But after profits declined disappointingly in 2025, forecasts suggest slow but steady growth over the next few years. The dividend is expected to be held this year — for a 4.1% yield on the 1,644p closing share price on Tuesday (2 June). But after that, analysts see it getting back on a modest upward path.

So what might the Greggs share price do next? Are shareholders in for another bullish phase? We need to take a look at what the City brokers think might happen.

Broker upgrades

The four most recent broker recommendations I can find were all published in May, from UBS, Jefferies, Deutsche Bank, and Berenberg. Three of the four date from after Greggs’ trading update for the first 19 weeks of the year, released on 12 May.

^{Sources: Sharecast, London South East}

We often see variations between different analyst opinions. But the range for these four, over the course of just four days, suggests a pretty wild range of valuations. The biggest of them is a full 65% higher than the smallest, and 34% ahead of where Greggs shares last closed. The smallest suggests a 19% fall.

Pricing pressure

Greggs’ product price rises have been held back quite impressively. So how has the company managed that, when so much else has been soaring? The latest update gave us an idea…

Our forward buying of key commodities continues to provide protection against increased inflation in the near term; we have forward purchase agreements in place representing circa five months of cover for our food and packaging needs and 85% of our 2026 energy and fuel requirements are fixed in price. In addition, circa 50% of our 2027 energy and fuel requirements are fixed.

— Greggs Trading update, 12 May

That does sound like smart forward planning. But, we can’t really be sure what the final effect might be. With energy and fuel, hopefully prices will fall again once the Middle East returns to what passes for peace there. And having so much fixed in price so far out is quite an achievement.

But food and commodities prices? I can’t see those coming back down. And Greggs’ actions can, surely, only delay the inevitable higher end prices. I wonder if that uncertainty might lie, at least in some way, behind the wide range of broker targets.

New bull cycle?

With a forecast price-to-earnings (P/E) ratio of 13.5, I don’t see the valuation needed to support fresh growth just now. And with that in mind, I think investors considering Greggs might do better to wait and see how the year progresses — as food inflation feeds through.

I do think Greggs is worth considering as a long-term dividend stock. But I don’t see any rush.

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

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

The post The latest broker outlooks on Greggs shares look wacky, so what’s happening? appeared first on The Twelfth Magpie.

Investors really got behind the Newcastle bakery chain as it transformed itself from a tired high street staple into a national food-on-the-go giant.

Sales boomed. Stores spread relentlessly from high streets to railway stations and airports. Cult products such as the vegan sausage roll grabbed headlines, while profits climbed relentlessly. At one point, Greggs traded on a chunky price-to-earnings ratio above 23, while the yield sank close to 2% as investors chased growth. Then reality began to bite.

What changed for this retail darling?

Greggs was always a cheap treat but as the cost-of-living crisis intensified, its rampant sales and share price growth slowed. At the same time, rising inflation pushed up costs. Energy bills climbed, the minimum wage rose, and employer’s National Insurance hikes further squeezed margins. Also, I can’t have been the only investor questioning whether Greggs had simply expanded too far, too fast.

Full-year 2025 results showed sales rose 6.8% to £2.2bn, helped by 121 net new stores. But like-for-like sales rose a more modest 2.4%. Free cash flow dropped from £104m to £75m. Net cash also fell, from £125m in 2024 to £46m in 2025, following heavy spending on store expansions and supply chain infrastructure. The board froze the dividend at 69p after years of growth. Underlying pre-tax operating profits have gone into retreat:

• 2025 – £187.5m 
• 2024 – £195.3m
• 2023 – £171.7m
• 2022 – £154.4m
• 2021 – £153.8m

However, sentiment picked up after Greggs issued a solid trading update on 12 May. Sales climbed 7.5% to almost £800m, although like-for-like sales picked up only marginally to 2.5%. Management also held full-year guidance and said underlying operating profit should broadly match last year’s £188m.

Can this FTSE 250 stock’s recovery gather pace?

Greggs shares jumped on the day and now trade almost 14% higher over one month. That’s despite dipping in the last week as wider market nerves returned. They’re down 18% over 12 months. So there’s still a buying opportunity here.

The shares look far less frothy than before. The price-to-earnings ratio has dropped to 13.9 while the trailing dividend yield has climbed to 4.17%.

Greggs still has ambition. It’s rolling out new stores at pace, stretching opening hours, adapting menus, and growing through franchise partnerships, which reduce operating costs. Management also locked in roughly 85% of energy costs for this year, which offers some protection if oil prices remain high.

However, Greggs still relies heavily on Brits having spare cash for affordable treats, and the economy looks weak, inflation is squeezing incomes, and unemployment keeps rising. The shares may still pick up, but I can’t see them generating the same bewildering excitement they did before.

I’ve watched this stock for years and at today’s valuation it’s far more tempting than it has been for some time. Yet I still can’t bring myself to buy it for my own portfolio. I just feel there must come a point when Britain hits peak Greggs.

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

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

The post Are Greggs shares about to go gangbusters all over again? appeared first on The Twelfth Magpie.

In recent years though, things have looked less rosy. Greggs’ share price is down 16% over one year – and 31% over five.

Sure, there is still a meaty 4% dividend yield to help keep investors sweet. But the long-term price fall and value destruction is a real cause for alarm.

What has happened – and could Greggs’ shares bounce back?

A business that’s faced many challenges in recent years

One dent in the Greggs’ story came with the pandemic. Suddenly its low-tech business model reliant on thousands of physical locations came to look like a potential liability more than an asset. Shops were shuttered, cash flows tumbled and the dividend was suspended.

While those days are well behind us, I think they undermined many investors’ longstanding confidence in Greggs. The episode pointed up a fragility in the business model that remains a standing risk today.

Then there is the question of how much Greggs is too much?

The company has continued its onwards march of shop openings. It ended last year with over 2,700 and reckons that there is potential for well over 3,000 in the UK over time.

But the novelty factor has long since worn off while regional rivals like Bayne’s are nipping at Greggs’ heels. Trends including shifting working patterns and weightloss drugs have combined to reduce demand for hot pastries among some consumer groups.

Changing weather patterns can reduce demand for hot pastries too. A shock profit warning last summer not only flagged that as a risk, but also raised questions about whether Greggs’ management had the right skills in demand planning to meet what customers want and when they want it.

On top of that, all those shops need a lot of staff. Wages and National Insurance prices going up in the past few years has added costs. That is an ongoing risk, as are elevated power prices for the energy-hungry baker.

Here’s where a long-term view can help an investor

Stepping back though, many of those strike me as short-term problems. That is not to underrate their impact. But they can be fixed, in my view.

I am a long-term investor. While Greggs has plenty of short-term challenges, I do not think it is holed beneath the waterline as a business.

In fact, I think it is in pretty good shape. Its offer and value proposition are unique and attractive – no small feat for a purveyor of simple fare like sausage rolls.

The relatively affordable prices mean that, even if costs rise, Greggs has capacity to pass them onto customers in the form of higher prices, without necessarily giving up its competitive edge.

What I think is the biggest issue is demand. Are people turning away from Greggs?

The evidence suggests not. Total sales last year grew a healthy 7%. That was largely driven by shop openings, but notably like-for-like sales in company-owned shops grew 2%.

To me that suggests that Greggs’ appeal remains. Priced at 14 times earnings, I see it as a share for investors to consider.

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

Christopher Ruane owns shares in Greggs.

The post Here’s why Greggs shares have been struggling – and may be undervalued! appeared first on The Twelfth Magpie.

Both stocks are offering market-beating dividends. But how much income might shareholders expect moving forward? Here are the latest forecasts.

Big short interest

The first thing to note is that this pair have struggled during the latest chapter of the cost-of-living crisis. Domino’s, which operates the franchise brand in the UK and Ireland, is down 43% in two years while Greggs has slumped 41%.

Some of the key reasons include:

• Squeezed consumer spending.
• Higher input costs (food, energy, fuel, etc).
• Higher labour costs (wages/National Insurance)
• Slower sales growth.
• Under-pressure profits.

All of these risks are very active, of course. Food and energy costs are going up, which could have a double-whammy effect on the two firms, squeezing both customers’ budgets and profit margins.

Therefore, it’s no surprise to see that the stocks are among the most shorted in the UK. In other words, hedge funds and institutional traders are betting they have further to fall.

Short interest is the total number of a company’s shares that investors have borrowed and sold, but not yet bought back to close out their positions. Greggs is the fifth most-shorted UK stock today. 

What are the latest forecasts?

One positive for new investors is that the struggling share prices have pushed up the dividend yields. Domino’s is sporting a 5.9% yield while Greggs’ is 4%. Both are higher than the FTSE 250, which is 3.3%.

Looking ahead, analysts are understandably not pencilling in bumper hikes in the payouts this year. The Domino’s dividend is expected to be flat at 11.3p per share, as is Greggs’ at 69p. Therefore, we get the same yields as before.

Turning to next year though, analysts are a little more optimistic. They see 12p for Domino’s and 70.3p, giving forward-looking yields of 6.3% and 4.1% respectively.

As mentioned though, the inflationary effects, including from the Iran war, cast a shadow over the UK economy and consumer spending. If things turn really ugly, both dividends could be reduced.

Which stock do I like better?

As challenging as things are, both firms recently put up resilient figures. Greggs’ total sales rose 7.5% to £800m in the first 19 weeks of the year, with like-for-like (LFL) sales at company-managed shops up 3.3% in the last 10 weeks.

Meanwhile, Domino’s Q1 LFL sales unexpectedly increased 4.5%, the pizza firm’s fastest growth in 11 quarters. Its new ‘Chick ‘N’ Dip’ offer’s been going down well and sales are expected to be strong over the summer during evening/night World Cup games.

Which stock do I prefer? I actually think both are worth considering for passive income, especially Domino’s with its 6.3% forward yield. If met, it would pay about £500 from an £8,000 investment.

But to my mind, Greggs has stronger long-term growth potential. It’s targeting 3,000+ shops (up from 2,740 today), including more locations in train stations and supermarkets. Greggs is also expanding into evening trade (after 4pm).

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

Ben McPoland has no position in any of the companies mentioned.

The post Here are the latest dividend forecasts for Domino’s Pizza and Greggs shares appeared first on The Twelfth Magpie.

The company has been showing signs of life recently. Unfortunately, one of the big challenges of the last 12 months looks like it’s starting to reappear. 

Signs of recovery

The reason Greggs shares are up is simple. The company’s stores are doing better. 

On a like-for-like (LFL) basis, sales grew 3.3% in the 10 weeks leading up to 10 May. And that reverses a trend of downward numbers since 2022.

Realistically, the company can’t open that many more new outlets. So future growth is going to have to come from the ones it has. 

That’s why the LFL sales growth figure is so important. And even a move from 2.5% (in 2025) to 3.3% can make a big difference.

That’s why the stock has started a recovery after a prolonged decline, but the big question is what happens next. And I’m wary.

Hot stuff

Last July, Greggs issued a profit warning when UK temperatures reached 35 degrees. Not so many people want to eat sausage rolls in that weather.

The stock – obviously – didn’t react well to that news. But fast-forward to today and the record for the hottest day in May has just been broken – twice.

On Monday (25 May) and Tuesday (26 May) parts of London reached their hottest levels on record for this month. Coincidentally, that’s also 35 degrees.

I’m not saying there’s a golden rule that steak bake sales fall off a cliff when the temperature reaches that level. But investors would be unwise to ignore this entirely.

Management has identified this as a challenge before. And I wonder whether it might derail the recovering LFL sales growth and put pressure on the share price.

Does this really matter?

In the grand scheme of things, a couple of hot days in May don’t matter much for investors. Especially not over the long term. 

In the context of a 10-year investment, two bad days are less than 0.01% of the overall returns. By themselves, they aren’t going to make a huge difference. 

The stock market, however, is likely to act as though they will. If LFL sales growth slows, I expect the share price to respond in a similar way.

That’s not to say that the next results won’t be insightful. Greggs has been making moves to try and become more of an all-weather proposition.

Will the introduction of new products bring customers in for things other than sausage rolls? I’ll be watching the next results with interest.

What should investors do?

The stock market is trying to figure out what long-term LFL sales growth will be for Greggs. And it’s not been a straightforward job recently. 

Unusual weather is one of the things that can distort the picture. It can weigh on sales, bringing headline figures down. 

Investors, however, need to focus on the long-term picture. A weather-induced temporary setback could be an opportunity worth considering.

Stephen Wright has no shares in any of the companies mentioned.

The post Up 12.8% in May! But is the recovery in Greggs shares about to be short lived? appeared first on The Twelfth Magpie.

Risky business

I started investing in the 1980s, so I’ve lived through six major market meltdowns. In the first — Black Monday (19 October 1987) — the S&P 500 collapsed by 20.5% in one day. Yet the index ended that year up 2% (excluding cash dividends).

Lesson #1: over decades, and in hindsight, even brutal market falls can resemble tiny bumps in the road.

My next stock market crash was the ‘dotcom bubble’ bursting. During this financial panic, the hugely overvalued US Nasdaq Composite index was crushed, plummeting 78% from March 2000 to October 2002.

Lesson #2: when share prices become crazy, financial gravity eventually brings them back to earth with a bang.

My third market rout was the global financial crisis (GFC) of 2007-2009. Back then, things got so bad that it capitalism itself was wobbling and panic hit high streets as savers rushed to withdraw cash from ailing banks.

Lesson #3? Buy during times of maximum despair. Our family investments made in March 2009 are now worth 10+ times what we paid.

Remember the Covid-19 crisis of 2020/21? The US and UK stock markets both crashed 35% in a month before rebounding strongly.

Lesson #4: following Warren Buffett’s advice, my wife and I were greedy when others were fearful, putting 50% of our fortune into shares just as markets turned. Market timing may be for mugs, but this one decision paid off big-time.

Lesson #5: we always keep cash to buy more shares at fair or bargain prices. Lately, around a sixth of our portfolio is in low-risk, low-fee money-market funds as a cash reserve.

Baking bad?

I try to avoid the worst of market meltdowns by buying cheap shares. Sometimes, I buy into established companies after sudden price slides. For example, we bought Greggs (LSE: GRG) shares for 1,696.7p each after a one-day price plunge last July.

Greggs stock is down 14.8% over one year and 30% over five years. Currently, this FTSE 250 stock trades at 1,743p, valuing this leading ‘food to go’ chain at £1.8bn.

However, these returns exclude dividends, which are increasingly generous from this British business. The shares’ 4% dividend yield easily beats the FTSE 100’s cash yield of 3.1% a year.

Greggs sells a wide range of reasonably priced food and drinks through 2,600 UK outlets. Yet, the shares are far below their all-time high of 3,443p hit on 31 December 2021. Today, trading on just 14.6 times trailing earnings, I would argue this stock is already in the bargain bin and ripe for recovery.

Of course, sustained inflation and the rise of GLP-1 diet drugs could hit Greggs’ sales and profit margins, while it is often at the mercy of bad weather and tax rises. And while this share is by no means crash-proof, I suspect it will survive the next stock-market crash — whenever that may be!

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

Cliff D’Arcy has an economic interest in Greggs shares.

The post 5 lessons for investors from 6 stock market crashes appeared first on The Twelfth Magpie.

However, it’s been a different story over the last six months, with the company’s shares rising by a tasty 21.2%.

If someone put £3,000 into its shares six months ago, their investment would now be worth £3,637.

That £637 is a very good profit considering the size of the initial investment. But given that the share price is still down from a year ago, can the bakery chain’s shares offer us more over the long term?

Recent results show promise

Greggs released a trading update for the first 19 weeks of 2026 to 9 May. There was plenty to note from it:

• Total sales are up 7.5% year-on-year to £800m.
• Like-for-like (LFL) sales growth is 2.5%.
• LFL sales for the recent 10 weeks is 3.3%.
• 20 net openings of shops, with 2,759 now trading.
• Cost inflation expected to remain around 3%.
• Expected outlook for the year remains unchanged.

Now, there’s plenty to like about this report. There’s good sales growth, and the general outlook, including cost inflation, is expected to remain the same. This is a relief, considering there are inflationary fears resulting from the war in Iran.

In fact, it looks like these promising results eased investors’ fears. Most of the six-month return I mentioned above on the company’s shares occurred after these results were released. Prior to this, its shares were up only 5% from the start of the six months.

But don’t get too eaten up by the positives

While there were positive elements to Gregg’s trading update, there were also areas that should remind us not to get too excited.

Total sales were indeed up by a decent 7.5%, but LFL sales were only up 2.5%. Given that cost inflation is 3%, sales were actually down once we adjust for this.

Therefore, the company is still facing a growth problem with a battle to stop sales falling once adjusted for inflation.

The one good point to note in respect of this is that LFL sales were up 3.3% for the latest 10 weeks. But the company needs to beat inflation consistently to ease concerns.

Still a great passive income opportunity?

Even though the fundamentals of Greggs’ future are somewhat mixed, one thing I think is more certain is that it’s a great passive income choice.

Ignoring special dividends, since the bakery chain restored its first dividend after the pandemic, it has maintained or increased its payout per share.

What’s more appetising is that over the past five years, the firm’s shares have fallen by 30.7%. You might be wondering why this is positive. Well, income investors will be aware that they can now obtain higher dividends from the firm for a 30.7% cheaper price.

It’s important to bear in mind that dividends aren’t guaranteed. But provided the company can maintain its dividend, its 4% yield looks enticing.

And, I don’t think there’s much risk to its dividend. Its earnings per share were 122.8p for 2025, while its dividend was 69p, so there’s a big margin of safety.

Ultimately, I have mixed feelings about the business. That said, I still believe Greggs shares are worth considering for income investors.

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

Muhammad Cheema does not hold any positions in the companies mentioned.

The post £3,000 invested in Greggs shares 6 months ago is now worth… appeared first on The Twelfth Magpie.

Since the start of May, Greggs shares have jumped over 10% thanks to a better-than-expected trading update. So, what was in this report that has investors excited? And could this be the start of a much larger rally?

Has Greggs finally turned a corner?

Greggs’ latest headline numbers were pretty encouraging. Total sales in the first 19 weeks of 2026 rose 7.5% to £800m, while like-for-like (LFL) sales in company-managed shops grew 2.5% over the same period. But more recently, that figure improved further to 3.3% when zooming in on just the last 10 weeks.

While this organic growth is still a far cry from the double-digit expansion the business used to generate, it nonetheless reveals a re-acceleration of growth, driven in part by successful product innovation.

In management’s own words: “LFL sales performance has improved against what remains a challenging market” – a welcome signal compared to what shareholders had to endure last year.

The update also showed the company is still pushing ahead with its store expansion growth strategy.

Greggs opened 41 gross new shops in the period, with 20 net openings, taking its total estate to 2,759 locations. It also reiterated its ambition to open around 120 net openings before the end of 2026.

In my experience, companies that continue to invest in growth even during the tough times often end up outperforming their rivals. So, it shouldn’t be surprising that the company is also starting to take market share in the Food-On-The-Go sector.

But can this momentum continue?

What still needs watching?

Even with these better-than-expected results, Greggs is not out of the woods just yet.

Management still expects around 3% cost inflation on a like-for-like basis, and it warned that prolonged conflict in the Middle East could push inflation higher into 2027, translating into both margin compression as well as potentially weaker consumer spending.

There is also the timing issue around investment. The new Derby site and National Distribution Centre in Kettering are both crucial for future growth. But they will also bring extra costs in the near term before the benefits fully materialise in the medium-to-long term.

That means margins could remain under pressure in the second half of 2026 – a risk to watch carefully.

Still, overall, this trading update seems to reveal that the business is getting back on track after a challenging period. Greggs shares still have a long way to go before returning to their pre-2025 levels. But if the firm can continue to make solid progress, the stock could be worth considering again.

That’s why I’ve already added it to my watch list. And it’s not the only business I’ve got my eye on today…

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

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

The post Greggs shares just jumped 10.6%! Could it go on a (sausage) roll? appeared first on The Twelfth Magpie.

Free money sounds too good to be true. Is it?

Money for nothing

In this case, no. It’s true. But – inevitably – there are some strings attached. After all, as the old saying goes, there’s no such thing as a free lunch. So let’s get into things in more detail.

A SIPP’s basically an investment vehicle, like an ISA (though the two have some big differences). It’s possible to have both a SIPP and an ISA. In fact, many people do – I’m one of them.

The appeal for many investors of a Stocks and Shares ISA is that capital gains and dividends inside it aren’t taxed.

That’s also the case for a SIPP, though unlike a Stocks and Shares ISA there are restrictions about when money can be withdrawn. When it is, apart from a tax-free allowance, the remainder could be subject to tax.

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.

But a SIPP comes with something an ISA doesn’t: tax relief on the money invested. Basically that means that the Exchequer tops up the money someone puts in, at a level designed to negate the impact of having paid income tax on it in the first place. For higher and additional-rate taxpayers, that relief will be even more lucrative.

In practice, this is free money.

Put £20k into a Stocks and Shares ISA and you have £20k to invest (depending on the fee structure of your chosen Stocks and Shares ISA, of course). Put £20k into a SIPP and, again, depending on the fees of the SIPP provider – you have £25k to invest. Simple as that.

There’s more than one type of ISA and I am focusing here on Stocks and Shares ISA (a Lifetime ISA can also offer free money in the form of tax relief, though again, like a SIPP, that platform structure has its own specific strings attached).

More money can mean… more money!

Of course, the SIPP itself (or ISA, come to that) is only the first step. Having set one up, the question then becomes how to invest. Over the long term, of course, that’s where the free money of a SIPP could be useful – providing more capital, hopefully to help the SIPP gain even greater value over the long run.

One of the shares I hold in my SIPP is Greggs (LSE: GRG). The past couple of years have seen Greggs’ shares lose their former popularity with many investors. No wonder, the share price has tumbled 21% in the past year alone.

Investors fret about possible market saturation, rising energy costs, rising wage costs and weakening consumer sentiment. That is before even taking into account Greggs’ poor demand planning that led to a shock profit warning last summer.

But while there are risks, I think Greggs remains a tremendous business. It has a strong brand and compelling value proposition that’s helped it build a loyal, large customer base. The bakery chain’s growing on a like-for-like basis, with plentiful new shop openings adding further growth.

It’s profitable and cash generative, helping support a 4.1% dividend yield. I see it as a share for investors to consider.

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

Christopher Ruane owns shares in Greggs.

The post Does a SIPP really offer free money? What about an ISA? appeared first on The Twelfth Magpie.

A trading update last week seems to have brought a relief rally to the shares, up 12% over the past week.

But what has the longer-term picture been – and could this latest jump perhaps be the start of a long-awaited turnaround for the FTSE 250 share?

Six-month gain – and passive income prospects

Over the past six months, the Greggs share price has moved up 14%. So, yes, most of that growth comes from the past week. But it is growth nonetheless.

That is welcome, given the longer-term performance of Greggs shares: down 15% over one year and 32% over five.

The recent growth means that, whereas £5k invested in Greggs shares five years back would now have a paper value of £3,400, the same amount put in six months ago instead would have grown in value, to £5,700.  

Plus there are dividends to consider. The current yield is 4.1%, already attractive in my view (indeed, I own Greggs shares partly for their passive income potential).

But someone buying at a lower share price six months ago would be earning a higher yield, close to 4.7%. On a £5k investment, that would work at around £235 of dividends per year.

So, what is going on?

Worries about growth and costs

Greggs shares have been pushed downwards over the past few years for a combination of reasons.

In terms of top line demand, there have been investor concerns that the company’s store-opening programme, when it already has thousands of shops, could eat into per-shop sales. Overexposure could hurt demand and so too might some consumer’s use of weight loss drugs.

Meanwhile, at the bottom line, costs such as National Insurance have grown – and the Middle Eastern conflict poses a risk the company’s energy bill will go up. For a baker, that is a significant cost.

Could this be the shape of things to come?

The recent trading update provided some reassurance for investors.

Total sales for the first 19 weeks of this year were up 8%. Some of that was driven by new shop openings, but even on a like-for-like basis the period saw company-managed shops grow sales by 3% year on year.

While the company does expect cost inflation across the full year of around 3% on a like-for-like basis, that was no worse than it had previously signalled. Indeed, the company has maintained its outlook for the full year.

That was enough to cheer investors.

Even after their strong run in the past few days, Greggs shares sell for 14 times earnings.

That is cheaper than it has been at times in the past, but Greggs now looks set to deliver the sort of revenues that shareholders could only dream of a decade or two ago.

From a long-term perspective, I think the share is worth considering – and plan to hang onto my own Greggs shares.

Christopher Ruane owns shares in Greggs.

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