Whether we’re talking about an impending stock market crash or something less dramatic, it’s clear some of us feel that share prices are looking a bit frothy.

Last week, Sarah Breeden, deputy governor for the Bank of England (BoE), said the quiet part out loud: “There’s a lot of risk out there and yet asset prices are at all-time highs. We expect there will be an adjustment at some point.“

As a Fool, this is actually music to my ears. Let me explain why.

A market crash is just what I want

Like you, I’m trying to grow my wealth. Since holding cash in a savings account is a recipe for disaster, due to the eroding effects of inflation, I’ve turned to the stock market.

One way of potentially turbocharging performance in the latter is to buy individual company stocks when other investors are selling. By doing so, I can ride to the eventual recovery when people realise we’re not actually going to hell in a handcart.

This is why I believe a stock market crash or some “adjustment” is just the sort of thing any long-term investor should hope for.

Of course, this isn’t to say that going against the grain’s easy. News headlines full of doom and gloom always have the potential to make us think we’re making a grave error.

But we also know that – to date – the market has always rallied. And if it doesn’t, we’ll probably have more important things to think about than how our portfolios are faring.

When will this opportunity arise?

Working with uncertainty

I’ll save you some time. No one person or organisation — including the BoE — knows when the proverbial will hit the fan. That’s just the nature of the stock market. The long-term rewards have been wonderful. But the path there has always been unpredictable.

This is why I keep a list of brilliant stocks I’d like to buy if they suddenly dropped in price. To paraphrase billionaire investment legend Warren Buffett, what could be better than buying “quality merchandise when it’s marked down“?

Personally, I like businesses with strong economic moats – things that separate them from the competition – and those that generate sky-high margins. Having a robust balance sheet with minimal (if any) debt can also help when navigating choppy economic waters.

One example of this has to be fantasy figurine maker Games Workshop (LSE: GAW). Thanks to global expansion, huge IP growth and fan loyalty, the FTSE 100 member has been one of the UK success stories over the last decade.

Will I get my chance?

Just how long this momentum will last is open to debate. The fact that inflation’s creeping up again means that even the most dedicated hobbyist may need to cut back on their purchases. The current price-to-earnings (P/E) ratio of 34 also implies that investors’ expectations are already very high. And what do we know can happen when hopes begin to surpass reality?

If – for whatever reason – that price were to (temporarily) tank however, I’d be backing up the truck.

Sure, past performance is no guide to the future. Even so, we can see that previous periods of volatility at Games Workshop have proven to be wonderful buying opportunities.

I’m hoping to get another soon.

The post If a stock market crash is coming, this is the FTSE share I want to buy appeared first on The Twelfth Magpie.

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• Is your Cash ISA stopping you from becoming a millionaire?
• This surging FTSE 100 share just hit £201! Will it ever split its stock? 
• Why NOW could be the best time to find stocks to buy!

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Games Workshop Group 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.

One very popular method among investors, including the great Warren Buffett, is to look for and buy value stocks. These are companies that are, for a variety of reasons, trading on low valuations relative to their fundamentals.

Looking around, I can see a few of potential opportunities to consider in the UK market.

Turnaround candidate?

Broadcaster ITV (LSE: ITV) is arguably one example. Based on analyst projections, its shares currently change hands at a price-to-earnings (P/E) ratio of just under 10.

The trouble is that the performance of the share price over the long term leaves a lot to be desired. Anyone picking up the stock five years ago will have endured a 33% fall. Sure, dividends received over this period would have soothed the paper loss to some extent. But this is akin to treading water. It’s not a recipe for getting rich.

Can long-standing CEO Carolyn Mccall and her team turn things around? The sheer amount of competition ITV faces along with the structural decline in TV advertising suggests it will be tough. But more growth in its Studios division would certainly do no harm. I also wouldn’t rule out a takeover bid or two.

In the meantime, the stock offers a forecast yield of 6.3%.

Huge dividend yield

Price comparison websites provider MONY Group (LSE: MONY) is a second mid-cap value stock that catches the eye and may be worth further research. Like the broadcaster, its share price has been going down for some time now. We’re talking about a 14% fall in the last 12 months.

A lot of this seems to be fuelled by concerns over the £900m cap’s ability to grow. Yes, revenue is ticking up but this is not the sort of momentum that’s going to get investors busting a gut to buy. The large number of share sales by directors in March doesn’t bode well either.

All that said, MONY trades on a P/E of nine. That looks remarkably cheap considering the above-average margins it consistently posts. The launch of a new MoneySuperMarket Chat GPT app also shows how it’s leveraging artificial intelligence (AI) to enhance services for customers.

The passive income is worth mentioning too. At a chunky 7.6%, the forecast yield is over double that of the FTSE 250.

How cheap?

By contrast to the previous two stocks, JD Sports Fashion (LSE: JD) pays relatively little in dividends. So there won’t be much in the way of compensation for buyers if the shares keep falling in value. They’re already down nearly 20% in 2026 alone!

The outlook isn’t great either. With inflation on the rise due to the conflict between Iran and the US, it’s likely that shoppers will be looking to cut back (again) on discretionary purchases.

But I still think there’s a lot to like. JD’s ongoing growth strategy in the US is progressing well and now accounts for a significant amount of total revenue. The forthcoming footfball World Cup could also provide a boost to earnings (even during tough times) thanks to long-standing partnerships with key brands such as Nike and Adidas.

To cap things off, it’s also the cheapest of the three. The P/E here’s a little less than six! If/when sentiment improves, those brave enough to think about investing now could be rewarded.

The post P/E ratios of less than 10. Are these 3 FTSE value shares hot enough to consider buying now? appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV, Mony Group Plc, and Nike. 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.

Rio Tinto (LSE: RIO) shares have been ‘top of the stocks’ among AJ Bell investors this week.

But what’s behind this popularity? And will it continue?

Outperformer

To be clear, the mining colossus has been in favour for some time. Anyone buying at the 52-week low set back in late June 2025 will now be looking at a gain of about 80%!

Even those who only bought at the beginning of the year will probably be popping a few champagne corks.

As things stand, the £120bn-cap is walloping the index return. We’re talking about a gain of almost 24% compared to the top tier’s rise of 5%. This is before we’ve even taken into account the near-192p per share dividend received by holders exactly one week ago (16 April).

Although there’s no guarantee this will carry on, it clearly shows that Foolish investors have the ability to 1) beat the market and 2) don’t need to go fishing among highly-volatile penny stocks to do so.

What’s going on with Rio Tinto shares?

This wonderful momentum can partly be attributed to a lovely rise in the copper price. The red metal is a key part of the company’s portfolio and the recent growth in production has reduced Rio’s reliance on iron ore somewhat.

The numbers have also been encouraging. Back in February, the Anglo-Australian firm reported a 7% rise in revenue to $57.6bn. Underlying profit rose 9% to $25.4bn.

It’s not all been plain-sailing though. The outbreak of war between Iran and US back in March hit share prices across the board, including that of Rio Tinto. While we’ve seen a solid rebound in April, this does show how exposed the company is to geopolitical tensions and subsequent economic concerns.

The miner’s income credentials can also be questioned. The total dividend has been up and down over the years. Still, it could be argued that this is to be expected when investing in a company that has absolutely no say over the price of what it digs up. Moreover, the current forecast yield of 4.8% is more than would be received from a FTSE 100 tracker fund (roughly 3%).

At the time of writing, this year’s dividend also looks like it will be covered by expected profit. So there should be no need for managment to dip into cash reserves to fund it.

Still time to buy?

I’ve been bullish on Rio Tinto shares for some time now. Yes, the time to really load up was last year. But I still think they’re worth considering today, albeit within a diversified portfolio. A forecast price-to-earnings (P/E) ratio of 12 doesn’t feel excessive relative to the rest of the UK market. It’s also pretty reasonable (athough not cheap) among companies in the basic materials space.

But the biggest argument in favour of holding a slice of Rio surely has to be the long-term outlook. While share price movement in the near-term is hard to call, the company’s clearly looking towards the future and planning for the huge demand in metals to support the green energy revolution and ongoing rise of AI. This will include building one of the world’s largest copper mines in Arizona.

Bar any unforeseen disasters, recent gains might be just the start.

The post Why is everyone buying Rio Tinto shares? appeared first on The Twelfth Magpie.

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• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Aj Bell 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.

Taylor Wimpey (LSE: TW) shares have been in terrible form for a while. Anyone who bought 12 months ago and kept the faith would be looking at a paper loss of over 20%. Those who loaded up five years ago will have seen their stake more than halve in value.

Based on this performance, I’m not surprised if new investors are reluctant to get involved. But are we getting to a point where they might be considered a bargain?

Serious headwinds

It’s not an accident that the UK housebuilder is out of favour with the market. The last five years haven’t exactly been plain-sailing for our economy. We’ve gone from the shock of the pandemic to a cost-of-living crisis to concerns over armed conflict in Europe and the Middle East. All of these developments had or are having an impact on interest rates, building costs and, ultimately, buyer appetite.

Recent results don’t exactly inspire confidence. Back in March, the £3bn cap forecast lower profit for 2026. Somewhere in the region of £400m is now expected. This is down from the £420.6m delivered in 2025.

Of course, this was just an estimate at the time. But I’m not sure the firm’s outlook has improved since. A swift end to the Iran-US conflict looks increasingly unlikely, meaning that oil and energy prices are likely to remain high. This hardly bodes well for the next trading statement, due on 28 April. It might also help to explain why the High Wycombe-based business is proving fairly popular among short sellers.

But is it absurd to even contemplate adding it to a stock market shopping list?

It’s not all bad

I’m not so sure. As things stand, Taylor Wimpey shares change hands at a price-to-earnings (P/E) ratio of 11. That’s not dirt cheap but nor does it imply that the market is ignoring recent events. Rival Persimmon trades on a similar valuation. Barratt Redrow is very slightly less expensive.

The forecast dividend yield of 8.8% further sweetens the investment case. For comparison, the FTSE 250 index in which the company features yields 3.3%.

Yes, those cash distributions are never nailed on and signs of a further deterioration in trading could force CEO Jennie Daly to make another cut. Right now, it’s anticipated that the total dividend will barely be covered by anticipated profit.

Cut or not, whatever is received could still be regarded as sufficient compensation for being asked to wait for a recovery. Moreover, Taylor Wimpey doesn’t look financially stressed as things stand. It’s balance sheet still boasted a net cash position at the end of the last financial year.

Taylor Wimpey shares are worth considering

Things have been torrid for holders and, barring news of a proper peace deal, could stay that way. However, the long-term tailwinds remain in place. Put simply, the UK requires more quality homes to be built. As one of the biggest players, I struggle to believe this company won’t play a role in meeting that demand.

My view is that this is a business that’s under pressure; but it’s not broken. The best time to ponder buying a cyclical stock is surely when the economic chips are down. As such, I reckon the shares are worthy of a closer look.

The post Are Taylor Wimpey shares just too cheap to ignore? appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
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• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Barratt Redrow and Persimmon 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.

Since the beginning of the fiscal year (6 April), I’ve been looking for stocks to buy with my new ISA allowance, specifically those that pay me a healthy dollop of passive income just for owning them.

For a giggle, I decided to see what ideas ChatGPT could offer.

The usual suspects

Rightly recognising that there’s no such thing as a perfect stock, the AI bot actually highlighted five potential options. The first four read like a who’s who of income shares:

• M&G
• Aviva
• British American Tobacco
• BP

All of the above feature in the FTSE 100; all currently offer above-average dividend yields, with the lowest being 4.6% (BP). However, ChatGPT’s fifth suggestion — insurer and asset manager Legal & General (LSE: LGEN) — was also the one it labelled as the best UK dividend share overall.

This isn’t just a high-yielding stock. At 8.2%, it’s the highest-yielding stock in the index. Moreover, this is a company with a great record of raising the amount of cash it returns every year.

What’s not to like?

All income, no growth

Well, my grumble with Legal & General is that the shares have technically gone nowhere for ages.

Sure, there’s been volatility along the way. But any owners logging in to view their portfolio for the first time since April 2021 won’t have seen much change at all in what their stake’s worth. In sharp contrast, many top-tier stocks are up massively in value.

Now, I could argue that this might not matter to the average income seeker. That person may simply be looking for a way to supplement their pension and/or help pay for a few expenses.

But that’s my concern in a nutshell. The fact that this stock has performed poorly in recent times has put a lot of pressure on that passive income to pick up the slack. And we know that dividends can never be guaranteed.

Like others in this space, the £15bn-cap is very sensitive to economic shocks and interest rate speculation. After all, any fall in market sentiment could impact the money it makes in fees. For evidence of this, check out what happened to the share price in March when the US/Iran war kicked off.

It’s also worth noting that Legal & General’s total dividend hasn’t been covered by profit over the last few years. Topping it up from reserves can only carry on for so long.

Worryingly, the AI bot failed to mention any of this in its response. This goes some way to showing why I never blindly rely on ChatGPT (or any alternative) to pick stocks for me.

Better times ahead for this passive income powerhouse?

As part of a diversified portfolio, I reckon Legal & General shares warrant attention. However, I’d like to see a bit of mojo in its share price before long to complement that magnificent income stream. While it may have paid less in dividends, a simple FTSE 100 tracker would have outperformed the financial services provider in the last five years, assuming that money had been reinvested.

Whether and when that spark arrives is anyone’s guess. But on an optimistic note, further growth overseas combined with the massive structural tailwind that is an ageing population could see more investors taking an interest.

The post I asked ChatGPT for the best stock to buy in my ISA for passive income. Here’s what it said… appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco P.l.c. and M&g 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.

Despite markets treading water in the wake of the US/Iran stand-off, a small number of UK stocks keep setting record highs.

Is this a sign for investors to consider buying more? Or is now the time to be cautious? Let’s look at two examples.

Top performer

Fantasy figurine maker Games Workshop (LSE: GAW) has been one of the best investments of the last decade. Had anyone put £5,000 to work in the stock in April 2016, they’d now be sitting on a stake worth over £200,000! And that’s not even factoring dividends into the mix.

Yes, there’s been a bit of volatility along the way. The shares pretty much halved in value as inflation raged in 2022 following the pandemic. But investors quickly returned, lured by a great growth story and astonishing fundamentals.

In January this year, the company dropped another excellent set of half-year numbers. Revenue rose 10.9% while core operating profit hit £126.1m.

Is it now too expensive?

The only issue with all this is that the shares are now very expensive. To some extent, this is justified considering how big its margins are. Boasting a lovely amount of net cash, the balance sheet is a thing of beauty too.

Tellingly, there’s also been a lot of director buying over the years. If those most aware of how the company is faring are willing to put their own money to work, that’s usually a very good sign.

Even so, a price-to-earnings (P/E) ratio of 35 for the current financial year is looking a bit frothy. The risk here is that expectations will exceed reality and any slight disappointment — such as earnings meeting rather than exceeding forecasts — will lead to a sell-off.

This is a brilliant business that commands huge loyalty from fans. But I wonder if the best time to load up is when markets next crash. No one knows when this will come, of course. But we can be pretty sure there will be opportunities ahead.

Record numbers

IG Group (LSE: IGG) has been another winner for investors, albeit not to the same extent. It’s climbed 45% in value in the last 12 months alone and also sits at an all-time high.

This is all pretty impressive considering the company has traditionally had more appeal for income investors than those looking for share price growth.

IG’s surge isn’t a mystery. Back in March, it posted record annual revenue. The launch of a strategic review that could include acquisitions and industry tie-ups also got investors excited.

Apples and oranges?

But there are a few notable differences. While Games Workshop is dominant in its niche, the £5bn cap operates in very competitive space. IG Group often faces regulatory pressure but Games Workshop is devoid of such scrutiny.

This partly explains why shares in the online trading platform provider change hands at a P/E of 13. That’s a lot cheaper than the aforementioned FTSE 100 stock, even though it boasts similarly great margins.

Still, there’s no reason why IG Group can’t continue ascending. Momentum is a powerful force in investing. Importantly, IG also makes more money when markets get jittery than when all feels rosy, potentially giving owners a nice hedge.

Of the two, I think this one warrants more consideration.

The post Investors can’t stop buying these UK shares appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Games Workshop Group 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.

GSK (LSE: GSK) shares have become popular recently, rising over 16% in 2026 so far (and 59% in the last 12 months). Not only is this a far better return than the FTSE 100 as a whole, it also represents a shift in sentiment for a company that’s arguably been unloved for a over a decade.

But what’s behind this momentum? And is there more to come?

What’s going on with GSK shares?

I don’t think GSK’s purple patch of form is down to one thing. But let’s begin with good, old-fashioned earnings.

Full-year results for 2025 beat expectations. Revenue increased 7% to £32.7bn, helped by a 17% rise at its Speciality Medicines division (HIV, Oncology and Respiratory/Immunology). Core operating profit hit £9.8bn — an 11% uplift on the previous year.

Having been in top-tier peer AstraZeneca‘s shadow for so long, GSK’s pipeline is now starting to look more promising as well. No less than 13 new cancer drugs are currently in development, for example.

One could also argue that the market has now adjusted to the Brentford-based business’s decision spin off its consumer arm (Haleon) a few years ago and become a pure-play biopharma company. This implies a more growth-focused strategy — something that should appeal to a new audience of investors.

Still cheap

Despite it doing so well already, there are a few reasons for thinking the party might continue.

Q1 numbers are due on 29 April. Unless there are any nasties lurking, I don’t see why this stock can’t carry on rising in value. A positive sign has been the spate of director buying seen last month. We’re not talking small change either. If those who know the company best are willing to put their own money to work, I take that as very encouraging.

Second, the valuation remains reasonable. A price-to-earnings (P/E) ratio of 12 is still cheap relative to other companies in the healthcare sector. GSK also boasts above-average operating margins and returns on capital (essentially, what it gets back for the money it puts in the business), at least relative to other UK stocks.

The stock yields 3.4% too. Sure, it would be a mistake for investors to assume that any dividends are guaranteed. But GSK’s cash distributions look like they will easily be covered by expected profit. This assumes, of course, that analyst projections are on the money.

This is not to say that the £86bn cap is devoid of risk. An ongoing problem for pharmaceutical firms is that the patents on some of their drugs are set to expire. This includes GSK. On top of this, some/all of those aforementioned new drugs in development might fail.

Great option

As I type, GSK shares are the most popular buy this week on AJ Bell‘s investment platform. Given how fickle investors can be, I don’t put much weight on this. Next week, there’ll be another ‘top of the stocks’. What’s more important from a Foolish perspective is whether this is a solid pick for the long term.

In my opinion, this is the case. While some of the recent momentum may be down to the valuation simply catching up with events, this remains a great defensive option to consider buying for uncertain times.

And I’d say that’s where we are right now.

The post Why is everyone buying GSK shares? appeared first on The Twelfth Magpie.

More reading

• GSK’s share price is down 18% despite another set of strong results! Time for me to buy more for under £19 while I can?
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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Aj Bell Plc, AstraZeneca Plc, GSK, and Haleon 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.

When looking at some of the biggest main market losers in 2026 so far, easyJet (LSE: EZJ) shares undoubtedly stand out. But could now actually be a wonderful chance to pick up a slice of the budget airline?

Worse than expected

You don’t need to be Warren Buffet to understand why the Luton-based business is finding things so tough. The US-Iran conflict has pushed fuel prices skyward. Given that easyJet will have been gearing itself for the busiest time of its financial year, the timing couldn’t have been worse.

Based on the reaction, yesterday’s trading update was even more dire than the market had been expecting. CEO Kenton Jarvis and his team anticipate reporting a pre-tax loss of £540m-£560m for the first half of the financial year.

No wonder shares have now fallen almost 28% in 2026 alone.

This dramatic fall might be slightly easier for existing investors to take if other aviation stocks were suffering to a similar extent. But this isn’t the case. British Airways owner IAG, for example, is down ‘only’ 8% from where it stood at the beginning of 2026.

In sharp contrast, a stake of £10,000 invested in easyJet as markets opened up in January would now be worth roughly £7,200. There was 13.2p per share dividend paid at the end of March but that’s hardly likely to soothe the pain.

Reasons to consider easyJet shares today

As tough as the last few months have been, there’s an argument that new investors would be getting a great deal today.

A price-to-earnings (P/E) ratio of seven is certainly low (albeit IAG is still slightly cheaper). It suggests a lot of bad news is already priced in. With net cash of £434 million at the end of March, the balance sheet doesn’t look stressed either.

The company’s clearly popular with flyers too. The load factor in the first half rose to 90% and customer numbers for easyJet holidays climbed 22%. It also saw it’s “busiest Easter holiday period ever”.

Based on all this, I think the income stream looks safe. But the question is whether these things are enough to convince investors that this isn’t a value trap disguised as a beautiful bargain.

Feeling lucky?

I’m not sure it is. The way ‘negotiations’ are proceeding between the US and Iran, easyJet shares might continue to lose height in the weeks ahead. Indeed, the fact that the company’s currently receiving considerable interest from short sellers isn’t the best sign.

One thing I’m keeping in mind however, is that this isn’t anything to do with the company per se. So if there is a resolution of sorts, I think it’s perfectly possible that easyJet could recover. We know its shown itself able to navigate its way through tough times before, including the monumental shock to the system that was Covid-19.

But this feels like a binary bet, at least for now. And that doesn’t strike me as the sort of ‘investing’ I want to get involved in. As a Fool, I’m looking to grow my wealth steadily over the long term rather than take on extra risk.

I reckon there are far better opportunities for me to make money elsewhere.

The post £10,000 invested in easyJet shares at the start of 2026 is now worth… appeared first on The Twelfth Magpie.

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Paul Summers 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.

It’s tempting to assume that income investors should always prioritise buying FTSE stocks with massive yields. However, there are times when shooting for a smaller payout could make more sense. An example would be if the company has shown great form when it comes growing dividends over many years.

Boring but brilliant

International distribution and services specialist Bunzl (LSE: BNZL) is one candidate to consider. The items it handles — think food packaging and cleaning supplies — won’t set the pulse racing. But it’s partly because these things are essential that management has been able to keep raising the dividend year after year.

That said, existing investors will be wanting to forget 2025. Weaker demand in its biggest market (North America) pushed many to the exits. By the end of December, the share price had fallen by 40% or so.

But if there’s one good thing to come from all this, it’s that Bunzl shares are currently cheaper than usual. A price-to-earnings (P/E) ratio of 13 is significantly below the firm’s five-year average P/E of 19. And those dividends? Unless trading falls through the floor, the 3.4% income looks safe for now.

This stock probably won’t recover in value quickly, especially if cost inflation keeps shrinking margins.

However, as a more-reliable-than-most source of passive income, I think it takes some beating.

Steady income

Getting exposure to a utility stock or two is also worth pondering. Yes, we know that cash distributions by any company can never be guaranteed. But the beauty of firms in this part of the market is that their business models are stable and earnings are relatively predictable.

This is why my second pick is water firm United Utilities (LSE: UU).

Like Bunzl, United has been raising its dividend for multiple years. We’re not talking explosive growth — an average of 4% every year, in line with inflation. But I reckon most income investors would prefer consistency over the former.

Right now, the forecast dividend yield for FY27 stands at 4.1%. That’s solid if not exactly flashy. It’s also more than someone would get from owning a FTSE 100 tracker. In direct contrast to Bunzl, United’s share price has also been rising very nicely in recent times (+24% in the last year).

Risks here include the tight leash of the regulator and high debt due to huge capital expenditure requirements. But these are par for the course in this space.

FTSE dividend growth star

A final example of a company with a great track record for raising dividends is wealth manager Rathbones (LSE: RAT).

Supported by high margins and the fairly recent merger with the UK arm of Investec, the growth rate here averages out at around 6%–7% per year. What’s more, analyst projections have it yielding 5.1% this year.

However, Rathbones isn’t a nailed-on winner. A market crash could see clients pulling their money out, leading to a reduction in fees and eventual profit. That could slow future dividend growth and might even lead to a cut. Even in good times, the £2.3bn cap operates in a competitive industry.

But that is precisely why I’ve made sure that all three mentioned here work in different sectors. In theory, spreading money around the market in this way makes it less likely that the income stream will ever dry up completely.

The post 3 FTSE shares with many years of consecutive dividend growth appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Bunzl Plc and Rathbones Group 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.

As recovery stories go, FTSE 100 star Rolls-Royce (LSE: RR.) has been incredible.

There was a time — not long after the beginning of the global pandemic — when no one would go near the company. Back then, this felt logical. In addition to drowning in debt, the engineer’s outlook was ominous considering air travel had pretty much ceased in an effort to contain Covid-19.

Of course, hindsight is a wonderful thing. We now know that this was precisely the time to load up on the shares. In a few years, CEO Tufan Erginbilgiç has managed to turn the company around through a combination of cost-cutting and streamlining. The share price has duly responded. And then some!

The question I’ve been asking is what will be the next brilliant turnaround stock in the UK market’s top tier?

FTSE 100 laggard

One potential candidate could be automotive marketplace provider Auto Trader (LSE: AUTO).

Yes, it’s true that this is a completely different entity to Rolls-Royce in many respects. Rolls-Royce earns its money from making engines and maintaining them and has a global reach. Auto Trader links UK buyers with sellers of vehicles and does it all online.

However, the latter is currently hated by the market, just as Rolls-Royce was back in 2020. Indeed, it features high up the list of most shorted shares among traders. In other words, many are betting its price — down nearly 40% in 12 months — has even further to fall.

They could well be right. In recent times, more and more investors have begun to question whether businesses such as this can withstand the onslaught of AI.

Elsewhere, the company has faced backlash from dealerships for new initiatives. Even the British competition regulator is now investigating Auto Trader as part of a crackdown on fake reviews.

It never rains but it pours.

Auto Trader isn’t broken

On a more optimistic note, I think there’s quite a lot to like here.

The £4bn cap still has a virtual monopoly in what it does. It still posts incredible margins that would turn most firms green with envy. Levels of debt are current negligible too thanks to its asset-light business model.

Then there’s the valuation. A forecast price-to-earnings (P/E) ratio of 14 practically screams ‘bargain’ if – and that’s a sizeable ‘if’ — relationships with dealerships can be repaired and the aforementioned AI threat proves overblown (it’s worth noting that the company is already integrating its own AI-infused tools into the site).

Worth a closer look

Notwithstanding this, I’m definitely not expecting a recovery like that of Rolls-Royce (if it comes). The latter’s revival has been epic, supported by a recovery in aviation and a boom in defence spending. It’s hard to see how Auto Trader could ever achieve the same levels of revenue growth.

Even so, I do think it might warrant attention from contrarian-minded long-term investors, particularly with the share price languishing where it is. With expectations so low, any chinks of light in the next set of full-year numbers — due 21 May — could be the catalyst value hunters have been waiting for.

But I would like to see some director buying before too long. Damningly, there’s been none of this for many years (and an awful lot of selling!).

The post Could this cheap FTSE 100 stock be the next Rolls-Royce? appeared first on The Twelfth Magpie.

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• How much passive income could 333 Rolls-Royce shares pay out in 3 years?
• Investors need to face the truth about booming Rolls-Royce shares 
• Is £15 the next stop for the Rolls-Royce share price?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Autotrader Group Plc and Rolls-Royce 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.