Latest news with #PhoenixGroup
Yahoo
2 days ago
- Business
- Yahoo
In 1 year, the Phoenix share price could turn £1,000 into…
The Phoenix Group (LSE:PHNX) share price has had a pretty terrific first half in 2025, climbing by over 25%. And yet, despite this upward trajectory, continued dividend hikes by management means investors can still secure an impressive 8.4% yield. Of course, a high yield's worthless if the dividend can't be sustained. Yet, looking at the group's latest results, that doesn't seem to be a major issue for Phoenix. Operating cash generation in 2024 grew 22% to £1.4bn. That was firmly ahead of expectations, with management not initially expecting to reach this level until 2026. Needless to say, hitting financial targets two years early is an encouraging sign. To top things off, the group's Solvency II Shareholder Capital Coverage ratio also stands tall at 172%. In other words, the balance sheet has ample financial resources to act as a buffer should macroeconomic conditions take a turn for the worse. With that in mind, it's not hard to see why income investors are excited about what the future holds. So how much money can investors make with a £1,000 investment today? Investing in high-quality businesses for the long term is a proven strategy for building wealth in the stock market. However, valuation can have a significant impact on performance. And right now, despite the strong financial results, it seems most of this growth's already baked into Phoenix Group's share price. The most optimistic price forecast currently projects this stock could rise to 718p if its new private market-focused investment products prove popular among customers. That's roughly 11% higher than where the shares currently trade, suggesting that a £1,000 investment today could be worth £1,110 by this time next year, along with an extra £84 from dividends. However, as previously stated, this is the most optimistic forecast. By comparison, Berenberg Bank, Morgan Stanley, and Bank of America all have price targets between 640p and 650p, suggesting the stock's already fairly valued. If these more conservative projections prove correct, the returns on a £1,000 investment could be almost entirely driven by dividends. An 8.4% gain from shareholder payouts is nothing to scoff at. After all, that's roughly double what most high-interest savings accounts currently offer. And with dividends expected to grow further next year, this yield could climb even higher if the Phoenix share price does decide to remain stagnant. However, it's important to highlight some key risks surrounding this business. Like many insurance businesses, Phoenix is highly sensitive to changes in interest rates. While the business currently boasts a large capital buffer, volatility induced by shifting interest rates could harm asset values, applying pressure on the group's solvency ratios and, in turn, dividends. Another significant threat to watch carefully is the group's ongoing pivot to becoming a more capital-light enterprise. I've already highlighted the potential gains from management expanding its private market offer. However, success in this strategy is far from guaranteed. And if customers are reluctant to explore these new opportunities, growth could fall short of expectations. All things considered, Phoenix could be a compelling income investment to consider. However, it comes with considerable risks that management doesn't necessarily have a high level of control over. And with other lower-risk income opportunities to explore, I'm not rushing to buy right now. The post In 1 year, the Phoenix share price could turn £1,000 into… 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 Bank of America is an advertising partner of Motley Fool Money. Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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
Yahoo
2 days ago
- Business
- Yahoo
£10k to invest? A UK share, investment trust and ETF to consider for an £870 second income this year
Diversification's critical when seeking a reliable second income over time. A broad portfolio can absorb individual dividend shocks better than one containing just a handful of stocks. Spreading risk over a number of investments doesn't mean settling for inferior returns either. Take the following shares, investment trusts and exchange-traded funds (ETFs), for example: Stock Forward dividend yield Target Healthcare REIT 8.6% iShares World Equity High Income ETF 9% Phoenix Group (LSE:PHNX) 8.5% As you can see, the dividend yield on each of these stocks comfortably beats the FTSE 100 average (currently around 3.4%). It means a £10,000 investment spread equally across them could — if broker forecasts are accurate — provide an £870 passive income over the next year alone. What's more, a portfolio containing just these three stocks would provide (in my view) exceptional diversification. In total, these investments deliver exposure to 346 different companies spanning multiple sectors and global regions. Here's why I think they're worth serious consideration today. Real estate investment trust (REIT) Target Healthcare's set up to deliver a steady stream of dividends to shareholders. These entities must pay at least 90% of annual earnings out this way in exchange for juicy tax breaks. By focusing on the care home sector — it owns 94 in total — this trust has exceptional long-term potential as the UK's elderly population booms. It also benefits from the sector's highly stable nature, while inflation-linked leases boost earnings visibility still further. Be mindful though, that labour shortages in the nursing industry could dent future returns. 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. The iShares World Equity High Income ETF is focused primarily on high-yield and dividend growth stocks. In total, it holds 344 different businesses around the globe, from tech giants Nvidia and Microsoft to insurers like Axa, telecoms such as Deutsche Telekom and banks such as JPMorgan. However, it also earns income from safe havens like cash and US Treasuries, which provides strength during economic downturns. The fund's focused primarily on US shares. In total, these account for 67.8% of total holdings. I don't think this is overly excessive, but bear in mind that this could impact the fund's growth potential if sentiment towards US assets more broadly cools. Phoenix Group, like Legal & General and M&G, is a highly cash-generative financial services provider. And so like those other businesses, it offers one of the three highest forward dividend yields on the FTSE 100 today. In fact, Phoenix has a sound track record of beating its cash generation forecasts and providing subsequent meaty windfalls to shareholders. During 2024, total cash generation was expected at £1.4bn-£1.5bn. In the end it came in at a whopping £1.8bn! Like Target Healthcare, I believe it's well-placed to capitalise on Britain's growing older population. I'm optimistic demand for its savings and retirement products will grow steadily. On the downside, this year's predicted dividend is covered just 1.1 times by expected earnings. However, a Solvency II ratio of 172% could give it scope to meet analysts' dividend forecasts, even if this year's profits disappoint. The post £10k to invest? A UK share, investment trust and ETF to consider for an £870 second income this year 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 JPMorgan Chase is an advertising partner of Motley Fool Money. Royston Wild has positions in Legal & General Group Plc and Target Healthcare REIT Plc. The Motley Fool UK has recommended M&g Plc and Nvidia. 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
Yahoo
3 days ago
- Business
- Yahoo
These 5 shares could generate a £1,584 annual passive income from a £20k lump sum
Putting some spare money to work in the stock market can be a simple way to set up passive income streams. That can be quite lucrative. As an example, if an investor had a spare £20,000 to invest (whether or not through a Stocks and Shares ISA) they could spread it evenly across the five shares below that currently yield an average 7.9%. That ought to earn around £1,584 in passive income each year, if the dividends are maintained at their current level. That is never guaranteed: dividends can fall, but can also grow. To start with are a couple of FTSE 100 shares in the financial services business, both offering a high yield. Asset manager M&G yields 8.2% at the moment. It has a large base of both retail and institutional clients, a strong brand, and a proven business model. A recently announced tie-up with a large Japanese firm could help boost revenues. One risk I see is a turbulent stock market leading policyholders to withdraw funds, hurting profits. Whereas M&G is a well-known name for many British people, the same may not be true of Phoenix Group (LSE: PHNX). But the company is a discreet giant, with around 12m customers and a variety of well-known brands. It aims to grow its dividend per share annually and currently yields 8.3%. I like its proven cash generation potential and critical mass, though if the housing market falls badly I see a risk that its mortgage book value could fall sharply. Another share to consider is 6.8%-yielding cigarette maker British American Tobacco (LSE: BATS). The owner of premium brands including Lucky Strike has a highly profitable business that has helped it raise its dividend per share annually for decades. Whether that can continue depends in part on whether declining cigarette sales lead to lower earnings for British American. I own shares in polymer manufacturer VIctrex (LSE: VCT), which currently offers investors a 7.6% yield. I see it as a share passive income hunters ought to consider. That yield partly reflects a weaker share price than before, as Victrex has fallen 62% in five years. Profitability has been inconsistent and I see a risk that weaker demand in key markets could keep eating into earnings. Clearly, the City has its doubts about Victrex compared to a few years back. But first-half sales volumes grew 16% year on year, pre-tax profit soared to £17m and the company maintained its interim dividend. Its focus on high-performance applications like automotive and aerospace components gives Victrex pricing power and I see its proprietary polymer technology as a powerful competitive advantage. The fifth share to consider is also one I own: Income and Growth Venture Capital Trust. The investment trust has an 8.7% yield. It has typically aimed to pay at least a 6p per share annual dividend, which would mean an 8.7% yield in future too at the current share price. It funds that by investing in small or medium companies it hopes can grow. Weak consumer demand has hurt the valuation of some of its investments. I see a risk that will continue. However, I think owning a stake in Income & Growth could hopefully still generate a long-term passive income stream for me. The post These 5 shares could generate a £1,584 annual passive income from a £20k lump sum 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 C Ruane has positions in Income & Growth Vct Plc and Victrex Plc. The Motley Fool UK has recommended British American Tobacco P.l.c., M&g Plc, and Victrex 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
Al Etihad
01-06-2025
- Business
- Al Etihad
UAE stock markets report steady gains in May despite global volatility
1 June 2025 19:12 A. SREENIVASA REDDY (ABU DHABI)The UAE equity markets closed May 2025 on a positive note, with both the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) recording gains, despite volatility in global markets, according to the monthly market report from Kamco combined market capitalisation of the two bourses rose as investors gained confidence from steady earnings, increased liquidity, and sector-specific momentum. The report highlights that both exchanges remained among the more resilient performers in the GCC during the month.'Equity markets in the GCC region remained volatile during May replicating the trend in the broader global financial markets. Almost all markets in the region witnessed gains during the month, but a 5.8% decline in the TASI (Saudi index) dragged the MSCI GCC index into the red with a decline of 2.6% during the month,' Kamco Invest ADX General Index registered a monthly gain of 1.6%. The index closed at 9,685.1 points in May, bringing its year-to-date performance for 2025 to 2.8%.According to Kamco Invest: 'Sectoral performance on the exchange was evenly split, with five out of 10 sector indices registering declines, while the remaining five recorded gains.'The overall gain in the FTSE ADX General Index was driven by advances in the Energy, Financial, Real Estate, and Utilities Indices. The Energy Index posted the steepest gain, climbing 4.4%, as two out of the four constituent companies recorded share price increases, led by a 7.7% rise in ADNOC Distribution's share price during the month. The Utilities Index followed closely with a gain of 3.8%, supported by a 3.8% share price increase in its sole constituent company, Abu Dhabi National Energy Co, during terms of monthly stock performance, Presight AI led the gainers' chart for May-2025 with a substantial 32.5% increase in its share price. It was followed by Phoenix Group and Sudatel, which recorded gains of 18.4% and 15.9%, respectively. On the decliners' side, Al Wathba National Insurance Company registered the sharpest fall, with a 24.8% drop in its share price during May, followed by Insurance House Co. and United Arab Bank, which posted declines of 13.1% and 10.7%, activity on the exchange was robust but subdued during May. Total volume of shares traded declined by 8.1%, reaching 6.9 billion shares, compared to 7.6 billion shares in April. Conversely, the total value of traded shares rose by 18.2%, amounting to Dh30.6 billion in May, up from Dh25.9 billion in the previous month. ADNOC Gas topped the most active stocks by volume with 1.4 billion shares traded, followed by Multiply Group and Phoenix Group, which recorded trading volumes of 1 billion shares and 499.5 million shares, respectively. In terms of value traded, ADNOC Gas also led with Dh4.6 billion worth of shares changing hands, followed by International Holdings Company and Al Dar Properties, with traded values of Dh 4.56 billion and Dh2.8 billion, DFM General Index recorded its second consecutive monthly gain in May, rising by 3.3% to close the month at 5,480.5 points. This increase brought the index's year-to-date performance for 2025 to 6.2%.Sectoral performance was entirely positive, with all eight sector indices posting gains during the month. The Materials Index posted the steepest gain at 9.1%, followed by the Industrial Index, which advanced 6.2%. The Financial Index improved by 4.4% in May, mainly supported by double-digit gains in several key companies within the sector, including Dubai Insurance Co (+24.8%) and Naeem Investment Holding (+14.8%). Meanwhile, the Real Estate Index — the largest weighted index among the DFM indices — registered a marginal uptick of 0.1% during the month. Slight share price increases in companies such as Tecom (+1.6%) and Emaar Properties (+0.4%) contributed to the overall marginal improvement of the Real Estate Index. The Utilities Index rose by 0.8% with a 1.9% increase in the share price of DEWA helped offset a 5.0% decline in Empower and a 1.1% drop in to Bloomberg's monthly stock performance data, Amlak Finance led the list of top gainers in May with a notable 30.2% surge in its share price. It was followed by Dubai Insurance and Naeem Investment, which recorded gains of 24.8% and 14.8%, respectively. Trading activity on the exchange was mixed in May. The total volume of shares traded declined by 3.6%, reaching 4.5 billion shares compared to 4.7 billion shares in April. In contrast, the total value of shares traded rose by 17.5% to Dh 15.1 billion in May against Dh12.8 billion in April. DEWA topped the monthly trading volume chart, with 994.1 million traded shares followed by Salik and Talabat at 465.7 million and 397.4 million shares, respectively. In terms of trading value, Emaar Properties led with Dh 3.1 billion worth of shares traded, followed by DEWA and Salik at Dh 2.7 billion and Dh 2.6 billion, respectively.
Yahoo
01-06-2025
- Business
- Yahoo
This stunning dividend share yields 8.8% and is trading at a 35% discount!
Phoenix Group Holdings (LSE: PHNX) is fast turning into my favourite FTSE 100 dividend share. What took it so long? I tracked the stock for years before finally adding it to my Self-Invested Personal Pension (SIPP) in January 2024. The yield was around 10% and the valuation looked dirt cheap, trading at six or seven times earnings. I assumed something must be wrong. Maybe the dividend wasn't sustainable, and a cut was coming. But that didn't happen. So I looked deeper and discovered Phoenix had increased its dividend in eight out of the previous 10 years. The only cut was during the 2020 pandemic, and that's forgiveable. It had a strong balance sheet, was generating solid cash flow, and the board insisted that it operated 'a progressive and sustainable dividend policy'. It still says that today. The dividend still looks secure. Phoenix lifted its total 2024 payout by 2.56% to 54p per share. Analysts now forecast 56p this year, a 3.7% rise. The yield is forecast to hit 8.8% in 2025 and 9.05% in 2026 – more than double what a top savings account offers. Of course, savings are safe. Dividends aren't. The flipside is that dividend stocks have growth potential too. The Phoenix share price is up an impressive 30% over the past year. That means a total return close to 40%, including the dividend. That's impressive, but I'm not getting carried away. The stock is still trading around the same level it was five and 10 years ago. So much for past performance. What happens next? Phoenix expects to generate £1.1bn of excess cash between 2024 and 2026. Much of that will go towards paying down debt, but some will wend its way to me, via dividends. On 21 May, Citi upgraded Phoenix from Neutral to Buy, lifting its price target from 537p to 730p. That's 14.5% above today's 637p. Add the dividend, and my potential 12-month return could hit 25%. If forecasts play out, that is. In practice, they're merely educated guesses. Citi said Phoenix is changing. No longer just a back book consolidator, it's also building a bulk annuity franchise and is strengthening its retirement savings business. The broker reckons the 9% yield 'seems very well supported' and expects the shares to close their 35% valuation gap versus peers. It would be nice if that all came good. Phoenix does face risks, though. The bulk annuity market is getting crowded and rivals are more established. Insurance is a mature and competitive business, where growth doesn't come easy. Today's 8.44% yield is the third-highest on the FTSE 100. But dividend stocks still face competition from cash and bonds, which yield less but offer more safety. That may change when interest rates fall — but maybe they won't? I've enjoyed the share price growth but the yield remains the main attraction here. Phoenix may soon rebrand as Standard Life but whatever it brands itself, I'm a fan. In fact, I'm even considering buying more. The post This stunning dividend share yields 8.8% and is trading at a 35% discount! 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 Harvey Jones has positions in Phoenix Group Plc. The Motley Fool UK has no position in any of the shares mentioned. 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 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
