I regularly check on the progress of my holdings, and it is currently all made up of UK shares on the FTSE index.
I’ll break down why they’ve done well, and whether there’s an opportunity for me to buy more shares today.
Howden Joinery Group
I bought some shares in the kitchen supply and joinery specialist firm back in July 2022. At the time, I paid 611p per share. The shares currently trade for 791p, which is a 29% return in around a year and a half. I’ve also received dividends since my initial investment too.
Howden has grown its performance and profile well in recent years. Its reputation for good quality products and servicing the construction trade specifically has boosted performance and investor sentiment.
Current volatility is something I’m wary of. This is because turbulence has meant construction projects have slowed. Plus, with inflation levels higher than usual, costs are up and margins could be tighter than ever. This could hurt performance and returns.
However, I reckon the long-term prospects for the firm are really exciting. It should be boosted when volatility subsides. A big part of this will be due to the housing shortage. The current imbalance means firms will need kitchens, doors, and other products Howden sells when they construct new homes. This should help Howden boost performance and returns.
At present, a dividend yield of 2.65% and the shares trading on a price-to-earnings ratio of 11 make them look attractive to me. However, it’s worth noting dividends aren’t guaranteed. I’d buy more shares if I could based on my investment case today.
I purchased shares in software-as-a-service (SaaS) firm Sage in March 2022 for a price of 704p per share. Today, the shares trade for 1,185p, which is a juicy return of 68%. Again, I’ve also received dividends since I’ve held positions in the stock.
Sage’s growth story is one of the best on the FTSE, in my opinion. Growing from a small enterprise software firm to one of the most recognisable brands in the accounting area, it’s been a great journey to date.
Sage shares are trading at all time-highs and on a P/E ratio of 37. This means any negative news could send the shares tumbling. Plus, the threat of artificial intelligence (AI) could hurt future prospects of the business. However, Sage recently allayed fears on this front by confirming it has been using AI within its software for years and will continue to develop and evolve its offering.
The biggest move for me was when Sage moved to a recurring subscription model. This is because it can help provide stable revenue and boost investor sentiment and returns. It looks to have paid off so far!
Today, the shares offer a dividend yield of 1.6%, which is decent but lower than the FTSE 100 average of 3.8%.
In the case of Sage, I wouldn’t buy more shares right now, but I’ll be holding on to my existing ones and continue to reinvest dividends elsewhere if I receive them.