge. However, you might find other FTSE 100 dividend stocks that appeal more right now.

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

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

The post How much do you need in an ISA to earn passive income equal to the average UK wage? appeared first on The Twelfth Magpie.

Meanwhile, the UK National Living Wage for those aged 21 or over has risen to £12.71 per hour. That equates to approximately £24,785 per year, depending on hours worked.

I think that could make a nice goal for investors aiming for retirement income from their Stocks and Shares ISA. Retiring on minimum wage isn’t exactly going to produce a life of luxury. But added to the State Pension, plus other things like work pensions, it could mean a significant bump in living standards.

No tax to pay

ISA holders have a distinct advantage — because ISA earnings are tax free, and the National Living Wage figure is before tax. To match actual take-home pay, an ISA investor would need to earn around £21,000 per year. Let’s dig in an see how that might be possible.

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’s your retirement target?

Hitting that £21,000 annual goal depends on, for one thing, the annual return an investor can achieve. The following table shows how much would be needed, based on three different income rates. That’s the 4% often recommended in order to try to preserve capital, the 6.9% returned on average by the FTSE 100 per year over the past 20 years, and a more ambitious 10%.

I include how long it could take to reach the needed totals, assuming each year’s contributions compound at the same target rate. So that’s how many years it would take at 4% per year to then generate £21,000 annually at the same 4% — and so on.

Pick a stock

One way to build up passive income is to target stocks that pay dividends, and reinvest the cash to compound up. Barratt Redrow (LSE: BTRW) catches my eye at the moment, for a few reasons.

One is that it has a forecast dividend yield of 7%, almost bang on that 6.9% FTSE 100 average return. Now, the yield is so high because the share price has fallen 68% in the past five years — house building really has been in the dumps.

Companies don’t guarantee dividends, and can cut them in tough times. And this has clearly been a risky business. But I think investors should look to the future — which I expect to be bright for the sector. I just can’t see the UK’s chronic housing shortage ending any time soon.

Balanced approach

The key, as we can see in the table, is to invest as much as we can each month for as long as we can. And I think investors could do well to consider Barratt Redrow as a part of the plan.

Alan Oscroft does not hold any positions in the companies mentioned.

The post How much do you need in a Stocks and Shares ISA to beat the UK minimum wage? appeared first on The Twelfth Magpie.

Here are two that institutional analysts believe are significantly undervalued right now, and could deliver outstanding returns over the next 10 years.

1. Victrex: a battered materials specialist

Victrex (LSE:VCT) is one of the world’s leading manufacturers of high-performance PEEK polymers. These are specialised ultra-durable, lightweight materials used in the aerospace, automotive, medical device, and semiconductor industries.

The stock’s fallen nearly 40% from its 52-week high, yet the underlying business continues to generate significant cash. As such, dividends have continued to flow, pushing the yield to a remarkable 10.1% – one of the highest in the FTSE 250.

Analysts at Berenberg and Citi are both issuing price targets of 695p and 700p respectively, suggesting that a chunky 25% discount may exist.

As Victrex’s H1 2026 results noted, revenue’s growing despite near-term margin pressure caused, in part, by inventory destocking headwinds. That’s a signal the core business and underlying demand remain intact and the company’s merely suffering from a temporary cyclical downturn.

This perfectly demonstrates the cyclical nature of Victrex’s business. And while the market will eventually recover, there’s a big question mark over the timeline of this recovery.

A prolonged slowdown in automotive and aerospace production weighs heavily on demand for PEEK polymers. And it’s why analyst opinions are split, with five recommending to Buy, six recommending to Hold, and two putting Victrex in the Sell category – a reflection of the genuine uncertainty about the pace of recovery.

2. Barratt Redrow: a deep-value housing play

Barratt Redrow (LSE:BTRW) was formed from the merger of two of the UK’s largest housebuilders, creating a business with enormous scale and a powerful position in the structurally undersupplied UK housing market.

Of the 19 analysts following the business, 15 rate the stock a Buy, with an average 12-month price target of 414p against a current share price of around 257p. That’s a 61% potential capital gain for value investors today.

And with the UK government still committed to building 1.5 million homes, the structural tailwind for housebuilders looks powerful over the next decade.

The bear case however, is real. The post-merger integration of Barratt and Redrow is still ongoing, and execution risk remains elevated. Higher mortgage rates continue to weigh on buyer affordability, and the company faces a significant fire safety remediation bill that could pressure free cash flow for years to come.

For patient investors with a 10-year horizon, these risks may prove temporary. But they shouldn’t be taken lightly.

The bottom line

Both of these value stocks are trading at meaningful discounts to analyst price targets. Of course, neither stock is a guaranteed winner. The cyclical and operational risks are very real and could leave investors bitterly disappointed.

But providing both companies continue successfully navigate their near-term challenges, I think both Victrex and Barratt Redrow are worth a deeper dive today.

After all, the best opportunities rarely come gift-wrapped, and that’s exactly what could make these two so interesting right now.

The post Expert picks: 2 top value stocks to buy and hold until 2036? appeared first on The Twelfth Magpie.

The answer depends on the yield. Right now, a popular choice for long-term ISA investors is to build a diversified spread of FTSE 100 shares offering both dividend income and growth. UK blue-chips offer some of the most generous dividends in the world. The average yield across the index is currently around 3.3%.

How much income could I hope to get?

Let’s say somebody had £299,000 in their portfolio. If they put their money in a FTSE 100 tracker, they’d get £9,867 a year. Or £822 a month. And that’s without touching their capital. That’s fine, but it’s possible to get a yield of 5%, 6% or even 7%, by investing in the more generous dividend stocks on the index. Let’s see what you can get then:

• 5% yield – £14,950 a year
• 6% yield – £17,940 a year
• 7% yield – £20,999 a year

A yield of 7% would be pretty tricky to maintain. But it is possible. Legal & General Group is the most generous income stock on the FTSE 100 with a bumper 8.7% yield. Standard Life is in second place yielding 7.3%, while real estate investment trust Land Securities Group yields around 6.9%.

One stock I’d consider for a high income portfolio today is Barratt Redrow (LSE: BTRW). It’s now the UK’s biggest housebuilder but like the rest of the sector, it’s taken a beating lately. The Barratt Redrow share price is down 43% over the past year and 66% over five. What’s going on?

House builders were slammed by the cost-of-living crisis, which drove up mortgage rates and worsened affordability issues. They were also hit by the end of the Help to Buy scheme in 2023, and the cladding fire safety scandal that followed the Grenfell tragedy. This year looked more promising with inflation and mortgage rates expected to fall. Instead, they’re rising due to Iran.

Can this FTSE 100 stock bounce back?

As a result of all this, the shares look cheap. Today, the forward price-to-earnings ratio sits around 10.2. That’s pretty low. The trailing dividend yield is a bumper 6.5%.

A word of warning. The forecast yield is 5.5%. On 11 February, Barratt Redrow cut its interim dividend by 9% to 5p per share. That followed a 13.6% decline in adjusted pre-tax profit to £199.9m. The forecast yield is 6.1% in 2027, but we’ll see. Dividends are never guaranteed. Yet I still think it’s worth considering for brave investors willing to take the long-term view. So what’s swung my decision?

Barratt Redrow boasts a strong balance sheet with net cash of around £550m to £650m. At some point the investment cycle will swing and when it does, its shares could recover at speed. No guarantees though. Things could get worse before they get better. But I think this stock could form part of an ISA portfolio, for those keen to build a generous second income, and with luck, grab some share price growth as well.

The post £299,000 in a Stocks and Shares ISA? See how much income that could give you appeared first on The Twelfth Magpie.