Latest news with #FTSE350
Yahoo
2 days ago
- Business
- Yahoo
Want to turn a £20k ISA into a £1k second income overnight? Here's how
With so many dividend-paying companies to choose from, it's not difficult for UK investors to generate a second income in the stock market. And those fortunate enough to have £20,000 sat in their Stocks and Shares ISA can immediately start earning an extra £1,000 a year just by investing in 5%-yielding shares. And looking across the FTSE 350, there are quite a few businesses offering such potential. As of June, there are 66 stocks within the FTSE 350 offering a 5% or more level of payout. And this list includes some fairly big names such as HSBC at 5.5%, Aviva at 5.9%, and Imperial Brands (LSE:IMB) at 6.7%. Snapping up £20,000 worth of shares in any of these stocks would instantly start generating even more than £1,300 in passive income. However, just because a stock offers an attractive yield, that doesn't mean it's a guaranteed winning investment. Don't forget dividends can be cut at any time if the underlying business doesn't generate enough cash flow. As such, some due diligence is crucial before jumping in. With that in mind, let's zoom in on the highest-yielding enterprise on this list – Imperial Brands. High yields and tobacco companies aren't a new phenomenon. ESG investors actively avoid buying shares in these types of businesses, while many others are put off by the increasingly hostile regulatory landscape. As such, Imperial Brands, along with other companies like British American Tobacco, have long offered impressive levels of payouts for their shareholders. What's more, both businesses have long track records of steadily hiking their dividends over time. So far, that sounds fairly advantageous for those seeking a second income. Even more so, given management has recently reiterated its targets of growing its free cash flow to as high as £3bn to fund future dividends and share buybacks. However, while that certainly sounds encouraging, hitting this milestone is far from guaranteed. The firm's latest interim results were fairly lukewarm, with sales falling by 3.1% and operating profits sliding by 2.5%. While these figures were in line with market expectations, the announcement that CEO Stefan Bomhard is stepping down later this year came as a surprise to many. Despite only being in the role for five years, Bomhard's retiring and will be moving out of the corner office in October. Under his leadership, the company emerged from the pandemic and more than doubled its market cap. And although he's selected the current CFO Lukas Paravicini to succeed him, he has some pretty big shoes to fill. Undergoing a leadership transition while navigating through a tough regulatory environment and an ongoing rollout of new non-tobacco products is no easy feat. This risk's undoubtedly a big reason why the shares are down almost 10% since the announcement. So is this a stock worth considering for generating a second income right now? That all depends on personal risk tolerance. If Paravicini can continue to execute Bomhard's strategy successfully, then a lucrative income stream seems likely. But if he can't, the recent dip might be the start of another protracted decline in Imperial Brand's share price. Investors will have to mull over the possibilities to determine if the risk's worth the potential reward. The post Want to turn a £20k ISA into a £1k second income overnight? Here's how appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Imperial Brands Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Business Recorder
3 days ago
- Business
- Business Recorder
London stocks advance after US jobs data quells slowdown worries
LONDON: British equities rose in broad-based gains on Friday after a US jobs report allayed concerns of an economic slowdown in the world's biggest economy, with both UK blue-chips and midcaps clocking weekly advances. Global risk assets ticked higher after data showed US job growth slowed in May amid uncertainty around US President Donald Trump's tariffs, but solid wage growth should keep the economic expansion on track. 'The US jobs report data for May suggests the economy is holding up and far from recessionary,' said Janet Mui, head of market analysis at wealth manager RBC Brewin Dolphin. The blue-chip FTSE 100 gained 0.3%, while the more domestically-oriented FTSE 250 ended 0.4% higher. Both indexes clocked firm weekly gains. On the day, heavyweight banks were among the top gainers, with Standard Chartered up 2.9%, HSBC up 1% and Barclays climbing 1.9%. Precious metal miners, the best performing FTSE 350 sector this week, lagged on Friday, clocking a 1.8% decline. Aerospace and defence shares - which jumped earlier this week after Prime Minister Keir Starmer pledged the largest sustained increase in British defence spending since the end of the Cold War - gave some of those gains back, to fall 0.8%. The week has been a volatile one for global markets as investors grappled with ever-changing global trade dynamics. Trump doubled tariffs on steel and aluminium imports, though the UK received an exemption. Trump and Chinese leader Xi Jinping also confronted weeks of brewing trade tensions in a rare leader-to-leader call on Thursday that left key issues to further talks. Back in the UK, Finance Minister Rachel Reeves is scheduled to hold her first multi-year spending review on June 11 and is expected to divvy up more than 2 trillion pounds ($2.7 trillion) of public money between her ministerial colleagues.
Yahoo
23-05-2025
- Business
- Yahoo
UK 'bargain' stocks that have outperformed the market long-term
A number of FTSE 350 (^FTLC) stocks are trading on steep discounts, despite having outperformed the UK market over five years, according to an analysis by trading and investment platform IG. The list of companies ranges from household names to industrial firms, that are trading on a significantly lower price-to-earnings (p/e) ratio, compared to their five-year average. A p/e ratio measures a company's current share price against its earnings per share and is used by investors to help determine how attractive its stock is, as a lower p/e ratio can indicate that a company is undervalued. 'With such a heavy focus on US tech and the hugely volatile global macro environment, UK investors may have missed some of the quiet compounders closer to home, something recently noted by BlackRock's Larry Fink," said Chris Beauchamp, chief market analyst at IG. Read more: More interest rate cuts in doubt after surprise inflation surge "These UK names aren't cheap because they've struggled – they're cheap despite delivering," he said. "That's what makes this list particularly interesting for value-minded investors." This comes despite the fact that the FTSE 100 (^FTSE) hit a fresh all-time high in March and is currently trading near record levels. The FTSE 100 is up 6.9% year-to-date and the FTSE 350 – which covers the UK's large and mid-cap stocks – is up 6.1% so far this year. US markets, meanwhile, have experienced more volatility as US president Donald Trump pushed ahead with his tariff agenda. Choppy trading has left the S&P 500 (^GSPC) 0.7% in the red year-to-date. 'For years, UK stocks have been ignored by global investors, but that view is starting to change," said Beauchamp. "A cooling inflation picture, renewed interest in income-generating assets, and the prospect of several rate cuts this year are creating a very different environment. If global capital starts to rotate back into value – the UK is well placed to benefit." With that in mind, here are the "bargain" UK stocks that IG found had outperformed the FTSE 350 over the past five years. Engineering company Smiths Group (SMIN.L) topped IG's rankings, having delivered a total return – comprising of both share price growth and dividends – of 94%, despite having a p/e ratio 91% below its long-term average. Shares in Smiths (SMIN.L) jumped on Tuesday, following a trading update, in which it reported 10.6% organic revenue growth for the third quarter. The company's Smith Detection division, which makes equipment such as baggage scanners for airports, delivered "strong double-digit" organic revenue growth in the quarter. Read more: Stocks that are trending today On the back of the results, Smiths (SMIN.L) said it now expected revenue growth for the year to be at the top end of its 6% to 8% guidance range. In addition, the company said it was on track to announce the sale of its Smith Interconnect business, which provides products such as defence antenna systems, by the end of the 2025 calendar year. It said this would be followed by the separation of Smiths Detection through a UK demerger or sale. In second place on IG's list was supermarket Sainsbury's (SBRY.L), with a five-year total return of 92% but a p/e ratio 64% below its long-term average. Sainsbury's (SBRY.L) released its full-year results in April, in which it reported revenues growth of nearly 2% to £32.8bn ($44.1bn) and profit after tax climbing 76.6% to £242m. Read more: Pros and cons of lifetime ISAs Susannah Streeter, head of money and markets at Hargreaves Lansdown, said Sainsbury's (SBRY.L) has been "punching above its weight in the supermarket sector". "Sainsbury's (SBRY.L) continues to scoop up market share, in large part due to a herculean effort to improve products, value perception and innovation more generally," she said. "This should stand it in good stead if price wars do break out, as has been expected, among grocers." Next on the list is power generation business Drax Group (DRX.L), which has generated a total return of nearly 279% over five years but has a p/e ratio 60% below its long-term average, according IG's analysis. The company operates the UK's biggest power plant in North Yorkshire, which generates around 5% of Britain's electricity. However, Drax (DRX.L) has faced scrutiny over the sustainability credentials of its biomass plants, which burn wood pellets to produce power. In a trading update at the beginning of May, Drax (DRX.L) raised its guidance for adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the full-year 2025, saying it now expected this figure to be at the top end of consensus estimates. Drax (DRX.L) also said that it was continuing to target post-2027 recurring adjusted EBITDA of £600m to £700m. Cruise operator Carnival (CCL.L) ranked in fourth place, with the stock having generated a total return of 79% over the past five years, recovering some ground since the pandemic, but is trading on a 37% p/e discount. In results, published in March, Carnival (CCL.L) posted a record first quarter revenue of $5.8bn (£4.3bn), which was up more than $400m on the same period last year. Stocks: Create your watchlist and portfolio The company also delivered record first quarter operating income of $543m, which was nearly double the previous year. On the back of these results, Carnival (CCL.L) said it now expected adjusted net income for 2025 to be up more than 30% on 2024, and be $185m higher than guidance issued in December. Private healthcare provider Spire Healthcare Group (SPI.L) shares have generated a total return of nearly 119% over the past five years, according to IG, but the stock is trading on a p/e ratio that 36% below its long-term average. Shares in Spire (SPI.L) tumbled in March after the company warned in its full-year results that it expected to take a £30m hit to profits this year. It said this was partly down to increases to employer national insurance contributions and in the minimum wage, which were announced in the autumn budget, and came into effect in early April. Read more: Five 'buy' rated European travel stocks Despite the results continuing to weigh on the stock, Deutsche Bank ( director of healthcare equity research Kane Slutzkin reiterated a "buy" rating on the stocks in a note on Thursday. "We attended a roundtable with management ... with a focus on the primary care business and its ambitions to grow its EBITDA to £40m over the medium term," he said. "An integrated and more joined up healthcare model certainly makes sense in today's world, with a focus not only on treatment, but prevention and early diagnosis too," Slutzkin explained. "We left the meeting with a greater sense for what Spire (SPI.L) would like to achieve, in a very fragmented market, believed to be of similar size to the UK hospital care market (c.£6bn), with upside risk to our estimates, should they deliver." "The pathway to quadrupling its EBITDA might sound ambitious, but comes off a low base, has strong organic and inorganic drivers and room for gradual margin expansion," he added. Rounding out IG's top 10 "bargain" stocks were promotional merchandise company 4imprint (FOUR.L), medical device company ConvaTec Group (CTEC.L), bakery chain Greggs (GRG.L), insurance company Admiral Group (ADM.L) and hospitality company PPHE Hotel Group (PPH.L). Read more: More interest rate cuts in doubt after surprise inflation surge Average first-time buyers in London need almost £140,000 for a deposit The pros and cons of getting a mortgage into your 70sError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
These 10 FTSE income stocks could generate £33,137 a year in dividends
The 10 FTSE 350 income stocks with the highest yields are currently offering returns of 9.4%-14.1%, with an average of 11.3%. This means a £20,000 investment spread equally across all of them would generate annual passive income of £2,260. But reinvesting the dividends could generate better long-term returns. Using this approach, a £20,000 lump sum would grow to £290,676 in 25 years. This assumes the annual return of 11.3% is maintained throughout the period and that all income is used to purchase more shares. If all goes to plan, after a quarter of a century, this 10-stock portfolio could be generating dividends of £33,137 a year. Stock Yield (%) Diversified Energy Company 14.1 Ithaca Energy 13.0 Harbour Energy 12.8 NextEnergy Solar Fund 11.6 Ashmore Group 11.3 Energean Oil & Gas 10.8 Foresight Solar Fund 10.4 TwentyFour Income Fund 10.2 GCP Infrastructure Investments 9.5 aberdeen Group 9.4 Average 11.3 However, we must not get too carried away. Although there's nothing wrong with the maths in my example, it pays to be careful when a stock offers an apparently high yield. For example, even though Diversified Energy Company is top of the list, it was yielding over 30% in early 2024. Soon after, it cut its dividend by two-thirds. Although it's still number one, this does illustrate that double-digit returns should be treated with caution. Some experts claim that if a stock's offering a return twice that of the 10-year gilt rate (currently 4.45%), it's probably not sustainable. In fact, all of the stocks on my list would break this rule of thumb. Also, my analysis ignores any movements (up or down) in share prices. I think it's interesting that seven of the stocks have exposure to the energy sector. Some of them operate in renewables where long-term contracts and relatively fixed costs ensure earnings are, generally speaking, steady and predictable. However, this doesn't apply to Harbour Energy (LSE:HBR). As the largest oil and gas producer in the North Sea, its profit is at the mercy of energy prices, which are often volatile. And its near-13% yield is partly due to a share price that, on the back of a slump in oil prices, has fallen 43% since May 2024. I suspect investors also have concerns that the group faces an effective tax rate of 78% on its UK profit. That's why, in 2024, it acquired the upstream assets of Wintershall Dea. Although it hasn't helped the share price, the deal has transformed the scale of the group. This is evident from Harbour Energy's most recent trading update. For the first quarter of 2025, revenue was $2.8bn, compared to $0.9bn a year earlier. The acquisition means it's now operating in Norway — and other countries — where taxes are lower. On 7 May, the group blamed the 'windfall tax' for its decision to cut 25% of the workforce at its headquarters in Aberdeen. And these cost savings are expected to offset some of the impact of lower energy prices. This means free cash flow, in 2025, is forecast to be only $100m lower than the $1bn previously estimated. The annual dividend currently costs $455m. Earnings should also be helped by an upwards revision in forecast production. For these reasons, I suspect Harbour Energy's yield will start to fall over the coming months. Not because of a cut in its dividend but due to a rising share price. On this basis, those looking for an income share with solid growth prospects could consider the stock. The post These 10 FTSE income stocks could generate £33,137 a year in dividends appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Beard has positions in Harbour Energy Plc. The Motley Fool UK has recommended Foresight Solar Fund. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Business Wire
06-05-2025
- Business
- Business Wire
Falcon Windsor and Insig AI
LONDON--(BUSINESS WIRE)--Specialist reporting and advisory firm Falcon Windsor and Insig AI, a technology firm delivering advanced data infrastructure and AI-powered ESG research tools, ('the authors') today publish 'Your Precocious Intern', an in-depth research paper and practical model for the responsible use of AI in corporate reporting. This report, based on engagement with 40 FTSE companies and analysis of all FTSE 350 reports published from 2020 to 2024 reveals that generative AI use is increasing across UK companies, often without training, policy or oversight. While investors see AI's adoption as inevitable and look forward to the benefits and efficiencies it could bring, they are increasingly concerned about its implications for the truthfulness and authorship of corporate reporting. Practitioners and investors agree that reporting must remain the direct expression of management's opinion and that without guidance, AI use in reporting risks undermining the accuracy, authenticity and accountability that underpin trust in markets. The growing momentum in the adoption of AI leaves only a short window of opportunity to upskill and prepare to mitigate the risks it represents to the financial system. The report sets out clear recommendations for how companies can bring AI into the reporting process by design, not by accident. At its core is the guiding principle: treat generative AI like a precocious intern: useful, quick, capable, but inexperienced, prone to overconfidence and should never be left unsupervised. Claire Bodanis, Founder and Director, Falcon Windsor, said: 'I'm keen to try anything that will help companies report better, and, used well to support the purpose of reporting, generative AI could certainly do great things. But, if people use it unthinkingly, without proper training or guidelines, it could fatally undermine the accuracy and truthfulness of reporting. I hope this research will prompt the necessary debate!' Diana Rose, Head of ESG Solutions at Insig AI, said: ' The responsible use of AI is intrinsic to Insig AI's purpose and we hope that our collaboration with Falcon Windsor provokes thinking and provides guidance to all those involved in corporate reporting as they consider how to leverage AI tools for future ways of working, without compromising the flow of trusted information.' The full report is here and its four key findings are evidenced below. KEY FINDINGS 1. USE OF AI IS GROWING BUT MORE TRAINING IS NEEDED TO REAP THE BENEFITS AND MANAGE RISKS Most of the companies interviewed were investigating generative AI, from ad hoc use of chatbots and testing Microsoft Copilot to very tightly planned and controlled adoption. Only a few, generally larger companies, had formal projects in place for its use, particularly in the finance teams. There was a distinct lack of formal training on how to use generative AI effectively. The number of FTSE 350 companies mentioning AI in their annual report more than doubled between 2021 and 2024, while the average number of mentions increased fivefold over that period. In 2024, 68% of FTSE 350 companies made some mention of AI in their annual reports (including 76% of the FTSE 100). Not a single report yet refers to generative AI in relation to the reporting process, which suggests we have a window of opportunity to develop a practical model for its use. 2. INVESTORS WANT REASSURANCE ON ACCURACY AND AUTHORSHIP All focus groups acknowledged the attractiveness of AI to reduce a growing workload driven by changing disclosure requirements. The average length of FTSE annual reports has been increasing over the past decade. Incoming changes to UK and EU sustainability reporting requirements suggest the trend will continue and generative AI could make the reporting process more productive and efficient. However, they fear the risks. Even assuming that an 'enterprise' version of AI is used and data is securely ringfenced, the interviews uncovered the following concerns: All output will end up sounding the same – generative AI systems used by companies tend to be based on a limited number of foundational models It will appear as though leadership 'can't be bothered' with reporting Generative AI will make it easier to 'game the system' by the inclusion of tickbox buzzwords and phrases, especially with the initial analysis of reporting often coming from machines Reporting will include poorly sourced information given that generative AI is a 'black box' While investors are open to the use of generative AI for handling large volumes of information, they are clear that the voice of the report must remain human. They expect the opinions, judgements, and forward-looking narratives to come from management and the Board and not from a machine. The concern is that outsourcing these elements risks weakening the relationship of trust that reporting is meant to build. Investors are also asking companies to state clearly how AI is used in their reporting processes. 3. THERE IS A NARROW WINDOW TO GET IT RIGHT General usage in producing corporate reporting is still low and most companies are in early stages of AI adoption. This gives companies a crucial opportunity: to introduce AI into reporting processes thoughtfully, with appropriate checks and balances. Acting now allows organisations to reap the benefits of efficiency while ensuring that reporting continues to meet its fundamental purpose: building trust through accurate, clear, and authentic communication. 4. THERE IS SCOPE FOR GUIDANCE FROM THE REGULATOR The participants do not expect or want more regulation but believe a clear signal from the Financial Reporting Council or the FCA would be welcome. Even a gentle reminder that the use of generative AI does not change companies' and directors' existing duties, but could have a significant effect on how they discharge them. As generative AI becomes more embedded, such reassurance could help companies strike the right balance between innovation and accountability. 'The precocious intern' is bright, capable, and eager but inexperienced and prone to overconfidence. Treating AI like such an intern means checking its work, giving it clear boundaries, and never allowing it to operate unsupervised. Everything about how companies use generative AI in reporting should flow from this mindset. To make the best use of a new army of precocious interns, the report advocates: introducing a formal training programme, with modules for reporting confidential information, requiring people involved in corporate reporting to take part and tracking their participation learning, and practising, how to write good prompts, but never forgetting generative AI is trained to respond to a prompt, not to give a truthful answer becoming a better reader, so you can properly judge what the output means and whether it will be understood by your audience And managing disclosure using: in the short term, a general statement either as a note up front saying generative AI has not been used or a discussion in the governance report saying it has in the longer term, specific disclosure explaining the policy the company has taken to using generative AI in reporting and including a negative statement of use in sections that cover forward-looking information and matters of opinion – neither of which are, in the authors' views, appropriate uses of generative AI Used well, generative AI can support administrative and process-heavy tasks: summarising meetings, cleaning up copy, and helping draft routine disclosures. It's also useful for research, creating visuals and making early-stage edits. But it should not be used for writing opinion-led sections, strategic messaging, CEO letters or forward-looking commentary. It cannot be trusted with final sign-off, nor should it be allowed to work with sensitive data outside secure systems. Companies should ensure training is in place, establish simple governance guidelines, and clearly disclose if and how AI was used in the report to preserve both the integrity of reporting and the trust it is meant to build. Genesis and methodology In early 2023, Claire Bodanis, founder and director of Falcon Windsor, realised that the advent of ChatGPT and likely wholesale use of generative AI could raise issues for the accuracy of corporate reporting and for directors' duty under the UK Corporate Governance Code to ensure that reporting is fair, balanced and understandable. Today's research is the latest, most in-depth step in Falcon Windsor's campaign for responsible use of AI in reporting. It was developed over a 15-month period, using Falcon Windsor's insight into corporate reporting and network of investors and companies and Insig AI's database of machine-readable corporate reports and expertise in analysis using AI. The authors designed the research plan with input from Imperial College, London and the UK's Chartered Governance Institute and carried out: A quantitative review led by Insig AI of over 21,000 corporate documents, looking at what FTSE 350 companies are saying about how they are using AI across annual reports and related material published on their corporate websites. A qualitative review led by Falcon Windsor of the views expressed in 12 focus groups of five institutional investors, one proxy agency and representatives of 40 companies (including 20 FTSE 100s). NOTES TO EDITORS About Falcon Windsor Founded in 2004 by Claire Bodanis, Falcon Windsor is a team of 30+ independent experts committed to helping companies small and large, private and listed, produce truthful, accurate, readable reports that their investors and other stakeholders believe because they tell an honest, engaging story. We love sharing our expertise through our book, webinars, conference appearances and through working with regulators, and people from every aspect of company life. About Insig AI Founded in 2018 and listed on AIM, Insig AI plc is a UK-based technology company specialising in data infrastructure and AI-powered ESG solutions. With deep expertise across data engineering, machine learning, and sustainability, we help organisations turn complex, unstructured information into decision-ready intelligence. Our solutions bring together two core capabilities: Data solutions that ingest, structure, and connect large-scale datasets – making them machine-readable, AI-ready, and enabling advanced analytics and efficient access to high-quality data. ESG research tools that support powerful intelligent search, benchmarking, and analysis of corporate reports – built on transparent, traceable data you can trust. We work with investors, corporates, and consultants to enable smarter decisions across finance, ESG, and beyond.
