The UK is home to a wide selection of great growth, value and income shares. Many great London-listed companies even meet all three of these prized qualities.
Here are three of my favourite all-rounders for the New Year. Each of them is tipped to deliver spectacular profits growth in 2025, leaving them trading on rock-bottom price-to-earnings (P/E) ratios.
They also all carry dividend yields that could turbocharge investors’ passive income. Let me explain why I think they’re worth serious consideration today.
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1. Michelmersh Brick
Predicted annual earnings growth: 24%
P/E ratio: 10.2 times
Dividend yield: 5%
Michelmersh Brick‘s (LSE:MBH) fortunes are tied to those of the broader housing market. It had a horrid time in 2024 as reduced build activity dented demand for its building materials.
This may remain the case if interest rates remain at current levels. But with further Bank of England cuts predicted, 2025 looks like being a much kinder year for the penny stock. It should also continue to receive support from the repair, maintenance and improvement (RMI) market, reflecting the grand old age of Britain’s housing stock.
The brickmaker’s profits might receive a boost too if the government makes progress on plans to build 1.5 new homes in the five years to 2029.
2. Bakkavor
Predicted annual earnings growth: 10%
P/E ratio: 11.8 times
Dividend yield: 6.2%
FTSE 250-listed Bakkavor (LSE:BAKK) supplies fresh food to supermarkets and foodservice providers across the UK, US and China. We’re talking about a wide range of products including salads and pizzas, dips and puddings.
The ‘food on the go’ market is huge and growing in response to our changing lifestyles. Our appetite for well-prepared, quality food is undimmed, although we feel that we often lack the time or energy to make something ourselves. This is where Bakkavor comes in.
I like the steps the company’s made in recent times to improve global capacity. But with 84% of revenues sourced from the UK, bear in mind that it could suffer some near-term sales issues if economic conditions at home remain weak.
3. M&G
Predicted annual earnings growth: 94%
P/E ratio: 8.1 times
Dividend yield: 10.4%
Financial services provider M&G (LSE:MNG) could see earnings take off if, as expected, central banks cut interest rates further. It also stands to gain from rising demand for asset management services as more and more people proactively plan for retirement.
M&G is an industry giant, enjoying strong brand recognition and enormous scale that allows it to exploit these opportunities. Admittedly, it faces intense market competition. But I think it can deliver impressive and sustained growth due to demographic changes across its territories.
I also like this FTSE 100 share because of its strong capital base (its Solvency II ratio rose to 210% as of June). This gives it considerable scope to invest for growth while still paying enormous dividends.
