Is Admiral’s high yield a warning to investors?

For reasons that escape me, UK financial stocks are massively out of favour.

For example, Admiral, one of the UK’s largest motor insurers, has a dividend yield of 7.5% at its current share price of £25.

That kind of yield is usually reserved for cigar butts and basket cases, so does that describe Admiral, or is the market materially undervaluing this business?

You can continue reading this blog post on my new website,

Continue Reading…

Can Unilever be trusted to deliver a growing dividend?

Unilever has been through something of a PR disaster in recent weeks.

In January, Terry Smith questioned why Unilever felt that Hellmann’s mayonnaise needed to have a social purpose beyond tasting great. Shortly after that, Smith wrote a somewhat scathing post mortem of Unilever’s recent attempt to buy GSK Consumer Healthcare, calling it a “near-death” experience.

So are the wheels falling off the Unilever wagon, or is this all just a storm in a teacup?

You can continue reading this blog post on my new website,

Selling Domino’s Pizza Group after its share price and debts increased

Domino’s Pizza Group is one of the UK’s highest quality dividend growth stocks and I have been a fan for many years and a shareholder for almost five years.

But increasing debts, an increasing share price and the rise of dark kitchens have left me wondering whether Domino’s is still a good investment.

You can continue reading this article on my new website,

SThree: A world leader in STEM recruitment and a quality dividend stock

SThree is the world’s number one recruitment firm focused solely on science, technology, engineering and maths-related roles (typically abbreviated to STEM).

I think it’s a high-quality dividend growth stock and I added it to the UK Dividend Stocks Portfolio and my personal portfolio back in April 2020.

You can read the full review of SThree on my new website over at

Why I own shares in Next

Next is a popular UK clothing and homeware retailer and it’s popular with dividend growth investors too.

It recently announced relatively positive half-year results, so I thought this would be a good time to review the company’s current situation, its underlying qualities and why Next is a holding in both my personal portfolio and the UK Dividend Stocks model portfolio.

You can see the full review on my new website,

Why I sold Burberry even though it’s a quality business

There is little doubt that Burberry is a high-quality business.

That’s one of the reasons I added it to my model portfolio and personal portfolio in 2015.

The share price at purchase was £13.70 and at that price, the company seemed to be pretty good value.

Fast forward to today and Burberry is still a quality business but the price, in early August, had reached more than £21.50.

Although Burberry has grown over the last six years, I don’t think it’s grown enough to justify that price increase.

So a couple of weeks ago I sold Burberry, somewhat reluctantly because quality companies are hard to find.

You can read my full and detailed review of Burberry, which includes my target buy price, on my new website,

Jupiter AM: A good business but is it a good investment?

In this 4,000-word investment review I look at Jupiter Fund Management PLC, a self-described high conviction active asset manager.

  • Jupiter is a leading active fund manager focused on equity funds for UK retail investors sold through financial advisers
  • Assets under management have grown fairly consistently for most of the last 35 years
  • Profitability is high, even among fund managers where high returns on capital are fairly common
  • Jupiter recently made a large acquisition to increase fund diversity and economies of scale
  • At 212p Jupiter’s dividend yield is above 8%, largely due to the pandemic and declining assets over the last two years
Continue reading “Jupiter AM: A good business but is it a good investment?”

Hunting for dividends in the Goldilocks zone

It goes without saying that dividend investors want a reasonable yield, but what is reasonable? 

Some investors are happy with yields of 2% or less because they believe high growth tomorrow will more than compensate for a low yield today. But for investors who want a decent income today, 2% is unlikely to be enough for all but the most wealthy.

At the other end of the scale, some investors will only invest in high yield opportunities, aiming for something close to and preferably above a double-digit yield. At first glance this seems like a no-brainer, but don’t forget that dividends are not guaranteed and promises of double-digit yields are often followed by the reality of dividend cuts and suspensions.

For most dividend investors then, looking for shares where the dividend yield is in the Goldilocks zone (not too high and not too low) is sensible. Of course, what is too high or too low is subjective, but I think something in the range of 4% to 8% is a good starting point.

So in this month’s Master Investor magazine, I decided to focus on a couple of FTSE All-Share companies, both of which have more than ten years of unbroken dividend payments and a starting dividend yield north of 4%.

Continue reading “Hunting for dividends in the Goldilocks zone”

Is Diageo’s share price too high?

Diageo share price chart

Diageo’s share price has increased by more than 300% since the financial crisis of 2009. In this article, I argue that the share price is somewhat stretched and that expected returns are not particularly attractive. I also calculate a target price at which I would be happy to invest.

Diageo is a well-known and generally much-liked business. It develops and manufactures alcoholic drinks such as Smirnoff, Guinness and Johnnie Walker, which it then sells in more than 180 countries.

Continue reading “Is Diageo’s share price too high?”

Is it too late to invest in UK housebuilders?

As a group, UK housebuilders have produced astonishingly good financial results over the last decade.

This has given their shareholders equally astonishing returns, with average share price gains from the largest housebuilders at close to 1,000% since the 2009 financial crisis.

One housebuilder in particular, Bellway, sits at the very top of my stock screen, thanks to its impressively consistent double digit growth, high profitability, low debts and a dividend yield of around 4% (at a share price of 3,800p).

And following the Conservative’s win in the 2019 general election, Bellway’s share price jumped another 10% or so, rewarding shareholders with yet more capital gains.

So are housebuilders set to produce similarly impressive returns over the next decade, or has this particular house party already run its course?

I’ll try to answer that by first looking at the financial results which underpin those impressive share price gains.

Continue reading “Is it too late to invest in UK housebuilders?”

Marks & Spencer: The destroyer of shareholder value

I like Marks & Spencer. No really, I do.

I used to buy most of my clothes from M&S back in the late 1980s and early 1990s, when I was in my late teens and early 20’s. The clothes were well made, the designs were mainstream and the consistency of quality and sizing was second to none (at least in my local high street). 

But that was a very long time ago and since then M&S has lurched from crisis to crisis, carrying out what seems to be an endless transformation project to “make M&S special again”.

This endless transformation has been incredibly expensive. For example, over the last 20 years M&S has retained about £2.5 billion of shareholders’ earnings to invest in the existing business, to make acquisitions, to buy back shares and so on. And yet, after all that hard work and investment of cold hard (shareholders’) cash, the company’s share price is lower today than it was 20 years ago. 

For most shareholders then, M&S has been a disaster for at least two decades.

So in my latest article for Master Investor magazine, I wanted to outline two red flags which, for many years, have suggested M&S was a no-go zone for long-term investors.

Continue reading “Marks & Spencer: The destroyer of shareholder value”

Stagecoach: Is the bumpy ride finally over?

Stagecoach Group ( is the UK’s leading bus and coach operator with a rail franchise business on the side.

As a dividend-focused investor, I find Stagecoach an interesting company because it’s a market leader, it operates in a relatively defensive sector and, at a share price of 130p, it has a dividend yield of almost 6%.

These are all attractive features and it’s why I wanted to take a closer look.

However, when I glanced at the stock’s long-term price chart I was somewhat surprised to see very large peaks and troughs, spread out over the last 20 years. 

Continue reading “Stagecoach: Is the bumpy ride finally over?”

3 High yield bargains (or are they?)

Three companies in the UK Value Investor model portfolio are currently facing huge amounts of negative sentiment.

Their dividend yields are over 7% and there are obvious and entirely plausible reasons why each company might be about to cut its dividend.

However, no dividend cuts have yet been announced (apart from a very tiny cut in one case) so it’s impossible to tell (yet) whether Mr Market is right to be so pessimistic. 

Perhaps these companies will surprise Mr Market with excellent results a year or two from now and, as a result, their share prices will soar. Or perhaps Mr Market is right and dividend cuts will be announced very soon.

We just don’t know for sure.

But regardless of the final outcome, these three companies hold many lessons about the ups and downs you should expect when you invest directly in individual companies, and the nerve you’ll need if you want to avoid selling at the first sign of trouble.

Continue reading “3 High yield bargains (or are they?)”

Royal Mail’s dividend yield is 13% but I still wouldn’t invest

A reader asked me to review Royal Mail as a dividend investment, based partly on the company’s 13% dividend yield and the fact that he couldn’t believe how low the share price was given the volume of letters and parcels passing through his mail centre.

I’m an obliging sort of chap and so, as requested, here is that review.

Here’s a summary of what I found:

  • The market for addressed letters is declining while the market for parcels is growing.
  • Royal Mail isn’t growing and profitability is below average.
  • Unions have a lot of say in worker pay, hours and conditions.
  • The CEO and Chairman have recently changed. Shortly afterwards the company announced a major turnaround plan.
  • The dividend will be cut in 2020 from 25p to 15p, but with a share price of 200p that still leaves a forward yield of 7.7%.
  • The company’s future is expected to be driven by its international parcels business.

Okay, let’s dig into some details, starting with the numbers.

Continue reading “Royal Mail’s dividend yield is 13% but I still wouldn’t invest”

Is Sainsbury’s worth its heavily discounted share price?

Poor old Sainsbury’s. Its share price is currently lower than at any time over the last 25 years and appears to be in free-fall.

But how can this be? Surely Sainsbury’s is a defensive dividend payer with a long record of unbroken dividend payments and a core supermarket business which is about as dependable as they come?

Well, perhaps not. The big UK supermarkets have had problems ever since the financial crisis made consumers far more cost conscious than they were before. The market effectively fell into the laps of Aldi and Lidl, and Sainsbury’s has been playing catch up ever since.

To build greater economies of scale, Sainsbury’s proposed a merger with ASDA in 2018 and the market briefly became optimistic about the company’s prospects. But that deal was eventually blocked by the Competition and Markets authority and Sainsbury’s shares are now about 40% below where they were last summer.

As a dividend-focused value investor that sort of decline sparks my interest, so in this month’s Master Investor magazine I decided to look at whether Sainsbury’s is finally good value or not.

Continue reading “Is Sainsbury’s worth its heavily discounted share price?”

Cranswick’s low dividend yield implies a bright future, but is that likely?

Cranswick is one of the UK’s leading food producers. It manufactures a wide range of premium fresh and cooked meat products, from pork chops to sausages, handmade pastries and much more.

With its share price at 2800p, Cranswick also has a dividend yield of just 2%, and a yield that low usually means the market is very optimistic about a company’s dividend growth potential.

But is the market right to be so optimistic about a company that makes sausages?

Continue reading “Cranswick’s low dividend yield implies a bright future, but is that likely?”