The FTSE 250 hasn’t been a stellar performer over late, coming in essentially flat over the last five years. However, for some stock pickers, the returns have been far more impressive.

Take 4imprint Group (LSE:FOUR) as a prime example to consider. The promotional products distributor has delivered an average compounded total return of 23.9% per year over the last 15 years – almost triple the long-term average of the UK stock market.

Just to put this into perspective, a £500 initial investment made in 2011 is now worth close to £12,446 today.

So, with its share price currently hovering around 3,590p, is it worth investing £503 to snap up 14 shares today?

What’s behind the 15 years of market-beating returns?

As a quick crash course, 4imprint is the leading direct marketer of branded promotional products in North America. Think branded mugs, tote bags, and polo shirts emblazoned with a company’s logo and given away to employees, customers, or at events.

Obviously, that doesn’t exactly sound like a high-growth enterprise. But the business model is quietly exceptional.

4imprint designs and markets the products, while third-party suppliers handle manufacturing and fulfilment. That capital-light structure means almost all revenue converts into free cash flow, which is then reinvested to generate more growth, in a self-sustaining value-building loop.

Yet despite dominating its niche for over a decade, 4imprint still only holds around a 5% share of a highly fragmented $25bn North American market. In other words, the impressive growth seen so far could be just the tip of the iceberg.

So, it’s no wonder that five out of six institutional analysts currently recommend the stock as either a Buy or Outperform. But what risks should investors be aware of?

Can the growth really continue?

While 4imprint’s long-term trajectory looks promising, it’s impossible to ignore the near-term challenges that management has encountered.

The firm’s 2025 results showed revenue fell to $1.35bn from $1.37bn, with pre-tax profit dipping to $150.8m from $154.4m as new customer orders softened.

This perfectly highlights the group’s cyclical nature. After all, when economic conditions are tough, discretionary corporate spending is often the first thing put up on the chopping block. And this impact has only been compounded by the emergence of US tariffs.

The core risk here is straightforward. 4imprint sources products globally and sells almost entirely into the US market. If tariffs escalate further or US business confidence deteriorates sharply, both order volumes and margins could come under renewed pressure.

The bottom line

Few FTSE 250 stocks have compounded wealth as consistently as 4imprint over 15 years. The capital-light model, dominant market position, and vast untapped runway are as compelling today as they’ve ever been.

The tariff headwind is real and shouldn’t be dismissed. But for long-term investors comfortable with short-term noise, I think this dip could represent a genuinely interesting entry point to think about regarding one of the market’s most reliable compounders.

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• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
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• Just 97 shares of this UK dividend stock generate £238 in passive income
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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended 4imprint 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.

The FTSE 100 has averaged roughly 8% a year over the long run. But with the right stock picks, investors can do significantly better.

Antofagasta (LSE:ANTO) is a compelling example of a market-beating stock. Since May 2016, the Chilean copper mining giant has delivered an average compounded total return of 29.2% per year.

That means a £1,000 investment made a decade ago is now worth an extraordinary Â£12,960, all without adding a single penny more. And at the current share price of 3,995p, that same £1,000 today buys 25 shares.

So, is it still worth doing?

What’s driven a decade of exceptional returns?

Antofagasta operates four of the world’s largest open-pit copper mines in Chile, producing over 660,000 tonnes of copper annually alongside meaningful volumes of gold and molybdenum as byproducts.

The secret behind those extraordinary returns lies in what copper has become. Once considered a simple industrial metal, it’s now the backbone of the global energy transition. And it’s essential for electric vehicles, renewable energy infrastructure, power grids, and data centres.

However, over the past decade, demand has surged while new supply has remained stubbornly constrained.

Building a large copper mine takes 15 to 20 years from discovery to production, meaning the structural supply deficit is unlikely to ease anytime soon. In fact, it’s expected to get a lot worse, putting Antofagasta, with its world-class low-cost mines, in a near-perfect position to thrive.

Is the opportunity still intact?

With AI data centres now emerging as a major new source of copper demand on top of EV and grid investment, the structural tailwinds are arguably stronger today than at any point in the last decade.

As such, copper prices are set to climb due to this powerful combination of restricted supply and surging demand. And subsequently, analysts have recently begun raising their earnings and share price expectations.

Just last month, the team of experts at Citi reiterated their Buy recommendation with a share price target of 4,300p, suggesting there could still be more room for growth.

Having said that, it’s important to recognise the risks.

Antofagasta’s assets are concentrated entirely in Chile, a country that has been gradually increasing royalties and taxes on its mining sector. Any further regulatory tightening could apply unwanted pressure to the group’s current and future profitability.

Copper prices are also inherently cyclical. A global economic slowdown or a sharper-than-expected deceleration in Chinese industrial activity could weigh heavily on the group’s revenues.

So, are these risks worth taking?

The bottom line

Few FTSE 100 stocks have compounded wealth as beautifully as Antofagasta over the last decade. And with the structural case for copper looking more promising than ever, I think the growth story is far from over.

However, it’s also important to highlight that this growth opportunity hasn’t gone unnoticed. While the analysts at Citi believe more capital gains are on the horizon, other analysts are less bullish, with the average consensus sitting closer to 3,400p.

In other words, a large chunk of future growth is already baked into the share price, opening the door to volatility if Antofagasta starts to fall short of expectations. With that in mind, this isn’t a FTSE 100 stock I’m rushing to buy today. But it’s definitely a business I’m keeping a close eye on.

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• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• 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
• £10,000 in an ISA generates a second income of…

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.

Even with the stock market trading near record highs, there are still growth stock opportunities hiding in plain sight for long-term investors willing to look past the noisy headlines.

Goodwin (LSE:GDWN) is potentially a solid example. The shares collapsed 47% in a single day in March – a dramatic sell-off triggered by a surprise trading update. But when digging a little deeper, this may have secretly created an exciting buying opportunity.

Let’s take a closer look.

What does Goodwin actually do?

Goodwin is a specialist industrial engineering group operating across two core divisions.

Its Mechanical Engineering arm manufactures highly complex valves, pumps, and castings for some of the most demanding environments on the planet. Think naval defence vessels, nuclear decommissioning facilities, and liquefied natural gas infrastructure.

On the other hand, its Refractory Engineering segment produces precision materials used in jewellery casting and high-performance industrial applications.

In short, Goodwin is a niche, technically demanding business that very few competitors can replicate. And that’s precisely what makes the recent sell-off so interesting.

So why did the shares crash?

The March trading update revealed that Goodwin had unexpectedly lost two significant tenders worth approximately £60.6m combined. This included a £45m contract with the Sellafield nuclear site and an €18m coastal radar contract for Estonia.

For a business of Goodwin’s size, that’s a meaningful setback. Add in some delayed valve dispatches on Middle East LNG contracts due to geopolitical uncertainty, and the market’s reaction becomes understandable.

But here’s what the panic sellers may have missed.

Despite these challenges, management nonetheless reiterated its full-year guidance with the group’s fixed order book standing at £288m. That’s because the company continues to sit on a significant pipeline of active defence and nuclear decommissioning projects that haven’t been formally contracted yet.

This ‘shadow’ order book is a powerful hidden tailwind. Defence spending and nuclear decommissioning are surging across Europe, representing a multi-decade structural opportunity that isn’t going away.

Does that make Goodwin a guaranteed winner? Of course not.

We’ve already seen how surprise tender losses and geopolitical disruption can have an impact on Goodwin’s share price. And with its Refractory Engineering segment tied strongly to the global jewellery market, higher precious metal costs as well as a general softness in luxury goods are proving to be a drag on performance.

So, what’s the verdict?

The bottom line

For long-term investors, a massive share price collapse in a fundamentally sound business with a robust order book and a hidden project pipeline is exactly the kind of dislocation that can create rare buying opportunities.

Looking at Goodwin, I can’t help but feel the market has overreacted here. That’s why I’m already considering adding this business to my portfolio. And it’s not the only interesting growth stock on my radar right now…

The post Down 47%, is this growth stock finally worth buying in May? 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
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income
• £10,000 in an ISA generates a second income of…

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Goodwin 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.

Real estate investment trusts, or REITs, have long been one of the most popular vehicles for generating passive income from property without the hassle of being a landlord. And right now, with higher interest rates weighing heavily on valuations, some genuinely attractive yields have popped up for long-term investors.

Two that stand out in May are Supermarket Income REIT (LSE:SUPR) and Primary Health Properties (LSE:PHP).

At current yields of 7.52% and 7.67% respectively, every £1,000 invested in Supermarket Income REIT generates £75.20 a year in passive income, while the same amount in Primary Health Properties delivers £76.70.

That’s more than double the rougly 3% payout UK index investors are earning today!

So, why are these yields so high? And where exactly is the risk?

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 investment thesis

Starting with Supermarket Income REIT, this commercial landlord owns a portfolio of large-format supermarket properties, predominantly leased to grocery giants like Tesco and Sainsbury’s on long-duration rental contracts linked to inflation.

The appeal for income investors is quite intuitive. Supermarkets are among the most essential retail formats in the country, often continuing to trade profitably through even recessions. And with a client list of healthy industry titans, this REIT’s income stream looks exceptionally secure.

What’s more, the business has been quietly diversifying its target market. Several of its properties now double as fulfilment hubs for online grocery orders, increasing their operational value to tenants and paving the way for stickier, longer-lasting relationships.

Primary Health Properties tells an equally compelling story. Over 90% of its rental income is funded directly or indirectly by the NHS, effectively translating into cash flow backed by the British government.

But it also has a bit of a secret weapon. Many of its older leases are currently priced below open market rent levels. That means there’s a material pipeline of future rent uplifts on the horizon or, in other words, the group’s income looks set to grow even without acquiring a single new property.

What’s the catch?

As promising and as secure as these cash flows and, in turn, dividends seem, there are some important risks to highlight.

Most notably, each REIT carries significant debt on their balance sheet. And with interest rates still remaining elevated, it’s already translated into notable pressure on margins as well as property valuations. The result has been higher loan-to-value ratios and tighter dividend coverage.

For the time being, shareholder payouts remain relatively secure. But if interest rates start to tick back up due to higher-than-expected inflation, that coverage could get strained.

The bottom line

The macroeconomic risks surrounding the entire REIT sector is tough to ignore. But while some businesses could struggle under increased pressure, there are always exceptions. And finding these exceptions today could result in earning substantial yields in the long term.

In my opinion, both of these REITs could be in this winning category. That’s why I’m already investigating both as potential additions to my passive income portfolio.

The post 2 REITs yielding 7%+ to consider for passive income in 2026 appeared first on The Twelfth Magpie.

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• 3 top income-focused stocks to buy in May 2026, according to experts
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• £20,000 in an ISA? This passive income stock could give you £3,271 in dividends in 2025 and 2026

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties 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.

Collecting dividends from a dividend stock is one of the most satisfying ways to build a passive income. The money arrives whether you’re working, sleeping, or on holiday. And the UK stock market is packed with opportunities to make it happen.

One company that regularly catches the eye of income investors is British American Tobacco (LSE:BATS).

With a dividend per share of 245.04p, investors only need to own 97 shares to unlock a passive income of Â£237.69 a year. At the current share price of 4,390p, that position would cost approximately Â£4,258.30 to build – comfortably within reach for many ISA investors.

But is it actually a good idea?

What’s the investment case?

British American Tobacco is one of the world’s largest tobacco companies, owning iconic brands including Dunhill, Lucky Strike, and Newport.

The stock currently yields around 5.7%, making it one of the more generous income opportunities in the FTSE 100. But unlike many high-yield income stocks, the payout is actually backed by substantial and highly predictable cash flows, generated from a deeply loyal customer base.

 That’s not a coincidence. Tobacco is one of the most addictive consumer products on the planet, and that dynamic translates directly into pricing power and cash generation that most businesses can only dream of.

But beyond traditional cigarettes, the group has been investing heavily in its New Categories division.

This newer line of products focuses on vapes, heated tobacco products, and nicotine pouches under brands like Vuse and Velo. And the segment is growing rapidly as a central part of management’s strategy to reposition the business away from traditional cigarettes.

The combination of new and legacy product sales continues to generate ample, sturdy cash flows. And that’s subsequently paved the way for continuous dividend hikes each year for over two decades in a row.

Needless to say, that kind of track record speaks volumes about the resilience of the underlying business model, even in the most challenging environments.

What could go wrong?

While British American Tobacco is making good progress with its transition, the company is working against the clock.

Governments worldwide are actively tightening regulations on tobacco and nicotine products at an accelerating pace. From plain packaging laws to outright bans on certain products in key markets, the regulatory headwind is real and unlikely to reverse.

This has already translated into volume declines for traditional cigarettes. And if the group’s New Categories division fails to fully offset this regulatory erosion, long-term cash flows and, in turn, dividends could come under pressure.

The bottom line

For pure income, few dividend stocks on the London Stock Exchange offer what British American Tobacco has right now.

The yield is chunky, the cash flows are formidable, and the New Categories pivot is gaining real momentum.

Obviously, there’s the ethical dimension to consider. Many investors understandably don’t like the idea of having tobacco companies in their portfolios. And that’s a completely legitimate position to take.

But for investors who don’t have such ethical objections and are comfortable with the regulatory risks, this dividend stock could be worth investigating further.

The post Just 97 shares of this UK dividend stock generate £238 in passive income appeared first on The Twelfth Magpie.

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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco P.l.c. 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.

Building a second income from the stock market is one of the most powerful things an investor can do with their spare capital. And the London Stock Exchange is genuinely one of the best places in the world to do it.

But with the FTSE 100 trading near all-time highs, the index as a whole is only yielding around 3.1% today. That means £10,000 inside a Stocks and Shares ISA invested in a simple index tracker would generate just £310 a year in passive income.

That’s certainly nothing to scoff at. But with savings accounts offering similar yields at much lower risk, it’s hardly an exciting prospect.

However, for stock pickers willing to dig a little deeper, a portfolio could go on to earn considerably more.

What can stock pickers earn instead?

Take LondonMetric Property (LSE:LMP) as a compelling example to consider. With a current dividend yield of 6.6%, that same £10,000 investment would generate £660 a year in passive income – more than double the index.

Crucially, this isn’t a yield built on shaky foundations. LondonMetric is a specialist FTSE 100 real estate investment trust (REIT) focused on logistics, convenience retail, and healthcare properties.

Think last-mile delivery warehouses, supermarkets, and primary healthcare centres – the exact kind of essential real estate that keeps generating rental income regardless of the economic cycle.

What’s more, the business has built a portfolio of long-duration leases with built-in annual rent increases, typically linked to inflation. That means the income doesn’t just sit still. It grows year after year, compounding alongside the portfolio.

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.

What are the risks and rewards?

LondonMetric’s growth potential is rooted in structural tailwinds. The relentless growth of e-commerce continues to drive demand for last-mile logistics space, while the ageing UK population is creating sustained demand for healthcare properties.

While warehouses dominate its portfolio, LondonMetric is well-positioned in both.

There’s also a strong track record to point to. The company has grown its dividend every year since 2014, demonstrating management’s ability to continuously execute for over a decade.

That said, this is still a property business with meaningful debt on its balance sheet.

If interest rates end up staying higher for longer, it would drive up the group’s refinancing costs, squeezing free cash flow in the process. What’s more, if this higher rate environment is paired with a slowdown in demand, the simultaneous occupancy drop could put material pressure on rental cash flows and, in turn, dividends.

For income-focused investors, these risks feel manageable given the essential nature of LondonMetric’s assets and the quality of its tenant base. But they’re worth understanding before investing.

The bottom line

A £10,000 ISA can work considerably harder than a simple index tracker suggests. And with a 6.6% yield, a growing dividend, and exposure to some of the most structurally resilient property sectors in the UK, LondonMetric looks like a second income opportunity genuinely worthy of a closer look.

That’s why I’ve already added this stock to my passive income portfolio. And it’s not the only income opportunity I’ve spotted this week…

The post £10,000 in an ISA generates a second income of… appeared first on The Twelfth Magpie.

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Zaven Boyrazian has positions in LondonMetric Property Plc. The Motley Fool UK has recommended LondonMetric Property 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.

Hunting for a quality income stock when equity markets are trading near all-time highs can feel like a challenging task. Yet some of the most generous yielders on the London Stock Exchange are still trading at attractive levels, and some professional analysts are taking notice.

Here are two that deserve a closer look in May 2026, according to the pros.

1. Chesnara: 21 years of rising dividends

Chesnara (LSE:CSN) is a specialist life assurance business that acquires and manages closed life insurance and pension books across the UK, Sweden, and the Netherlands.

It isn’t a flashy business. But boring can be lucrative when it comes to income investing.

The model is remarkably straightforward. Chesnara buys legacy life insurance portfolios that larger insurers no longer want to run, extracts the cash flows embedded within them, and returns that capital to shareholders. The result? 21 consecutive years of rising dividends have paved the way to an impressive 7.2% yield.

This phenomenal performance stems from the group’s structural growth engine. As Chesnara extracts value from its existing portfolio, the cash generated funds the search for the next acquisition. And with an ageing population across the UK and Europe, the supply of closed life insurance books is only getting larger.

Each new deal adds another layer of predictable, long-duration cash flows to the pile – exactly the kind of compounding income machine that patient investors dream about.

So, what could go wrong? Chesnara’s dividend isn’t comfortably covered by earnings, and the company recently reported a negative return on equity. If investment returns on its insurance portfolios disappoint, or if acquisition opportunities dry up, the income stream could come under pressure.

That said, with nearly two decades of unbroken dividend growth, management has navigated tougher environments than this before.

2. Ashmore: an emerging markets income play

Ashmore Group (LSE:ASHM) is another specialist financial group, this time focused on asset management within the emerging market sector. It manages a long list of funds across multiple asset classes like fixed income, equity, and multi-asset strategies for institutional clients worldwide.

The excitement around this one comes from a significant upgrade. In February 2026, Jefferies analyst Laura Gris Trillo upgraded Ashmore from Hold to Buy and more than doubled their price target to 285p, citing a “turning point” in the emerging market cycle as a key catalyst.

For income investors, a 7.8% yield backed by that kind of institutional conviction is hard to ignore.

However, it’s a divided picture. Other institutional analysts, like the team at Morgan Stanley maintains an Underweight rating at 208p, arguing that the recovery in emerging markets may be slower and less linear than Jefferies expects.

Whether the emerging market cycle has truly turned, or whether patience is still required, is the central question for investors considering this income stock today.

The bottom line

Two very different businesses, but both offer yields well above the market average alongside genuine institutional backing.

Personally, Chesnara’s track record of dividend consistency gives it the edge in my eyes. But for income seekers willing to take on a little more cyclical risk, Ashmore’s 7.8% yield and a potential recovery tailwind could make for a compelling combination to investigate deeper.

The post Expert recommendations: 2 top income stocks yielding 7%+! 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
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• 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

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Chesnara 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.

Finding a reliable stock to buy for income isn’t always easy. But right now, institutional analysts are pointing to several compelling opportunities hiding in plain sight on the FTSE 100 and FTSE 250.

Here are three dividend stocks that experts believe deserve a closer look in May 2026.

The income heavyweights

First up is Legal & General (LSE:LGEN). As one of the UK’s largest insurance and asset management groups, it provides a host of retirement and investment management services.

The bull case is straightforward. The stock currently yields 8.7%, backed by nearly two decades of consecutive dividend growth. And several institutional analysts are pointing to Legal & General’s expanding pension risk transfer business as a powerful long-term growth engine as defined benefit schemes continue to offload their liabilities.

However, not everyone is convinced, with some analysts rightfully flagging earnings coverage. With dividends currently running slightly ahead of earnings per share, any unexpected pressure on profitability could force management to reconsider the payout trajectory.

That’s a risk worth watching closely.

Another high-yield income stock to consider is Primary Health Properties (LSE:PHP). This is a specialist tax-efficient REIT that owns and leases primary healthcare facilities as well as GP surgeries across the UK.

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.

Dependable is probably one of the best words to describe its dividend, with the healthcare landlord raising shareholder payouts for 28 years in a row, underpinned by long-term leases predominantly funded by the NHS.

However, it’s important to highlight that while renting the majority of its properties to the NHS, the REIT is somewhat captured by its flagship customer.

The UK government has significant negotiating leverage when it comes to renewing leases. And if political priorities shift, budget cuts to certain parts of the NHS could translate into expiring leases not being renewed.

That’s potentially a big problem given that higher interest rates are already putting pressure on cash flows and, in turn, dividends.

A consumer retail dark horse

Another pick from the experts is Dunelm Group (LSE:DNLM) – the UK’s leading homewares retailer, selling everything from bedding and curtains to furniture through its nationwide store network and rapidly growing online channel.

Analysts at Barclays and Berenberg both carry Buy ratings, citing Dunelm’s exceptional cash generation and management’s consistent ability to grow market share even in tough consumer environments. The icing on the cake? The board recently declared a special dividend of 25p per share on top of its regular payout.

That’s certainly an encouraging sign for investors looking for a new income stock. However, it’s important to highlight the group’s sensitivity to the British consumer.

If UK household spending comes under renewed pressure from higher taxes or sticky inflation, discretionary homewares purchases are often one of the first things customers cut back on.

The bottom line

These are three very different businesses. But while none are perfect, they are all currently generating strong cash flows that are being used to reward shareholders with impressive yields.

Out of the three, Primary Health Properties looks like it’s the most secure in my eyes. But all three deserve a closer look. So, for income-focused investors hunting for a quality stock to buy this month, these might be worth mulling over.

The post 3 top income-focused stocks to buy in May 2026, according to experts appeared first on The Twelfth Magpie.

More reading

• 2 REITs yielding 7%+ to consider for passive income in 2026
• How to invest £150 a month in shares to target a £7,660 passive income for life
• The Legal & General share price is at a 10-year low – but the dividend income is stunning!
• How much do investors need in a SIPP to cover the UK’s £1,377 average rent?
• Here’s how much to put in your ISA if you hope for passive income of £21,000

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Primary Health Properties 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.

Putting £20,000 into a Stocks and Shares ISA at the start of 2026 was already a smart move. But depending on what you bought, the results so far have been dramatically different.

An investor who simply put their full ISA allowance into a FTSE 100 index tracker on 1 January would be sitting on approximately Â£20,882 today, following a 4.41% total return in 2026 so far. That’s a solid start.

But stock pickers who spotted the opportunity in Saga (LSE:SAGA) have done far better. The shares have surged 53.2% since the start of the year, turning that same £20,000 investment into approximately Â£30,640 in just four months!

So, what’s been driving the excitement? And is it too late to get involved?

What does Saga actually do?

As a quick crash course, Saga is a specialist services company exclusively targeting the UK’s over-50s market – a fast-growing demographic that’s often underserved by most mainstream providers.

The company operates through two primary segments:

• Insurance – offers motor, health, and home cover policies, specifically for older individuals.
• Travel – offers package holidays and runs both ocean and river cruises.

The last few years have been quite a challenge, with Saga’s debt-heavy balance sheet being hit hard by higher interest rates that simultaneously squeezed profit margins. But encouragingly, Saga’s latest full-year 2026 results showed early signs of recovery.

Revenue growth alongside progress in debt reduction might have just signalled a potential inflexion point – something that’s clearly caught the market’s attention.

Is the rally just getting started?

Looking at the latest institutional analyst forecasts, of the three professionals tracking this business, all have either issued a Buy or Outperform rating, with an average share price target of 725p. Compared to where Saga shares are trading today, that suggests there’s still a 22.3% potential gain waiting to be unlocked even after a strong initial run.

Looking at what’s driving these forecasts, earnings are projected to grow at an extraordinary 48.4% per annum over the next three years as the turnaround gathers pace.

The over-50s travel and insurance market is also structurally growing, thanks to an ageing UK population providing a natural and expanding customer base that Saga is uniquely positioned to serve.

The risks, however, deserve serious attention. Saga still carries a lot of debt on its balance sheet. And any slowdown in revenue or earnings growth could make servicing its remaining debts considerably harder. The business is also still mid-turnaround, and execution risk remains elevated. If management stumbles, the share price recovery could reverse just as sharply as it arrived.

So, should investors be considering Saga shares for their portfolios?

I think the turnaround thesis here is credible, and the long-term demographic tailwind is undeniable. But with debt still a concern, I think the risk is still a tad too high for my Stocks and Shares ISA. But for investors with a higher risk tolerance, Saga shares could indeed be worth a closer look.

The post £20,000 invested in a Stocks and Shares ISA on 1 January is now worth… 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
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• 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

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.

A SIPP is one of the most powerful wealth-building tools available to UK investors. And for anyone already lucky to be sitting on a £60,000 pension pot today, the journey to millionaire status might be much closer than they think.

So, how does it work? And what’s the smartest way to get there?

From £60k to £1m

At the stock market’s long-run average annual return of 8%, a £60,000 SIPP left untouched would compound into approximately £1,058,689.41 in around 36 years.

That’s a long time. But for younger investors, it means millionaire status just as they start reaching retirement age, all without adding a single extra penny.

Of course, most investors won’t stop contributing. And every additional payment made along the way shortens that timeline further. The real point is that time and compounding are doing the heavy lifting.

However, for those willing to pick quality individual stocks directly rather than simply track the market, this timeline to becoming a millionaire can be significantly accelerated.

Boosting investment returns

Few companies in the FTSE 100 better embody the kind of long-term compounding quality that can dramatically shorten the wealth-building journey than Halma (LSE:HLMA).

We know this because the specialist technology group has already proven itself to be a millionaire maker, averaging a total annualised return of 19.1% over the last 20 years – enough to transform a £60,000 initial investment into a whopping £2,655,166!

The company operates across three high-growth sectors: Safety, Environmental & Analysis, and Medical through a network of subsidiaries. Rather than running its divisions centrally, it operates a decentralised model, acquiring niche market leaders in essential industries and giving their management teams the autonomy to grow.

The results have been extraordinary. Halma has delivered 22 consecutive years of record adjusted profit – a feat that almost no other FTSE 100 company has matched. And with more tailwinds (like ageing populations, infrastructure safety, and environmental regulation) on the horizon, many institutional analysts continue to be optimistic for what the future might hold, even at today’s premium valuation.

So, what could go wrong?

Where is the risk?

Halma’s decentralised acquisition strategy is its greatest strength. But it’s also a double-edged sword. If leadership begins to lose discipline in its dealmaking, overpaying for acquisitions or buying businesses outside its circle of competence, the compounding engine could stall.

There’s also meaningful currency exposure to consider. With operations spread across North America, Europe, and Asia, a sustained strengthening of sterling could weigh on reported earnings even when the underlying businesses are performing well.

For long-term SIPP investors, however, these risks feel manageable given Halma’s exceptional track record and the quality of its management team.

The bottom line

A £60,000 SIPP has genuine millionaire potential. And for patient investors prepared to back quality compounders for the long run, I think that journey could arrive far sooner than the index fund alone would deliver.

Halma could be among these winning businesses. But as already highlighted, there are risks that must be considered carefully. Nevertheless, its long track record has certainly caught my interest. And I think it’s a business worth investigating further.

The post Here’s how to target retiring as a millionaire on a £60k SIPP 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
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• 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

Zaven Boyrazian has no position in any of the shares mentioned. The Twelfth Magpie has recommended Halma. 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.