While Arthur Fery burst onto the Centre Court scene, the stock market quietly kept doing what it has done for four decades: compounding money for people patient enough to leave it alone.

What £100 a month can become

Since its 1984 inception, the FTSE 100 has delivered an average annualised total return of around 6.9%, with dividends reinvested. Add £100 a month at that rate and the results look like this:

There’s a pattern that’s worth noting here: the third decade adds more than the first two combined. That’s where the returns really start to take over. Of the £119,617 portfolio, just £36,000 is actual contributions. The rest is what comes back in dividends and increasing value.

Past performance isn’t a guarantee of future returns – if it were, investing would be a lot easier than it actually is. But the compound interest formula’s set in stone.

Why now looks interesting

UK shares remain unusually cheap by international standards. Even after the FTSE 100’s run past 10,000, the index trades at a forward price-to-earnings (P/E) ratio of about 13.4.

That compares with around 20 for the S&P 500. The US market’s multiple prices in years of uninterrupted earnings growth, the UK’s doesn’t. 

The two indices aren’t the same – the US has a heavier tech focus than the UK. Ultimately however, money is money, regardless of which business it comes from.  That’s why most of my Stocks and Shares ISA consists of UK-listed names. I think it’s a great place to look for potential opportunities. 

A stock worth considering

Croda International‘s (LSE:CRDA) a name I own that demonstrates what value looks like. And it has a terrific record when it comes to dividends.

The speciality chemicals firm has a strong record of dividend growth and the current yield is close to 3.7%. That’s very high compared to the 1.5% average over the last 10 years.

Source: Fiscal.ai

Long-term protection comes from Croda’s products being specified into customer formulations. That means switching involves re-testing and re-approving, so customers rarely leave to save pennies.

The lipids (organic, water-insoluble macromolecules) business remains the wildcard. Demand has been picking up, but the US regulatory environment remains a tricky one and a source of risk for the business in the near future.

Overall however, the latest results are encouraging. Strong growth across a number of divisions – including ceramides (essential fats) and fragrances – show real signs of recovery from cyclical lows.

Buy while it’s cheap?

Croda’s dividend yield isn’t just a passive income signal. It’s also a sign the stock’s unusually cheap – which is why I’m continuing to add to my own investment in the company.

Down 70% from its 2021 highs, that certainly seems to be the case. And that’s why I think it’s worth considering for investors looking to earn a second income by investing £100 a month.

What income stock do we like better than Croda International Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

Stephen Wright owns shares in Croda International.

The post How £100 a month could build an £8,254 second income appeared first on The Twelfth Magpie.

And right now, two FTSE 100 names stand out for exactly that reason.

Value pick #1: Croda International

Croda International’s (LSE:CRDA) a speciality chemicals company that supplies high-performance ingredients to the consumer care, life sciences, and crop protection industries globally.

It’s been a bruising few years for shareholders. Earnings collapsed from £653.3m in 2022 to just £64.7m in 2025 as post-Covid inventory correction crushed volumes across its end markets. And the share price has followed, falling sharply from its peak.

But institutional analysts are increasingly convinced the worst is over.

Goldman Sachs and Jefferies both carry Buy ratings, both with targets of 3,500p. And the average 12-month target across all analysts sits at around 3,478p, implying roughly a 16% upside from today’s price of around 3,005p.

So is it still a good investment?

The recovery thesis rests on restocking. With global customer inventories now normalised after two years of destocking, demand across Croda’s end markets is expected to gradually recover through 2026 and into 2027.

The risk however, is timing. Goldman Sachs notes that consensus organic growth forecasts of 4.5% for 2026 look challenging relative to Croda’s historical average of 1.8%. And therefore, a slower-than-expected recovery could keep sentiment depressed for longer.

Value pick #2: Aviva

Aviva’s (LSE:AV.) one of the UK’s largest insurance and wealth management groups, providing life insurance, general insurance, and retirement savings products to millions of customers across the UK, Ireland, and Canada.

Unlike Croda, Aviva’s recovery is already well underway. In 2025, operating profit rose 25% to £2.2bn, hitting its 2026 target a full year early. The dividend was raised 10% to 39.3p per share, and management launched a new £350m stock buyback.

So it’s no surprise that the analysts at Berenberg recently issued a Buy recommendation with an 800p share price target – roughly 24% higher than where the stock trades today.

The investment thesis is straightforward. With an ageing population, structural demand for Aviva’s products and services is on the rise. And with the business already generating impressive volumes of cash, its 6.1% dividend yield today is already rewarding shareholders.

However, the primary risk worth watching is integration.

Aviva’s acquisition of Direct Line has expanded its footprint dramatically, but the Solvency II cover ratio fell to 177% following the deal. Some pullback in capital buffers is to be expected.

But if it continues to shrink moving forward, that could be an early warning sign that the large takeover isn’t living up to expectations.

To buy, or not to buy?

Both Croda and Aviva are viewed as undervalued stocks to buy by institutional analysts in a market that appears to have advanced without them. Yet with the evidence of recovery building at both businesses, it may not be long before the broader market catches up.

Personally, I think Aviva’s in a stronger position out of the two. But both are worth investigating further. And they’re not the only value stock opportunity that’s on my radar right now…

What income stock do we like better than Aviva Plc right now?

One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.

And the best bit is that you can see if for yourself, right now, absolutely free of charge!

No jargon. No hard sell. Just a clear look at an income share we think is worth your time.

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

The post I’m looking for the FTSE 100’s best value stocks to buy in July. Have I found them? appeared first on The Twelfth Magpie.

Croda International: watch for the recovery

Croda International (LSE: CRDA) has endured a rough few years. The pandemic-era lipid boom unwound sharply, leaving the stock nursing a painful hangover. 

The numbers, however, are genuinely turning. Sales and profits have been recovering over the last nine months and there are encouraging signs ahead.

Management has guided for organic sales growth of 3%-6% in 2026, with further margin expansion. And the next update is due at the end of July. 

The key risk is that Life Sciences – especially Crop Protection – remains susceptible to inventory channel cycles. And that’s hard to avoid. 

Long-term investors, however, can look to ride the waves a bit with this one. The company’s key competitive strengths are still firmly intact.

Source: Fiscal.ai

The stock isn’t far from its 52-week highs, but it’s near a 10-year low in terms of valuation multiples. So I think it’s definitely worth a look at today’s prices.

Renew Holdings: UK infrastructure

Andy Burnham is widely expected to become Britain’s next Prime Minister. And the Makerfield MP is focused on infrastructure. 

I think that could be a huge boost for Renew Holdings (LSE:RNWH). The stock market, however, doesn’t seem to be hugely positive.

Renew is Network Rail’s largest infrastructure services supplier (think HS2 expansion). And it’s also heavily involved in the water business (another key priority).

The point isn’t just that spending is set to increase. It’s that infrastructure investments should bring long-term maintenance contracts, which is where Renew specialises.

Operating margins are only around 5.3%, so delays to projects can have a disproportionate effect on profits. Unironically, investors have seen plenty of those recently.

Source: TradingView

The stock, however, is trading at a significant discount to analyst price targets. And I agree that it’s worth checking out in July.

MercadoLibre: Latin American fortress

MercadoLibre (NASDAQ: MELI) isn’t a traditional retailer. It’s the leading e-commerce marketplace, the largest digital payments network, and a growing logistics operator across Latin America.

Foreign exchange rates are often a risk. But anyone who thinks it’s the same for all businesses hasn’t been paying attention to Argentina in the last few years.

Behind a fluctuating currency, the company has been making huge progress. The stock market, however, seems to be ignoring this.

MercadoLibre shares are down 37% over the last year and the big reason for this is margin compression. But I think that’s a feature, not a bug.

The firm’s infrastructure investments make it extremely hard to compete with. And shipping costs in Brazil fell 17% compared to the previous year.

In other words, the network is getting cheaper to run as it continues to clock 49% net revenue growth. That’s a powerful combination that I think deserves attention.

What I’m doing

It’s always possible that something dramatic happens in the stock market. And that could force other names onto my buying radar in July. 

As it stands, however, Croda International, Renew Holdings and MercadoLibre are all on my buy list. And I’m optimistic about all three over the long term.

Should you invest £5,000 in Croda International 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 Croda International Plc made the list?

Stephen Wright owns shares in Croda International.

The post 3 stocks I’m looking to buy in July appeared first on The Twelfth Magpie.

With that in mind, here are two that currently sit near the top of institutional Buy lists.

A recovery hiding in plain sight?

First up is Croda International (LSE:CRDA) – a speciality chemicals group supplying high-performance ingredients to the cosmetics, pharmaceuticals and agriculture sectors worldwide.

The shares have fallen more than 70% since 2022, largely because the post-pandemic collapse in Covid vaccine demand wiped out a significant chunk of revenue overnight.

Needless to say, it’s been a painful reset for shareholders. But for prospective investors, the consensus among the analyst teams at Barclays, UBS, JP Morgan, and Berenberg is that the market has drastically oversold.

Underlying operating margins are forecast to expand from 17.4% in 2025 to 18.4% this year, and further still to 19.5% in 2027 on the back of a £100m cost savings programme. Free cash flow also surged in the second half of 2025, while the crop protection segment delivered 14% revenue growth last year.

In other words, we might already be in the early innings of a multi-year recovery. However, that doesn’t mean a recovery’s a certainty.

Croda’s Consumer Care segment faces intensifying competition from lower-cost manufacturers in China and India, which is undercutting margins and slowing progress. And with a complex global supply chain, any further trade disruption from US tariffs could squeeze earnings faster than management’s current guidance assumes.

Those are risks investors will have to consider carefully.

Income and growth in one package

Aviva‘s (LSE:AV.) another top pick right now. And the business is one of the UK’s largest insurers and wealth managers, covering life insurance, general insurance and retirement savings for millions of customers across the UK, Ireland and Canada.

Once again, multiple institutional analysts have issued Buy ratings with price targets ranging from 670p to 760p. At today’s price of around 630p, the median target implies upside of roughly 13.5%. Add in the chunky 6.3% dividend yield, and total returns could approach 20% over the next 12 months.

So what’s driving this optimism? The answer’s structural demand.

With an ageing population, the UK retirement savings market is growing rapidly, and Aviva’s one of the few large-scale insurers positioned to capture a meaningful share of that expansion. The integration of its Direct Line acquisition has already delivered flat premium growth. Subsequently, net insurance margins are on the rise.

But like all investments, there are some key risks to watch out for, most notably execution. Integrating a major acquisition while simultaneously scaling the wealth management operation is a complex balancing act. Any slip in claims ratios, integration costs, or retirement outflows could weigh on the share price quickly.

So what’s the verdict?

Both Croda and Aviva are value stocks that the experts believe are being underpriced in a market that has seemingly been moving ahead without them. But with both businesses posting increasingly encouraging results, it may not be long before the rest of the market wakes up and recognises their progress.

That’s why I think both businesses deserve a closer look today.

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

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

The post 2 FTSE 100 value stocks experts think could soar in 2026! appeared first on The Twelfth Magpie.

Now, with efforts under way to simplify the business, refocus innovation on core markets, and rein in costs, is this now a forgotten FTSE 100 growth stock quietly setting itself up a comeback?

Turnaround play

Croda’s plan is essentially about getting the business back to basics after a difficult few years.

First, the group is refocusing on its core growth markets: Beauty, Pharma and Agriculture. These are the areas where it has stronger pricing power and more consistent demand.

Second, management is tackling what looks like a self-inflicted margin problem. Costs were allowed to rise faster than sales. A wave of acquisitions also failed to deliver the returns expected, resulting in weaker profitability.

Finally, the response is a push towards simpler, more disciplined execution. This includes a sharper innovation focus, closer alignment with customer needs, and greater use of digital tools and AI. The aim is to improve efficiency across manufacturing and supply chains.

Taken together, this isn’t a story about a broken business. It’s one that lost operating discipline. The key question for investors is whether these changes will actually deliver meaningful results

Growth engine showing early signs

The clearest evidence of Croda’s recovery plan sits in its Beauty business. This is the group’s largest and most important growth engine, and it’s been through a period of weaker demand as customers adjusted post-pandemic.

What stands out is the shift towards faster commercialisation of new ingredients, alongside efforts to extract more value from existing products. That matters because Croda’s model relies on being embedded in customers’ formulations, where switching costs are high and pricing power is stronger.

There are also signs of more targeted execution. The company is putting more effort into co-creation with customers and tailoring solutions for specific segments and regions. In particular it’s focusing on faster-growing markets outside Europe. This is helping rebuild momentum in areas that had previously slowed.

If this continues, Beauty could move from being a drag on performance to a stabilising — and potentially re-accelerating — growth driver for the group.

What could go wrong?

There are still clear risks to the recovery story. The biggest is execution. Croda has set out a wide-ranging reset across innovation, costs and operations, but delivering consistent improvement after several years of disappointment will take time. Any slowdown in demand from key end markets such as Beauty could also quickly expose ongoing margin pressure.

There’s also a risk that the investment cycle hasn’t yet fully worked through the business. Previous acquisitions and expansion efforts have left a higher cost base, and it’s not yet clear how quickly returns can be lifted back to historical levels.

That said, Croda isn’t standing still. The focus on simplification and more disciplined growth is a step in the right direction. After a sharp share price fall and a long period of underperformance, the stock now looks like a recovery story worth a closer look for long-term investors.

Should you invest £5,000 in Croda International 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 Croda International Plc made the list?

Andrew Mackie does not hold any positions in the companies mentioned.

The post Has this FTSE 100 growth stock become too cheap to ignore? appeared first on The Twelfth Magpie.

The pension problem

According to Pensions UK, a single person needs £32,700 a year to live a moderate retirement. For a couple, the figure is £45,400.

This goes up with inflation. But the organisation estimates that 77% of people are set to fall short of this. That’s huge. And the numbers are, obviously, worse in terms of being able to manage a ‘comfortable’ retirement.

This requires £45,400 for a single person and £62,700 for a couple. According to Pensions UK, only 9% of people are set to hit this.

Dividend stocks are one way to try and earn extra income. But how much do you need to invest to bridge the gap?

How much do you need to invest?

How much you need to invest to get to £32,700 a year depends on what you already have. But there are some ways to try and work it out

The average dividend yield from the FTSE 100 is around 3.04%. So a £20,000 investment returns £608 a year. That might sound like a lot. But when things go well dividends can increase over time.

This means income generated today has the potential to stay ahead of inflation. And that’s a huge advantage.

The downside is that dividends are never guaranteed. But there are some stocks with spectacular track records.

What to buy?

Long-term investors have to think about inflation. And one I stock I like in this context is Croda International (LSE:CRDA). 

The conflict in Iran is having inflationary effects on a number of industries. But Croda said the following in its Q1 update:

“Sales in the Middle East accounted for ~5% of Group sales in 2025, most of which were in F&F. We are actively and responsibly managing the impact of the conflict, increasing prices to fully recover input cost inflation.”

This ability to offset input costs through price increases is hugely important. It’s why Croda has 34 years of consecutive dividend increases.

A 3.7% dividend yield with some protection from inflation looks pretty attractive. So what is this business and how does it work?

Inflation-busting

Croda’s a speciality chemicals company, making products that are used in things like drug development, crop protection, and beauty products.

The reason the firm’s able to keep increasing prices is that its products are well-protected. Part of this comes from more than 1,700 patents.

That, however, only goes so far. There’s always a risk someone comes with a better product – and then who wants to copy them anyway?

The real advantage comes from products that are specified by regulation. These can’t legally be substituted without getting the whole product re-approved. That means Croda’s customers can’t easily move to alternative products. And that’s why the firm can pass on higher costs through price increases.

Retirement income

I’ve been buying shares in Croda International recently with a view to holding them well into my retirement. That’s decades away, by the way.

No doubt there will be ups and downs. But the company has an admirable dividend record and I’m optimistic about the long term.

Should you invest £5,000 in Croda International 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 Croda International Plc made the list?

Stephen Wright owns shares in Croda International.

The post How much do you need to invest in dividend stocks to be able to retire? appeared first on The Twelfth Magpie.

Croda International (LSE:CRDA) is a prime example of such an enterprise, with management raising shareholder payouts for 35 years in a row. And at its current share price of 2,778p paired with a 4% yield, buying 1,892 shares right now would instantly unlock a passive income of £2,100 a year, or £175 a month.

Of course, executing this transaction would cost a hefty £52,559.76. And while a more modest investor can steadily build up this position over time rather than buying all at once, there are other higher-yield opportunities out there.

However, it’s not the yield that makes Croda interesting. It’s the group’s habit of continuously raising dividends each year. And that means the £175 monthly passive income could quietly become significantly larger over the long run.

So, is this a no-brainer?

A promising opportunity

As a quick crash course, Croda is a speciality chemicals group supplying high-value ingredients to the consumer care, life sciences, and crop protection industries.

These aren’t commodity chemicals. They’re precisely engineered formulations embedded deep in customer products, which has translated into higher switching costs and durable pricing power.

That said, the past few years have been genuinely tough.

A prolonged destocking cycle across the personal care and agrochemical industries hammered order volumes throughout 2023 and 2024, sending Croda’s share price to multi-year lows and testing the patience of even its most loyal shareholders.

But the tide appears to be turning. Order patterns are now normalising across key end markets, and management’s focus on margin recovery is beginning to bear fruit.

That’s a meaningful shift from where the business stood just 12 months ago. And looking further ahead, institutional analysts point to Croda’s life sciences division as the most exciting long-term growth driver.

Demand for lipid delivery systems used in mRNA vaccines and gene therapies is structural and accelerating. With the global biologics market expected to grow substantially over the next decade, Croda is quietly positioned at the heart of what could be one of healthcare’s most important long-term tailwinds.

So, is now the time to consider adding this stock to my portfolio?

What’s the catch?

The recovery story is genuinely compelling. But it would be wrong to pretend the risks aren’t real.

Croda’s turnaround remains in its early stages. And if destocking pressures were to return across the personal care or agrochemical supply chains, the earnings rebound investors are hoping for could be pushed further out than expected.

That’s a significant risk given the fragile global macroeconomic backdrop, especially in Asia, where demand remains persistently soft.

So, where does that leave investors today?

Personally, I think the combination of a 35-year dividend growth track record, a near-4% yield locked in while the share price remains under pressure, and a genuinely exciting long-term growth opportunity in life sciences, makes Croda one of the more interesting dividend stocks available in the UK market right now.

The risks are real. But for patient, long-term income investors, it might be worth considering.

Should you invest £5,000 in Croda International 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 Croda International Plc made the list?

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

The post 1,892 shares of this UK dividend stock earn me £175+ in monthly passive income. Should I buy? appeared first on The Twelfth Magpie.

The early signs suggest that this isn’t on anything like the same scale. But it might be significant for one FTSE 100 stock in particular.

Not another pandemic?

So far, there have been reports of up to 11 cases of hantavirus reported on a cruise ship in Argentina. And a lot of familiar phrases are coming back again.

Talk of flu-like symptoms, isolating at home, and physical distancing are back in the news. But we’re a long way from a full-blown pandemic – so far.

Nonetheless, there are some familiar goings on in the stock market. Moderna – the mRNA vaccine firm – has seen its stock jump 13.95% in the last week. 

This isn’t just muscle memory. There’s an international effort under way to work on a vaccine and that might be a genuine boost for the company.

Even if the stock market doesn’t crash – and I’m not convinced it will – it’s worth noting. And it might also be significant for a FTSE 100 stock.

Vaccine demand

Shares in Croda International (LSE:CRDA) surged during Covid-19. Sales of the firm’s lipids (used in vaccines) went through the roof and the stock followed.

Since the end of the pandemic, customers focused on using existing inventories. That meant they stopped buying and the company’s sales crashed.

On top of this, the firm didn’t use its Covid-19 windfall particularly well. It made some bold acquisitions at what turned out to be high prices.

Management seemed to be taking the view that mRNA vaccines were the future. But over the last few years, this has looked like a big mistake.

The hantavirus outbreak, however, might be a big boost. And with inventory levels starting to stabilise, could the stock be set to surge again?

Time to buy?

Increased vaccine studies might give Croda a short-term boost. But that – by itself – isn’t a good reason for a long-term investor to think about buying.

Investors have seen once what can happen when a temporary surge in demand wears off. And it would be a huge mistake to forget the last few years.

Renewed interest in mRNA vaccines, however, might be a durable trend. In that situation, windfalls could become much more frequent.

That would meaningfully change the equation for investors. And if this is the case, Croda shares could be really interesting right now. 

The business is already showing signs of recovery. Add the potential for increased vaccine studies over the long term and I think this is worth a look.

Diversification

I’m not a global health expert (though some of my colleagues are). But from what I can see, hantavirus doesn’t look like the next Covid-19.

It’s too early to start seeing the outbreak as a catalyst for a stock market crash. It is, however, worth thinking about what it might mean. 

A lot of the stocks I own could be affected in a big way by another pandemic. But this isn’t a risk I spend a lot of time thinking about.

Maybe I should. And while there’s a lot more to the business, Croda could be a really good way to add some diversification to my portfolio.

The post Hantavirus: why I’m not looking at the next stock market crash… yet appeared first on The Twelfth Magpie.

It’s now trading at a 72% discount to its 2021 highs. Yet the company keeps finding ways to return more cash to shareholders each year.

Speciality chemicals

Croda’s a chemicals company. Its products help crops grow and make beauty products and drugs do what they’re supposed to.

Importantly, barriers to entry are very high. The firm’s products are protected by regulations that make competing extremely difficult. In some cases, that takes the form of patents. Not all investors value these, but they do make it illegal for competitors to copy its products.

In others, they’re specified as part of the approval process. And that means customers aren’t allowed to change to an alternative product. That gives Croda a lot of pricing power. But despite all of this, the share price has been a disaster over the last five years or so.

Boom and bust

During the pandemic, demand for Croda’s products surged and both the stock and the underlying business did extremely well. Since then however, things have gone the other way. Part of this is customers working through excess inventories, but that’s not the only issue.

The firm also made some ill-judged strategic moves. It used its Covid-19 windfall to invest in its lipids division, but that’s been a mistake. As a result, the stock’s gone from an almighty boom to a huge bust. It’s fallen not only to its pre-pandemic levels, but well below this.

Despite all of this, the firm’s managed to keep increasing its dividend every year. Given the circumstances, that’s a remarkable achievement.

Dividends

Croda’s lifted its dividend for over 30 consecutive years. That covers recessions, wars, and several changes of leadership. The inherently cyclical nature of the business makes it even more impressive. But there are risks to consider. 

The latest increase was minimal to say the least. And the dividend was barely covered by the company’s free cash flows. That means investors need things to pick up for the business in the near future. But there are signs this is happening. 

Croda’s latest update reported signs of normalising inventory levels and that should mean demand’s set to improve after a long time.

Investing lessons

The best investors never stop learning. And Croda International has been a great source for lessons over the last few years. One is the danger of mistaking a cyclical high for a structural shift. This happened when demand soared during the pandemic.

Another’s the uncertainty that comes with complex industries. The firm’s strategy shift failed because it was wrong about the future of drug development. That’s not to say investors should avoid these entirely. But they should be clear about what the potential dangers are. 

Despite all this, the company’s been a consistent source of growing passive income. And that might also be extremely important.

Risks and rewards

Five years ago, £1,000 was enough to buy 15 shares in Croda International. Now investors get more than twice that many. There’s still risk and there’s still uncertainty, but I think the stock’s worth considering at today’s significantly discounted prices.

The post £1,000 buys 35 shares in an incredibly reliable FTSE 100 dividend stock appeared first on The Twelfth Magpie.

In fact, if these forecasts are correct, then a £1,000 investment today could be worth up to £1,629 by this time next year – a 63% return in just 12 months!

A massive discount?

The value stock in question is Croda International (LSE:CRDA), with analysts at Barclays, UBS, JP Morgan, and Berenberg Bank all estimating the stock to be trading firmly below its intrinsic value.

The speciality chemicals group has had a rough ride of late, falling by over 70% since the start of 2022.

Why? Because Croda went from earning massive profits from specialised components needed for Pfizer’s and Moderna’s Covid-19 vaccines to suffering through a sustained industry-wide destocking cycle as the pandemic entered the rear-view mirror.

While the earnings collapse of £649m in 2022 to £62m in 2025 is real, the consensus among institutional analysts today is that investors have oversold.

Croda’s already seeing a resurgence in growth across its Consumer Care and Life Sciences segments, with crop protection, in particular, seeing a 14% jump in revenues last year.

At the same time, management’s targeting £100m in annualised savings by 2028, with £28m already delivered in 2025, paving the way for a small but noticeable bump in profit margins. But more encouragingly, thanks to a continued decline in capital expenditures, free cash flow also surged in the second half.

With more improvement projected throughout 2026, underlying operating margins are on track to expand to 18.4% this year from 17.4% in 2025, before climbing even higher to 19.5% in 2027.

Yet, despite this upward trajectory in the business, the stock price continues to fall into value stock territory.

What to watch

 Seeing shares tumble while operations improve is exactly what value investors hunt for. But Croda still has some challenges to overcome.

A big source of concern right now is supply chain disruption. Speciality chemicals typically have very complex supply chains, where production, processing and selling often happen on different continents. As such, Croda’s significantly exposed to trade disruptions like US tariffs.

Something else to keep an eye on is the group’s Consumer Care segment. Competition, particularly from China and India, has picked up drastically in recent years, undercutting Croda’s products and harming its margin recovery progress.

What’s the verdict?

When taking a step back, Croda shares look like a classic recovery play. Compared to the long-term earnings power of this business, the shares are trading at an unusually cheap valuation. But that’s only true if the business can continue rebuilding its profit margins and outmanoeuvre its rivals – something that isn’t guaranteed.

Nevertheless, at today’s valuation, the risk-to-reward ratio does look quite enticing. That’s why I think this value stock deserves a deeper dive. And it’s not the only potential buying opportunity on my radar this week.

The post Is this one of the best FTSE 100 value stocks right now? appeared first on The Twelfth Magpie.