What unfairly gets less attention is the index’s ability to provide a decent passive income. To illustrate the point, the FTSE 250’s forward dividend yield of 3.5% matches that on offer from the Footsie.

Today I’m looking for the best ‘all rounders’ for UK share investors to consider buying today. Here are two from the FTSE 250 I think are attractive growth and dividend stocks, and especially so at current prices.

Warehouse REIT

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Real estate investment trusts (REITs) like Warehouse REIT (LSE:WHR) typically don’t have the potential to deliver stratospheric dividend growth. But they compensate for this by providing a reliable stream of passive income regardless of economic conditions.

This is thanks in large part to REIT dividend rules. Each year, at least 90% of annual rental profits must be distributed by way of dividends.

However, this alone isn’t enough to guarantee steady dividends, given their relationship to profits delivery. Yet earnings at companies such as this are usually immune to volatility thanks to the long contracts that tenants are tied down with.

In the case of Warehouse REIT, the weighted average unexpired lease term (WAULT) as of September was 4.7 years.

City analysts expect annual dividends to be locked for this financial year (to March 2025) and next year. However, investors can still enjoy a tasty 6.2% dividend yield.

I expect rising demand for logistics properties to underpin strong long-term dividends here. I think it’s worth considering despite interest rate risks to its profits (e.g., the potential for higher borrowing costs and reduced asset values).

Indeed, City analysts expect earnings to rise 23% in financial 2025 and 7% in financial 2026. With a forward price-to-earnings-to-growth (PEG) ratio of 0.8 for this year, that represents decent value for money.

Any reading below one suggests that a share is undervalued.

Bakkavor

Bakkavor (LSE:BAKK) is another FTSE 250 share offering an attractive blend of growth, dividends, and value.

Forecasters think earnings here will leap 26% year on year in 2025. This leaves it dealing on a forward PEG multiple of 0.6. Meanwhile, expectations of another dividend increase leaves the dividend yield at a meaty 4.9%.

Bakkavor makes freshly prepared food like bread, salads, pizzas, and desserts. This has two distinct advantages for investors.

Firstly, food industry earnings tend to remain stable regardless of economic conditions. We all need to eat, don’t we?

Secondly, the company is tapping into a fast-growing segment: people are becoming more inclined to healthier, fresher meals, but an increasingly large number of us don’t have the time to prepare them. Bakkavor solves this problem.

With operations across the UK, US, and China, Bakkavor provides exposure to rock-solid markets alongside fast-growing ones. Bear in mind, though, that its geographic footprint leaves it vulnerable to foreign currency risk.

Bakkavor has also been experiencing earnings issues in Asia recently, though the success of recent restructuring initiatives is an encouraging omen.

The post 2 dirt-cheap FTSE 250 shares to consider for growth and dividends! appeared first on The Motley Fool UK.

Airtel Africa

What it does: Airtel Africa provides mobile telecommunication services to 14 countries across the African continent.

By Mark Hartley. I bought Airtel Africa (LSE: AAF) shares a few months ago after the price dipped near a three-year low. This came after underwhelming Q2 2025 results, with earnings per share (EPS) missing expectations by 80%. Despite the drop, I have felt confident in the group’s long-term potential for some time so the low price seemed like a good opportunity. It has since recovered 51%, making it one of the best-performing stocks in my portfolio.

However, it still faces significant risks from currency devaluation in Nigeria, one of its core markets. Rising fuel prices pose another risk as the company uses generators to power its remote cell towers. To mitigate the losses, the company is working to reduce its exposure to foreign exchange, having paid down $809m in forex debt exposure. Despite the rising price, the stock still appears undervalued with a forward price-to-earnings (P/E) ratio of only 7.

Mark David Hartley owns shares in Airtel Africa.

Ashtead Technology

What it does: Ashtead Technology is a leading subsea equipment rental and solutions provider for the global offshore energy industry.

By Ben McPoland. I recently bought more shares of Ashtead Technology (LSE: AT.). The specialist rental firm continues to advance, fueled by its acquisition-driven growth strategy.

For 2024, it expects revenue to reach £168m, a 52% year-on-year increase, with underlying operating profit exceeding the consensus forecast of £46.6m.

In the full-year trading update, CEO Allan Pirie commented: “With one of the largest and most technologically advanced rental fleets in the industry and a continued focus on operational excellence, we remain confident in the Group’s ability to generate substantial long-term value for shareholders.”

I agree with that, though the company’s growth is dependent on offshore oil, gas, and renewables markets. Economic downturns or declining energy prices could reduce exploration and capital expenditure, leading to lower demand for rented equipment.

At present though, Ashtead Technology is in a strong position. Ongoing market demand and record customer backlogs give it confidence that growth will continue through 2025.

A final attraction for me here is the valuation. At 528p (as I write), the stock is trading at just 10 times forecast earnings for 2026.

Ben McPoland owns shares in Ashtead Technology Holdings.

Bakkavor

What it does: Bakkavor is a fresh prepared food group, supplying supermarkets with products such as bread, pizza, ready meals and salad.

By Roland Head. FTSE 250 firm Bakkavor (LSE: BAKK) is not a household name, but its products are found on the shelves of all the UK’s major supermarkets.

I recently added this business to my portfolio. I see it as a steady grower and was encouraged by 2025 forecast earnings growth of 10%. That prices the stock on just 12 times forecast earnings, with a tempting dividend yield of 5.9%.

I’m also reassured by the continued influence of the company’s founders, Agust and Lydur Gudmundsson. They control almost 50% of the shares and sit on the board.

Outside the UK, Bakkavor also operates in the US and China. China looks like the main risk to me, for investors. In addition to geopolitical risks, the China business is currently relatively small and loss making.

However, I don’t see this as a reason to avoid Bakkavor, which looks decent value to me at current levels.

Roland Head owns shares in Bakkavor.

Games Workshop

What it does: Games Workshop manufactures tabletop gaming products including models, paints and manuals.

By Royston Wild. Fantasy wargaming giant Games Workshop (LSE:GAW) enjoyed another barnstorming year in 2024, rising 35% in value since 1 January.

Yet it fell sharply from record closing peaks of £142.70 per share in December, and dropped further following half-year financials last month. I used this as an opportunity to increase my holdings.

There’s been no spooky news coming from the Warhammer maker in recent weeks. Indeed, January’s update showed sales up 14% in the six months to 1 December, helped by licensing revenues soaring 149% in the period.

Games Workshop may endure some near-term turbulence if consumer spending remains weak. Yet this hasn’t proved an obstacle to its breakneck growth story just yet. This reflects in large part its niche product lines and loyal customer base.

I remain supremely confident in the FTSE 100 firm’s long-term outlook. The tabletop gaming segment has scope for further significant growth. And Games Workshop’s film and TV deal with Amazon could supercharge royalty revenues in the years ahead.

Royston Wild owns shares in Games Workshop.

Glencore

What it does: Glencore is one of the world’s largest natural resource companies with operations across 35 countries.

By Andrew Mackie. As a die-hard value investor, I spend a lot of my spare time searching for stocks that I believe are undervalued relative to their long-term prospects. Trading at levels not seen since early 2022, Glencore (LSE: GLEN) is near the top of that list.

In the years ahead, I envisage a mismatch in the supply-demand dynamics for many of its commodities, in particular copper.

It’s no great secret that demand for copper is rising across the globe. Electricity grids are creaking at the seams as demand for electricity from the likes of data centres and EVs continue to grow. And now with a US administration keen to rebuild its country’s manufacturing prowess, I can’t see anything other than demand increasing.

Set this against a global investor community more interested in chasing tech stocks higher, and what has been the result? An industry starved of capital, risk averse and with little incentive for exploration.

Sustained low commodities prices (mainly because of weak Chinese demand) continues to weigh down on its share price. This remains one of the most important short-term risks. But looking a decade out, I remain bullish.

Andrew Mackie owns shares in Glencore.

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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.

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.

The post 3 UK shares to consider for value, growth AND dividends in 2025! appeared first on The Motley Fool UK.

According to HM Revenue and Customs (HMRC), the number of ISA millionaires in the UK has surged to more than 4,000.

The rules say we can invest as much as £20,000 in an ISA each year. Then that money can grow via investments without attracting tax.

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. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

However, not many people have that much money free each year to bung into shares. So I’d plan to invest just £497 a month, which adds up to £5,964 a year.

Small beginnings can lead to big things

But that lesser amount would still have the potential to make a big impact over time and may lead to a portfolio worth a million.

US multi-billionaire investor Warren Buffett reckons America’s S&P 500 index has delivered compound annual gains running at just over 10% since the 1960s. If I can replicate that rate of return, it would take around 29 years to build an investment of £497 a month into a pot worth a million.

Buffett’s own record over the same period is almost double that 10% average annual return. But, of course, there are no guarantees I can match Buffett’s performance or that of the S&P 500.

Nevertheless, those ISA millionaires have clearly performed well. But most played the long game because the process of compounding can lead to bigger gains over time.

Another important factor is careful business selection. That means doing plenty of initial research before buying any particular stock.

Like most investors, I keep my best ideas on a watch list and aim to execute the purchase of shares at opportune moments. For example, right now I like the look of Bakkavor (LSE: BAKK).

Trading well and improving

The company is a UK-based provider of fresh prepared food in the UK, US and China, which it supplies to supermarkets and other outlets.

Trading has been going well and the progress reflects in the share-price chart.

September’s half-year report shows more progress with the numbers. The outlook statement declares the directors are “confident” the firm will deliver profit ahead of expectations for 2024.

Meanwhile, City analysts have pencilled in a 22% jump for normalised earnings this year and just over 10% for 2025.

I like the food sector for its defensive characteristics. Firms like Bakkavor are often less affected by the ups and downs of the economy than some others. Nevertheless, the stock comes with its risks.

The economic shocks of the past few years have caused the business difficulties and that shows in the poor multi-year earnings record. Part of the problem is the operating margin is quite low, running at about 4.9%. It’s possible challenges may continue over the coming years.

Nevertheless, chief executive Mike Edwards said restructuring activity is supporting the company’s 2024 performance. The directors are focused on rebuilding margins and they are “excited” about developing a stronger business as general economic conditions improve.

On balance, and despite the risks, I’d research and consider Bakkavor for inclusion in a diversified long-term portfolio now. After all, with the share price in the ballpark of 152p, the forward-looking dividend yield for 2025 is a tasty 5.4%.

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Let’s take a look at whether I could still buy some shares today to help boost my holdings.

Britvic

The soft-drinks producer has seen its shares rise a mammoth 50% in 2024 to date from 840p at the start, to current levels of 1,262p. I reckon a big part of this ascent has been two failed bids from drinks giant Carlsberg as part of a takeover bid.

Over a 12-month period, the shares are up 49% from 846p at this time last year, to current levels.

There is every chance that another bid could be incoming, and existing shareholders could be compensated handsomely. Alternatively, there is a chance that this may not happen.

In the case of the latter, there’s a good investment case for an established business with an excellent track record of growth, return, and a dominant market position. A dividend yield of 2.6% at present is decent. However, I do understand that dividends are never guaranteed, and past performance is never a guarantee of the future.

The one issue I have when considering buying some shares now is Britvic’s lofty valuation. The shares now trade on a price-to-earnings ratio of 20. Is this because of the takeover bid? I think so. Could the shares plummet if any future bids aren’t successful? This is a possibility.

At present I’m going to sit on the sidelines and watch how things develop. However, I must admit, I’m a fan of the business.

Bakkavor

Bakkavor is a fresh-food producer of items such as pasta, pizza, salads, and more. It has experienced a resurgence in 2024 to date.

The shares are up a huge 81% from 81p at the start of the year, to current levels of 147p. Over a 12-month period, they’re up 58% from 93p at this point last year, to current levels.

Bakkavor looks like a good business to me. It is capitalising on a burgeoning sector, as we lead increasingly busier lives. Plus, it has a wide presence, operating in lucrative segments including the UK, US, and China.

I reckon the shares took off after a positive update for 2023 released in March. The key takeaways from the report for me were that revenue, profit, free cash flow, and dividend-per-share all increased compared to 2022. Plus, net debt decreased. In addition to this, a Q1 update in May also made for positive reading.

From an investment perspective, the shares offer a forward dividend yield of 6.6%. Plus, analysts reckon this could grow. However, I do understand that forecasts don’t always come to fruition.

Taking a look at the valuation, Bakkavor shares trade on a price-to-earnings ratio of just 15, which still looks decent to me.

From a bearish view, inflationary pressures could put a dent in profit margins and potential returns. There’s clear evidence in the firm’s past track record of external events, such as a pandemic or geopolitical conflicts, impacting earnings and returns.

At this point, I’d buy Bakkavor shares when I next have some funds to invest.

The post These 2 FTSE 250 stocks are flying, but am I too late to the party? appeared first on The Motley Fool UK.

To me, the UK’s mid-cap index looks like a good hunting ground for stock-pickers.

A slick operator storming back

For example, I like the look of Bakkavor (LSE: BAKK). The company’s engaged in the markets for providing freshly-prepared food in the UK, US, and China.

We’re talking about stuff such as fresh-made meals, artisanal breads, soups, sauces, hummus, dips, burritos, pizzas, salads and desserts.

Reading the reports from the company, my feeling is that this is a slick organisation focused on building growth in its operations.

The company reckons it leverages consumer insights and scale to provide “innovative” food that offers “quality, choice, convenience, and freshness”.

Operations span some 44 sites. The business uses that network to supply more than 3,000 products to leading grocery retailers in the UK and US, and international food brands in China.

It’s been difficult for the firm to maintain its level of net profit through the past few years because of all the general economic challenges.

However, in 2023, revenue, profits and earnings came storming back and City analysts expect further advances this year and next.

Growing shareholder dividends

Alongside resurgent earnings, the shareholder dividend looks set to rise by around 8% and 6% in 2024 and 2025 respectively.

One of the attractive features of this company is it’s modest-looking valuation. With the share price near 122p (8 May), the forward-looking dividend yield is a juicy 6.6% or so for 2025.

Perhaps the share price has some room to catch up with resurgent vitality in the business:

In March’s full-year report for 2023, the company said it’s building foundations for future profitable growth.

However, there was a note of caution. The consumer environment’s improving but still remains challenging. Therefore, the directors expect subdued volumes leading to revenue growth of just 1-2% in 2024.

Nonetheless, City analysts expect earnings to increase by just over 5% this year and by more than 11% in 2025.

Vulnerable to general economic turbulence

However, the volatility in the multi-year record for profits and earnings shows the business is vulnerable to the effects of general economic shocks.

So if we get any more wars in Europe, pandemics, supply-chain difficulties, or energy price challenges, the company’s growth estimates may go out the window. It’s even possible for investors to lose money on the shares, despite the attractive-looking valuation.

There’s also a fair chunk of debt on the balance sheet to keep an eye on, although the firm’s been doing a good job of gradually reducing its level of borrowings.

Overall, I like the growth story here and the valuation isn’t outrageous. Indeed, that chunky dividend yield could come in handy while shareholders wait for further growth to materialise in the business.

I see Bakkavor as well worth further and deeper research now with a view to picking up a few of the shares to hold in a diversified portfolio.

The post Are FTSE 250 shares still a bargain? appeared first on The Motley Fool UK.

These businesses typically have proven and sustainable business models, along with robust balance sheets. Such qualities are conducive to regular (and often growing) dividends, and in many cases dividend yields that blow most other stocks (in the UK and overseas) out of the water.

With 350 companies to choose from between these indexes, it can be tough to choose which ones to buy today. However, WPP (LSE:WPP) and Bakkavor Group (LSE:BAKK) are two big-yielding dividend stocks that have caught my eye.

As you can see from the table below, their dividend yields for the current year sail past the average of both indexes.

Dividends can never be guaranteed. But if broker forecasts prove correct, a £20,000 investment distributed equally across these shares could provide a £1,200 second income this year.

Here’s why I think they’re top dividend stocks to consider today.

Advertising ace

WPP is the world’s largest advertising company but it has suffered more recently as economic weakness has hammered advertising revenues. It’s hoped that conditions will improve as interest rates fall later this year. But the scale of any rate cuts in the US and UK remains the subject of much speculation.

Yet despite this uncertainty, the FTSE 100 firm is tipped to continue paying a large (albeit reduced) dividend. This is thanks to the company’s robust balance sheet: its adjusted net debt to EBITDA ratio stood at a healthy 1.8 times as of December.

I’m confident that WPP will be able to get back to growing dividends once current weakness in its markets passes. I’m especially encouraged by the huge investment the company is making to digitalise its operations, which includes a growing focus on artificial intelligence (AI).

Dividend cover of 2.3 times provides WPP’s dividend forecasts for this year with added strength.

Fabulous foodie

Fresh food manufacturer Bakkavor continues to rebound following the end of Covid-19 lockdowns. During 2023, like-for-like sales rose an impressive 5.3% as prices increased along with volumes in China. This pushed adjusted operating profit 5.5% higher.

As with WPP, earnings at this company are sensitive to conditions in the broader economy. On top of this, a rise in ingredient costs can have a significant impact on profits.

But on balance, I believe the long-term future of this FTSE 250 share looks extremely bright. With people living increasingly busy lives, demand for the salads, pizzas, desserts, and other pre-prepared meals are likely to grow in popularity.

Fortune Business Insights analysts, for instance, think this market will grow at an annualised rate of 7.02% through to 2032.

Bakkavor’s has a strong balance sheet to help it capitalise on this opportunity, with leverage of just 1.5 times. This should also help it to continue paying market-beating dividends.

The post 2 dividend shares that could deliver a £1,200 passive income! appeared first on The Motley Fool UK.

Here’s why!

Fashion

Famous for its distinctive check design, luxury international fashion brand Burberry doesn’t need much more of an introduction, if you ask me.

The shares haven’t had the best time recently, down 45% over a 12-month period. At this time last year they were trading for 2,295p, and they currently trade for 1,254p.

Burberry has been hit by economic volatility amid the slowdown in sales of luxury goods across the globe. Continued volatility for a prolonged period is a real threat to any potential dividends, as they aren’t guaranteed. The business recently announced a profit warning, which isn’t a good sign, although expected, considering the current economic outlook.

However, looking forward to greener pastures, snapping up Burberry shares at current levels could be a shrewd move. They currently trade on a price-to-earnings ratio of 10, which is cheap, in my view, and at a level not seen for some time. Plus, a dividend yield of 5% looks well covered for now.

In addition to this, future forecasts of £4bn in revenues and operating margins of 20% mean the P/E ratio could drop as low as five! However, I’m aware forecasts don’t always come to fruition.

Overall, Burberry is a classic case of a stock with some short-term pain at present, before likely long-term gain, especially when it comes to returns and growth.

Food

Leading provider of freshly prepared ready meals such as salads, frozen pizza, pasta, and more, Bakkavor is a stock I’d love to buy myself when I next can.

Over a 12-month period, the shares are down just 2%, which isn’t too bad, considering how markets have fared in the past year. They’ve dropped from 105p at this time last year, to current levels of 102p currently.

The obvious risks for me are weakened consumer spending across the freshly prepared meals sector. This is linked to tighter budgets, and consumers potentially opting for cheaper alternatives. Plus, higher costs could take a bite out of Bakkavor’s bottom line, which underpin returns.

Conversely, the rate at which the ready-to-eat sector is growing could represent great growth opportunities for Bakkavor. I’m especially buoyed by the firm’s forays and heavy investment into the US and Chinese markets. The latter especially seems to be reaping huge rewards already based on recent trading updates.

Bakkavor’s fundamentals look good to me. The shares look good value for money, trading on a price-to-earnings ratio of 10. An enticing yield of 7.3% would help boost any passive income stream too.

The signs are positive for Bakkavor, if you ask me. Plus, as we lead busier lives than ever, quick, easy meals should only help the firm grow its performance and returns in the future. Furthermore, I reckon the food industry provides an element of defensive ability. After all, we all need to eat.

Similarly to Burberry, Bakkavor has some shorter-term headwinds to navigate, but I’m not overly worried about these. The future looks bright, in my opinion.

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Getting my ducks in order

To turbocharge my savings going forward, I’d want to follow a strict investing plan. To begin with, I’d want to create free funds to invest. This means I’d likely cut back on expenses, or see how I could boost my short-term income, to provide money at the end of each month.

I accept this is easier said than done, but it’s the first step I’d need to take. With the surplus money, each month I’d pick my favourite dividend stock and buy it. Over the course of a year, I would have built up a diversified portfolio, which I could then build on going forward.

Finally, when I receive the dividends from the firms, I’d reinvest this back into the market. This means the cash isn’t sitting idle. Rather, it will enable my returns to compound at a faster rate in the years to come.

A great example

One stock I’d include within the first year is Bakkavor Group (LSE:BAKK). Even though the stock is down 14% over the past year, it has been strong recently following the release of a trading update.

Ahead of the full-year results next month, revenue for last year gives me a good early indicator. It was up 5.3% on a like-for-like basis globally. The company’s Chinese market in particular had a strong rebound, with revenue up 32% versus the previous year.

Profits are expected to be in line with the guidance provided by the company, which bodes well for the dividend this year. At present the yield is 7.65%, already at an attractive level. I don’t see this being under threat anytime soon.

The US market is a bit concerning, with revenue dropping by 8.4% in that region. The business says this is part of a shift from revenue to profit growth. I sort of see where the firm is coming from, but to grow profits you need to start with good revenue. This is a risk going forward.

Diversifying the portfolio

Bakkavor Group is a food producer that trades globally. As part of aiming to grow my dividend portfolio, I’d add in stocks around it that are relatively uncorrelated. For example, I’d consider adding a utility company such as Pennon Group (6.52% dividend yield currently). I’d also look at getting exposure to property, such as via Londonmetric Property (5.20% dividend yield).

Over time, the diversified nature of the portfolio should enable my dividend income to be more reliable. If one sector struggles, another sector could be outperforming and make up for it.

The post No savings at 45? I’d use these dividend stocks to turbocharge it appeared first on The Motley Fool UK.

Freshly prepared food

Bakkavor is a leading provider of freshly prepared food and ready meals such as frozen pizzas, salads, pastas, and more.

So what’s happening with the Bakkavor share price? As I write, the shares are trading for 95p. At this time last year, they were trading for 113p, which is a 15% decrease over a 12-month period.

Macroeconomic volatility hasn’t been kind to most stocks, and Bakkavor has been impacted, if you ask me.

My investment case

Covering the bearish aspects first, continued turbulence is something I’ll keep an eye on. This is because weakened consumer spending could dent Bakkavor’s performance and could hurt investor returns and growth plans in turn.

In addition to this, Bakkavor is at the mercy of increased costs and potential shipping issues with current geopolitical events. Rising costs could hurt profit margins and shipping issues could dent its growth aspirations in the US and China, two potentially lucrative markets it is targeting.

So to my bull case then. The ready-to-eat food market is growing rapidly. This is in part due to the increasingly busy lives we lead and ease of prepared foods. I know I’m guilty of indulging in such options when I’m busy! This trend could boost Bakkavor, especially as it looks to grow its profile and presence.

Next, Bakkavor’s growth plans are exciting, in my view. Forays and heavy investment into the US and China could pay off handsomely in the longer term, and boost the shares and payouts. In fact, there are already signs it is making headway in both markets.

In its pre-full-year trading update released last month for the year ended 30 December 2023, Bakkavor said like-for-like revenue growth across the group would come in at 5.3%. However, in China alone, it reported growth of 32%.

On the other hand, performance in the US wasn’t as good as China, or its core market, the UK. However, the business did pre-warn about this as it continues to invest in this territory and explained it may take some time for this market to bear fruit so it wasn’t an unexpected result. Profit is set to come in at the upper end of expectations. I’ll be watching out for full results next month.

Finally, a dividend yield of 8% is significantly higher than the FTSE 100 and FTSE 250 averages of 3.8% and 2%. However, I’m conscious that dividends are never guaranteed. Plus, the shares look decent value for money to me right now on a price-to-earnings ratio of 15.

Final thoughts

Overall Bakkavor looks to me like a solid business at present with exciting growth prospects too. Plus, as it operates in the food sector – and a growing segment at that – the business has a sense of defensive ability about it, in my view. After all, everyone needs to eat!

There are short to medium-term headwinds the firm must navigate. However, I’m confident that the firm is well placed to overcome volatility, and continue to grow and provide consistent returns to investors.

The post 1 FTSE 250 stock with an 8% yield I’d buy and hold for 10 years! appeared first on The Motley Fool UK.