Cliff D'Arcy, Author at The Twelfth Magpie

Here’s why 2026 has been bumpy for the BP share price

Cliff D'Arcy — Sun, 10 May 2026 08:12:13 +0000

Despite a big plunge in spring 2025, the BP (LSE: BP) share price ended last year up just over 10% (excluding cash dividends). Not a bad annual return, but nothing to write home about. However, since the start of this year, the shares have bounced around like crazy. What’s causing this increased volatility and uncertainty for BP shareholders?

BP: beginnings in Persia

BP began life in 1909 as the Anglo-Persian Oil Company, later becoming the Anglo-Iranian Oil Company in 1935 and then the British Petroleum Company in 1954. After merging with US rival Amoco in 1998, it briefly became BP Amoco before rebranding to BP in 2000.

For decades, BP was owned by the British state and its people. In 1977, the UK started selling off its stake to private investors, including a disastrous sale to the public coinciding with the Black Monday stock-market crash of 19 October 1987. Since then, BP has been a stalwart of the UK’s elite FTSE 100 index.

What’s fascinating to me is that the share price of this global energy giant has basically gone nowhere since April 1999. On Friday (8 May) the stock closed at 535.6p, around 6% below its closing price 27 years ago. Then again, the shares have leapt 43.9% over the past year and 70.8% over five years, again excluding dividends.

BP: bouncing price

That said, BP shares have been way more volatile than usual so far this calendar year. The good news for shareholders is that the share price has jumped 23.8% in 2026, with much of this bounce coming after the US attacked Iran on 28 February.

However, the shares have jumped around from a 2026 intraday low of 413.3p to a peak of 609.4p on 31 March. That’s an unusually wide range in a little over four months. What’s the cause? Three factors — the oil price, the US/Israel-Iran war, and the pronouncements of President Donald Trump — are driving the price up and down.

With the latest Middle East war settling into an uneasy stalemate, the BP price has dropped 12.1% from its March high. Meanwhile, the oil price has dipped by only 3.4% over this timeframe. To me, this suggest that BP’s valuation may have got a bit ahead of itself in March’s buying frenzy.

BP: bigger price?

Speaking of valuation, BP’s current market value stands at £84.6bn, making it a FTSE 100 heavyweight. Rising quarterly dividend payouts have boosted this stock’s dividend yield to 4.6% a year. That’s well ahead of the wider Footsie‘s yearly cash yield of roughly 3%.

In my view, the shares look like a simple binary bet on the Iran war and the oil price. If the conflict drags on, then problems in the Strait of Hormuz could crimp global oil supply and pump up oil prices. Conversely, if the war ends swiftly or convincingly, then falling energy prices could drag down BP’s valuation.

My family portfolio holds BP shares, having paid 484.1p a share for our stake in August 2023. Given the healthy income they pay, plus their use as a hedge against rising energy bills, I will hold on tightly to this shareholding for now. Likewise, value investors could consider buying BP stock for its healthy dividends and exposure to oil and gas prices.

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The Motley Fool UK has no position in any of the shares mentioned. Cliff D’Arcy has an economic interest in BP shares. 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.

After years of pain, is the Diageo share price looking up?

Cliff D'Arcy — Fri, 08 May 2026 17:00:00 +0000

Since end-2021, the Diageo (LSE: DGE) share price has been one big hangover for the global drinks giant’s shareholders. Since the post-Covid party boom of 2021, this FTSE 100 share has fallen almost relentlessly. But could there finally be light at the end of the tunnel?

Diageo’s descent

On New Year’s Eve 2021, Diageo stock closed at 4,036p — its highest closing price. Alas, the share price has been sickly ever since. On 23 March, it hit a 52-week low of 1,350p, down two-thirds (-66.6%) from the record high.

At this point, many shareholders would have been despairing. I know, as I’m in this group. My family portfolio bought this stock for 2,806.6p a share in January 2024. When the shares bottomed out on 23 March (down 51.9% from our entry price), I was considering cutting our losses.

However, things may be finally looking up for Diageo’s owners. On Thursday, 7 May, the shares closed at 1,534.2p, valuing the group at £34.9bn. That’s 13.6% above their 2026 low, with the stock jumping after the third-quarter statement released on Wednesday, 6 May.

Turning point?

With the shares down 29.1% over one year and 53.3% over five (excluding cash dividends), Diageo’s owners are desperate for good news. Fortunately, the latest trading figures offered some glimmers of hope.

With the FIFA World Cup running from 11 June to 19 July, wholesale customers have started stocking up on booze for pubs, clubs, and bars. Group sales rose by 0.3%, far ahead of the 2.3% decline forecast for the three months to April. If this early turnaround continues, it would be a solid start for new CEO Sir Dave ‘Drastic’ Lewis.

While Latin American sales leapt by 16.2%, sales dived by 9.4% in the key US market, with spirits exceptionally weak. In contrast, European sales rose by 8.8%, with pints of popular stout Guinness leading the way.

In order to invest in growing brands and markets, Lewis announced a cut to Diageo’s dividend in late February. The turnaround specialist also plans to lower prices and bring down the group’s net debt.

Cheap shots?

Currently, Diageo shares trade on 19.6 times historic earnings and offer a trailing dividend yield of 3.9% a year. But this cash yield will drop again when the reduced final dividend is revealed. While this stock doesn’t look wildly overpriced, it’s also not an obvious bargain buy.

For me, this Footsie share appears to be a binary bet — either a recovery play or a value trap. If the world’s biggest football tournament goes well, then sales could enjoy a strong boost. Personally, I’d like to see sales and margins rebounding with costs kept firmly under control.

In summary, there’ve been no major shocks in Sir Dave Lewis’ first four months in charge. For now, I’m happy to give him a full year or more to turn this tanker around. That said, if Diageo continues to struggle, then 2026 may be my family’s last year of ownership of this once-proud British business!

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The Motley Fool UK has recommended Diageo. Cliff D’Arcy has an economic interest in Diageo shares. 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.

Will this huge deal harm the Vodafone share price?

Cliff D'Arcy — Wed, 06 May 2026 05:30:00 +0000

From end-2013 until early 2025, the Vodafone Group (LSE: VOD) share price fell almost relentlessly. Year after year, Vodafone’s owners saw their shareholdings decline steeply in value. At long last, it looks like stock in this British telecoms giant is staging a serious comeback…

Volatile Vodafone

Way back in December 2013, Vodafone shares were trading close to £3. But that marked a distant high for this popular and widely held stock, which then set off on multi-year declines.

On 9 April 2025, the Vodafone share price hit a low of 62.4p, down around 80% from its 2013 high. Repeatedly during last year, I argued that this FTSE 100 firm was undervalued, unloved, and due a valuation re-rating.

For the record, my family portfolio owns shares in Vodafone. We paid 90.2p a share for our stake in December 2022, only to watch as the price kept finding lower lows.

However, over the past year, someone lit a match under this Footsie stock, sending it soaring like a rocket. As I write on Tuesday afternoon (5 May), the share price stands at 115.85p. This values the group at £26.7bn — close to twice its April 2025 lows.

What revived this stock?

Over one year, the Vodafone share price has surged by 58.8%. That said, the shares are down 18.3% over five years — a hint of the pain suffered by long-standing shareholders. (Both figures exclude cash dividends, which have been very generous from this stock.)

For me, much of the recovery in the group’s recent fortunes can be attributed to Margherita Della Valle, who took over as permanent CEO in April 2023. Her turnaround strategy focused on selling non-core assets to raise cash. Vodafone has used these proceeds to invest in core markets, as well as buying back its own cheap shares.

Della Valle also grasped the nettle by tackling the group’s sky-high dividend yield (which reached double digits at times). In May 2024, Vodafone halved its yearly cash payout from 9 euro cents to 4.5 euro cents from 2025 onwards.

Following this extensive restructuring, in November 2025, Vodafone announced its first dividend increase in eight years — a modest 2.5% from the previously rebased level.

Big deal!

Vodafone unveiled its latest corporate move on Tuesday. The group is to pay £4.3bn to buy partner CK Hutchison’s 49% stake in their VodafoneThree joint venture. The Hong Kong-based conglomerate is raising huge sums from asset disposals in 2025/26.

This would leave Vodafone in full control of VodafoneThree, making it top dog of the UK’s three mobile-network operators. The transaction values this business at nearly £13.9bn — more than half of Vodafone’s current market capitalisation. The deal is set to be completed in the second half of this year.

It’s good to see Vodafone’s ship finally settling after years of sailing rough seas. I’m hopeful that this latest deal will prove positive for shareholders. If I’m right, then the share price could shoot past the 120.95p high hit on 18 February, before the US-Iran war sent stock markets tumbling.

For now, I’m happy to sit back and keep hold of our Vodafone stock, banking the near-3.4% yearly dividend yield while we wait. Plus there’s under a week before the half-year results on 12 May!

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The Motley Fool UK has recommended Vodafone Group. Cliff D’Arcy has an economic interest in Vodafone Group shares. 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.

Down 36% in 5 years, will the Greggs share price ever recover?

Cliff D'Arcy — Thu, 30 Apr 2026 17:30:00 +0000

What a tough five years it’s been for the Greggs (LSE: GRG) share price. Having hit record highs at the end of 2021, this FTSE 250 stock has crashed hard since. Meanwhile, the rest of the London stock market is scaling new peaks. So what went wrong for Greggs and its shareholders?

Greggs does great

Greggs the Baker was founded by John Gregg in Newcastle upon Tyne in 1939. After the first shop opened in Gosforth in 1951, the bakery chain expanded rapidly. Today, Greggs is one of the UK’s leading ‘food-to-go’ chains with over 2,600 outlets nationwide. For instance, even though I live in a tiny city in Hampshire, there are three Greggs shops in my area.

Greggs sells a wide range of savoury foods (including its famous sausage rolls, steak bakes, and vegan sausage rolls), as well as sandwiches and hot and cold drinks. When I’m travelling in the UK, I often prefer the fast, affordable, and fresh food on offer at Greggs to its more expensive rivals. And being from the North East myself, I’m delighted to support this Geordie business.

Greggs shares floated on the London stock market in April 1984. Back then, the business had 260 shops and was valued at £15m. At its all-time high, the share price peaked at 3,443p on 31 December 2021, with the business worth nearly £3.5bn. In 2022, new CEO Roisin Currie took over and, alas, it’s been steeply downhill ever since.

Shares slump

As I write, this stock stands at 1,512.5p, valuing the group at just over £1.5bn. This leaves the share price down a shocking 56.1% from its end-2021 peak. In fairness, the shares went ex-dividend for 50p a share on Thursday, 30 April, which explains today’s 2.9% price decline.

For the record, my family portfolio owns Greggs stock, paying 1,696.7p a share for our stake last July. To date, we are sitting on a paper loss of 10.9%, but this excludes dividends. And as shareholders, we will receive the above 50p-a-share dividend on 29 May. Instead of spending this cash, we will use it to buy more Greggs shares. This boosts our shareholding and also our future returns.

As for Greggs’ troubles, four issues are out of its control. First, the cost-of-living crisis keeps pushing up input costs, forcing it to lift prices. Second, the growing use of GLP-1 diet drugs are slowing its sales. Third, higher employer National Insurance contributions are curbing profits. Fourth, adverse weather conditions were a problem in 2025.

Recovery play?

For me, Greggs shares look undervalued and unloved today. The stock trades on 12.7 times trailing earnings, delivering an earnings yield nearing 7.9%. Thus, their generous dividend yield of almost 4.6% a year is covered 1.7 times by historic earnings.

Of course, this FTSE 250 stock could turn out to be a value trap, rather than a recovery play. But I see the odds tilted towards the former — especially as the group’s ambitious store roll-out continues and if/when sales growth strengthens. Hence, I am happy to sit tight and await the next trading update on 12 May!

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The Motley Fool UK has recommended Greggs. Cliff D’Arcy has an economic interest in Greggs shares. 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.

Prediction: this FTSE 250 10% dividend yield is doomed!

Cliff D'Arcy — Wed, 29 Apr 2026 05:30:00 +0000

As an old-school value and income investor, I love buying and owning shares that offer generous dividend yields. However, as a veteran with almost four decades in financial markets, I’m wary of ultra-high (double-digit) cash yields. And I’ve spotted one in the mid-cap FTSE 250 index that looks at risk. Read on to find out which…

Dividend distress

For those unfamiliar with the term, dividends are cash payouts made by some companies to their owners (shareholders). However, not all listed businesses pay dividends. Some companies make losses and therefore lack spare cash to distribute. Other firms prefer to reinvest their current profits to stimulate future growth.

Another problem is that future dividends are not guaranteed. During times of trouble, they can be cut or cancelled at short notice. Indeed, this happened repeatedly during the Covid-19 pandemic of 2020/21.

Though most member companies of the elite FTSE 100 index do pay dividends, that’s not the case in the FTSE 250. Nevertheless, my family portfolio is packed with dividend-paying stocks from both indexes. What’s more, I’m always looking out for new dividend dynamos to add to our existing holdings.

Taylor made?

Shares in British housebuilder Taylor Wimpey (LSE: TW.) offer one of the FTSE 350’s highest dividend yields. Yet I can’t help thinking that this flood of cash might slow to a trickle.

As I write, Taylor Wimpey shares trade at 78.9p, valuing this group at under £2.8bn. That’s pretty big for the FTSE 250, but nowhere near big enough to join the FTSE 100. And on Tuesday (28 April), the share price plunged as low as 78.45p — levels not seen since early 2013 (13 years ago). Yikes.

At these lowly levels, this stock offered a trailing dividend yield nearing 9.7% a year. At first glance, this seems like a rich reward for buying and patiently holding these shares, but this juicy payout is unlikely to continue.

Tough times

In a trading statement released yesterday, Taylor Wimpey reported lower weekly sales of new homes, plus an order book 5% lower at £2.2bn. Also, the US-Iran war is likely to push up building costs later this year, further crimping Taylor Wimpey’s profit margins.

The final dividend has just been cut from 4.66p in 2025 to 2.95p in 2026. With this saving, the company will buy back more of its own shares. Perhaps not a bad idea, given their lowly rating? The firm may also reduce its interim dividend for this financial year, slashing that near-10% yearly yield to something more affordable.

I’ve debated buying Taylor Wimpey shares many times in 2025/26. I’m glad I held off, as this stock is down 9.7% over one month and 27% over six months. It’s also plunged 32.7% over one year and crashed 55.9% over five years. (All returns exclude dividends.)

For me, this episode confirms one market lesson I know only too well from experience. Market-beating dividend yields can sometimes be horribly undermined by steep share-price falls. That’s why I tend to avoid stocks with stagnating or unsustainable dividend payouts. In short, what I gain in one hand, I can sometimes lose from the other!

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The Motley Fool UK has no position in any of the shares mentioned. Cliff D'Arcy 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.

Anyone can claim a share of this £98bn of passive income!

Cliff D'Arcy — Tue, 28 Apr 2026 05:30:00 +0000

Since the end of February, global stock markets have bounced around wildly. Before the US attacked Iran on 27 February, share prices were hitting new highs. In March, there were steep falls. However, stock markets rebounded this month. Meanwhile, for lovers of passive income (including me), the cash keeps flowing strongly.

Delicious dividends

There are many ways to earn passive income outside of work. These include renting out property, earning savings interest, collecting coupons (interest) from bonds, plus state and other pensions.

Fearing the hassle of being a buy-to-let landlord, I’ve never owned investment properties. Likewise, I know no-one who got rich purely from sitting on cash. (This reminds me of a Russian proverb, “Those who take no risks, drink no Champagne.”)

For me, dividends are the easiest form of ‘free money’. These regular (or one-off) cash payments are paid by some companies to their shareholder owners. Alas, most London-listed businesses don’t pay dividends.

Also, future dividends are not guaranteed, so they can be cut or cancelled at short notice. This happened often during 2020/21’s Covid-19 crisis. Then again, the London stock market’s dividends are rising and could hit a record high this year, beating 2018’s total.

£98bn for the taking

According to estimates, members of the FTSE 100 index could pay dividends totalling £88bn in 2026. Another £10bn might come from other members of the wider FTSE All-Share index. In short, millions of investors in UK shares will claim their share of this £98bn of passive income.

Currently, this huge sum works out to 3.5% of the FTSE All Share’s market valuation of £2.8trn. That’s one of the highest cash yields on offer from major stock markets. This is why my family portfolio is packed with income-generating FTSE 100 and FTSE 250 stocks.

The simplest, cheapest way for investors to collect this passive income — plus capital gains as share prices rise — is to invest in a low-cost index tracker. The cheapest FTSE All Share-tracking funds charge fees of just 0.06% a year. That’s just 6p per £100 — far less than active and managed funds typically charge (and these managers usually underperform their benchmarks).

A 9.1% yield

One FTSE 250 share always crops up in my high-dividend search: Taylor Wimpey (LSE: TW). This British housebuilder’s sales have suffered since interest rates rose steeply in 2022/23. Furthermore, its key rivals have slashed their dividend payments and are buying less land to develop.

On Friday, 24 April, Taylor Wimpey shares closed at 83.98p, valuing the group at under £3bn. That’s just 1.9% above the 52-week low recorded earlier that day. This stock has dived 27.1% over one year and crashed 53.6% over five years (excluding dividends).

After these price falls, this FTSE 250 share offers a tempting dividend yield of nearly 9.1% a year. That’s triple the FTSE 100’s cash yield of 3% a year. Yet, I worry that Taylor Wimpey, like its competitors, might decide to cut this cash payout. After all, current profits do not cover this outflow, forcing the firm to dip into its cash reserve of £350m.

For now, this stock will not join my buy list. Indeed, if the UK housing market weakens in 2026/27, things could get worse for Taylor Wimpey and its cohort. Who knows, I might even steer clear until falling interest rates inject new life into property prices!

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After crashing 29%, Barclays shares are booming again!

Cliff D'Arcy — Mon, 27 Apr 2026 05:30:00 +0000

What a year it’s been so far for global stock markets. The first two months of 2026 were pretty smooth sailing, with share prices rising to new heights worldwide. But the then US attacked Iran on 27 February and stocks plunged. At its low, the US S&P 500 index lost 9.4% of its value in a month. However, here in the UK, Barclays (LSE: BARC) shares fared much worse.

Barclays gets battered

At their 2026 high, Barclays shares peaked at 506.4p on 4 February. That was the first time they’d breached the £5 mark since end-2007, before the global financial crisis of 2007-09 crashed banking (and other) stocks.

After a steep, swift, and sudden slide, the Barclays share price hit its 2026 intraday low of 361.35p on 23 March. At that point, the shares had lost 28.6% of their value in under two months.

By the way, my family portfolio owns Barclays stock, having paid 154.2p a share for our stake in mid-2022. And as a shareholder, I was struggling to see how the Blue Eagle bank’s stock had slumped so far in so little time. On 18 March, I wrote arguing that the bank’s shares — then 390.65p — were back in the stock market’s bargain bin.

Booming Barclays

Thus far, it seems my call was right. As I write (24 April), Barclays shares trade at 420.8p, valuing the bank at £58.1bn. This ranks the group at #13 among the elite FTSE 100 index.

Currently, the shares trade on nearly 10 times historic earnings, producing an earnings yield of 10.1%. This means that their dividend yield of 2% a year is covered a very healthy five times by trailing earnings.

As things stand, this Footsie firm’s shares no longer look cheap to me. I originally bought them for their market-beating cash yield, which has since fallen steeply as the share price climbed. Would I buy Barclays stock today? No, but I also have no intention of selling our existing holding.

That said, I expect Barclays to generate powerful profits in 2026. Thanks to this latest sharp spike in energy prices, UK inflation is rising. This leaves the Bank of England with little to no scope to lower its base rate anytime soon. This means that banks’ NIMs (net interest margins — the spreads between borrowing and savings rates) will remain high.

Furthermore, with leading positions in home loans, business lending, and credit cards, Barclays will benefit big-time from UK interest rates staying higher for longer.

What could derail this money train? Risks include a weaker property market, falling demand for credit, and rising loan losses/bad debts. These could hit revenues, earnings, and cash flows at Barclays and other British banks. Even so, I’m holding on tight and hoping for even juicier returns from our Barclays shares.

What other stocks are moving markets and making money for investors? Find out more below!

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The Motley Fool UK has recommended Barclays. Cliff D’Arcy has an economic interest in Barclays shares. 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.

I was right about the Vodafone share price! Next stop 125p?

Cliff D'Arcy — Thu, 23 Apr 2026 05:30:00 +0000

After a strong start to 2026, the FTSE 100 index peaked on 27 February. Then the US attacked Iran the next day, sending share prices plunging. At its 23 March low, the Footsie had lost 11.6% of its value in four weeks, before rebounding. Yet some FTSE 100 stocks have done much better in 2026, including the Vodafone Group (LSE: VOD) share price.

The FTSE 100 is up 6.3% in 2026, but Vodafone shares have easily beaten the index. Indeed, they’re at levels not seen since August 2023. What’s going well for this British telecoms provider?

Value in Vodafone

The Vodafone share price has surged from its 52-week low, after it slumped to 67.8p on 14 May 2025. Back then, Vodafone seemed an obvious recovery play to me, instead of the value trap it’s been for years. Nevertheless, I didn’t buy, because my family portfolio had already purchased this stock at 90.2p a share in December 2022.

Since 2022, Vodafone shares have been much weaker and more volatile than I’d hoped. As I write, they now stand at 114.49p, valuing this FTSE 100 firm at £26.5bn. This leaves the stock up a healthy 58.6% over one year. However, the shares have lost 14.3% of their value over five years. All the above returns exclude cash dividends — previously very generous from Vodafone.

As shareholders, my family is sitting on a paper profit of 26.9% to date. However, reinvesting our chunky dividends into buying more shares has increased our shareholding, boosting our future returns.

Turning the tanker around

In May 2024, the company announced that it would halve its yearly dividend from 2025 onwards. This slashed the payout per share from €0.09 (nine euro cents) to €0.045. This was a bitter blow for income investors holding the stock (including me).

Also, Vodafone CEO Margherita Della Valle has been selling non-core assets to raise cash. Della Valle has used this cash pile to reduce the group’s net debt, which stood at €25.9bn (£22.6bn) at end-September 2025. She has also accelerated Vodafone’s share buybacks, with €3.5bn of stock repurchased since May 2024.

What next?

On 30 December 2025, I predicted the Vodafone share price would exceed £1 ‘very soon’. My forecast soon proved correct, as the shares closed at 100.5p on 6 January. The stock has continued rising since Vodafone released its third-quarter trading update on 5 February.

What if this business keeps using its strong cash flows to pay down debt, buy back shares, and invest in growth markets? Then I suspect the shares could pass the 125p mark in 2026. Then again, that’s only 9.2% up from here, so I’m hardly sticking my neck out.

That said, what might derail Vodafone’s recent progress? I worry about growth slowing in its two key markets: Europe (112m customers) and Africa (165m customers). In particular, any setbacks in Germany (its biggest market) and the UK could hit revenues and earnings.

Finally, Vodafone’s much-reduced dividend yield now stands at 3.4% a year, but this still beats the FTSE 100’s 3% a year. Hence, I will hold tightly onto our holding, while awaiting the full-year results on 26 May!

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Will this huge deal harm the Vodafone share price?

Here are the secrets behind the FTSE 100’s success!

Cliff D'Arcy — Thu, 23 Apr 2026 05:30:00 +0000

The FTSE 100 is London’s leading stock market index. It includes 100 of the largest UK-listed companies, with this list rebalancing every quarter. Many of these companies are household names with markets spanning the globe. Together, these Footsie firms are worth over £2.4trn, with their individual market values ranging from £3.2bn to £232.8bn.

Read on to learn two hidden secrets behind the FTSE 100’s triumph!

Fabulous FTSE

The FTSE 100 (FTSE is short for Financial Times Stock Exchange) — launched in January 1984, priced at 1,000 points. It began actively trading in April 1984, shortly after my 16th birthday. I remember the fanfare at the time as TV stations and newspapers celebrated this financial leap forward.

As I write, the index stands at 10,497.30 points — around 10.5 times its starting level in 42 years. That works out to a compound growth rate of nearly 5.8% a year. To me, this hardly seems a decent return for the risks of investing in volatile shares. However, there’s something important missing from this analysis.

Delicious dividends

Dividends are cash payments — usually regular, but sometimes one-offs — paid by companies to their shareholder owners. While most listed businesses don’t pay dividends, almost all FTSE 100 firms do. However, future dividends are not guaranteed, so they can be cut or cancelled. This happened often during the Covid-19 crisis of 2020/21 (the pandemic now seems like a fever dream to me!).

This year, Footsie companies are expected to pay out £88bn in dividends. I’m a huge fan of this ‘free money’, so my family portfolio owns at least 25 FTSE 100 and FTSE 250 shares.

During times of crisis and major stock market crashes, the Footsie’s dividend yield has surged as high as 8% a year. Currently, after strong gains for the index, this cash yield is around 3% a year. As an added bonus, many companies keep raising their dividends year after year.

Buyback boost

Another boost for FTSE 100 investors comes from share buybacks, when companies use their cash reserves to purchase (and usually cancel) their own shares. This reduces their share bases, lifting future returns for patient shareholders.

A dividend dynamo

For example, my family owns shares in Standard Life (LSE: SDLF) — formerly Phoenix Group Holdings — largely for their juicy dividend yield. Standard Life is Britain’s leading provider of long-term savings and investment plans. It also buys and then runs off investment and pension funds from other firms.

The UK pension-transfer market is booming, boosting Standard Life’s share price close to all-time highs. As I write, it stands at 776.2p, valuing this retirement specialist at £7.8bn. The shares are up 33.5% over one year, but only 7.4% over five years (excluding dividends).

My family paid 544.4p a share for our stake in August 2023, so we are sitting on a paper profit of 42.6%. However, by reinvesting all our dividends to date, our achieved return is considerably higher.

Finally, Standard Life just agreed to buy rival Aegon UK for £2bn in cash and shares, gaining 3.7m customers. If this deal goes bad, then it could harm the group’s future revenues, earnings, and cash flows. Even so, I hope to keep banking these delightful dividends!

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The Motley Fool UK has no position in any of the shares mentioned. Cliff D’Arcy has an economic interest in Standard Life shares. 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.

More oil wobbles as the BP share price dives 7% in a day!

Cliff D'Arcy — Tue, 21 Apr 2026 18:00:00 +0000

After the US attacked Iran on Saturday, 27 March, global stock markets started tumbling from 2026’s highs. This latest war in the Middle East triggered another oil shock, with energy prices surging worldwide. However, as oil prices soared, so too did the BP (LSE: BP) share price. Alas, it’s not always been plain sailing for BP shareholders.

BP stock gushes

At its 52-week low, BP stock hit 337.65p on 1 May 2025. This would have been an excellent time to buy into the British oil & gas supermajor, with its shares spurting higher since.

On Friday, 17 April, the BP share price closed at 541p, valuing the former British Petroleum at £91.9bn. This makes BP the ninth-largest company in the FTSE 100 index. However, the shares plunged by 43p (-7.4%) on Friday, tracking the oil price south as geopolitical tensions eased.

Despite this, BP stock is up 50.5% over one year and 85.2% over five — easily beating the Footsie over both periods. What’s more, the above figures all exclude cash dividends, which gush freely from BP’s coffers to shareholders’ bank accounts.

BP: big payouts

Disclosure: my family portfolio owns BP stock, having paid 484.1p a share for our stake in August 2023. What made us decide to buy into Britain’s second-biggest energy firm? First, we bought BP shares partly as a hedge against higher oil prices. Second, to collect a share of BP’s gushing dividends.

After this latest sudden slide in the BP share price, the stock offers a market-beating dividend yield of 4.5% a year. This is 50% higher than the 3% a year on offer from the wider FTSE 100.

Moreover, we don’t spend our quarterly BP dividends. Instead, we reinvest this passive income by buying yet more shares. This increases our shareholding, helping to raise our future returns as BP owners.

BP: bumpy periods

Then again, the past five years have sometimes seen rough rides for BP shareholders. The five-year share chart resembles the teeth of a saw, with the price rising and then falling back, only to climb steeply over the past 12 months.

To be honest, I’m not particularly happy after 32 months as BP shareholders. To date, we are sitting on a small paper profit of 11.8% of our initial investment. That’s not a great return for taking the risk of investing in a fossil fuel business. That said, patiently reinvesting our dividends for nearly three years has boosted our returns.

In summary, buying BP shares has largely done what I anticipated. It has delivered market-beating income, while providing a useful hedge against higher energy bills. Nevertheless, this stock has been much more volatile than I’d hoped, as the oil price has bounced up and down since mid-2023.

Finally, I expect energy stocks to remain highly volatile until a lasting truce emerges in the US/Israel-Iran war. If a permanent ceasefire is agreed, then oil prices — and the BP share price — could sink once again. Furthermore, BP still faces the ultimate challenge of moving away from fossil fuels to renewable energy, which will be no easy task!

The post More oil wobbles as the BP share price dives 7% in a day! appeared first on The Twelfth Magpie.

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