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.

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As an investor, I’m always hunting for winning opportunities. So let’s take a look at which businesses are leading the charge this year.

Top 10 FTSE 250 stocks in H1 2024

Combined, these top 10 stocks have delivered an average return of 50.7% over the last six months. Needless to say, that’s quite impressive. And for those fortunate enough to own this collection of enterprises, a pat on the back’s definitely warranted.

However, just because these businesses have performed admirably so far this year, doesn’t mean the second half of 2024 will be as lucrative. After all, these surface-level figures provide no insight into what’s actually driving them. And in some cases, the catalyst may only be temporary. Let’s take a closer look at one stock.

Inspecting Britvic

Over the last decade, Britvic’s been a stellar performer. And as one of the earliest picks in our Share Advisor premium service, investors have enjoyed more than a 500% return since July 2012, thanks largely to dividends.

The impressive performance seen so far this year certainly looks like its impressive track record’s continuing. However, on closer inspection, shareholders may have seen the end of the road. That’s because this year’s tremendous performance isn’t being driven by the underlying company but rather by a takeover bid from Carlsberg Group.

So far, management’s rejected two bids from the brewery giant. That’s given a strong signal to investors where it believes the firm’s value lies. But it also encourages Carlsberg to come in and offer more money if it wants to complete the takeover.

Assuming this strategy’s successful, Britvic shareholders may soon be getting a lovely payday. So does it make sense to snap up some shares today before this takeover happens? In my opinion, no.

There are a few things to consider. Carlsberg’s under no obligation to continue pursuing Britvic. The company’s likely trying to capitalise on weak market valuations to get itself a terrific deal. But if it can’t get the price it wants, the takeover may simply not happen. But even if it does, unless the firm comes back with a significantly higher offer, the majority of gains from a takeover already appear baked into Britvic’s share price.

In other words, such an investment may fail to generate a meaningful return. And it may even lead to losses should a deal fail to emerge and the share price slide again. All of this is to say that when exploring winning stocks for potential opportunities, investors need to closely scrutinise each prospect.

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This soft drinks giant, known for popular brands like Robinsons and J2O, has been making waves in the market. But is it the refreshing addition my portfolio needs, or could a potential takeover change the equation? Let’s dive in and take a closer look.

Market fizz

The shares have been bubbling up nicely, with an impressive 38.6% return over the past year. This significantly outperformed both its industry peers in the UK Beverage sector (which saw a 20.8% decline) and the broader UK market (which returned 5.8%). The recent takeover speculation has given the shares an additional boost, surging 10% on the day the approaches were made public.

Dividend income

The firm currently offers a dividend yield of 2.7%. While this might not be the highest yield on the market, it’s certainly nothing to scoff at in the current environment. What’s more, the company’s pay-out ratio stands at a reasonable 62%, suggesting there’s a decent amount of room for future dividend growth without putting undue strain on the company’s finances.

However, it’s worth noting that the company has an unstable dividend track record. Although not alone in disruption to supply chains over the last few years, this could be a potential red flag for investors seeking reliability in their passive income streams.

The valuation

According to a Discounted Cash Flow (DCF) calculation, the shares are currently trading at 36.3% below the estimated fair value. Although this isn’t a guarantee, when I see a company with some momentum, and plenty of potential growth ahead, I definitely want to take a closer look.

Carlsberg’s latest offer of 1,250p per share values the company at £3.1bn, representing a premium of about 29% to the share price before rumours emerged. However, the board believes this “significantly undervalues” the company.

Takeover considerations

The potential takeover adds an interesting dynamic to the investment case. On one hand, it could lead to a higher offer price, potentially providing a quick gain for current shareholders. Carlsberg sees “appealing long-term growth opportunities” in the firm’s portfolio.

On the other hand, a takeover would mean the end of the stock as a viable dividend investment. This could be disappointing for those seeking long-term passive income.

Next steps

Despite the uncertainty, I feel like there are reasons for optimism. Analysts forecast earnings growth of 12.5% per year, which could support future dividend increases and movement in the share price. The company’s international expansion and focus on healthier drink options could also drive growth in the coming years as consumer demands change.

So while Britvic might not have the highest-yielding dividend on the market, it offers an intriguing mix of growth, potential undervaluation, and passive income. For investors willing to accept some risk, Britvic could indeed be a refreshing addition to a portfolio. I’ll be adding it to my watchlist for now, keeping a close eye on how the situation develops.

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Past performance is no guide to the future, especially over the short term. So I’m approaching Moonpig Group (LSE: MOON) with caution. Its shares have rebounded 24.94% in the last month. That’s a fabulous result, but all that matters today is where they go next.

Growth opportunities

The Moonpig share price is up 20.55% over one year, but that follows a rocky ride for the online greetings card supplier whose shares plunged by two-thirds after listing in February 2021.

The mood changed on 28 June when it posted a 6.6% increase in full-year revenues to £341.1m, with pre-tax profits up nearly 33% to £46.4m. Its subscription service Moonpig Plus, which offers discounted cards and perks for £9.99 annually, exceeded expectations with half a million members in a year.

Broker Berenberg has praised the group’s technology-led strategy and hiked its price target from 265p to 280p. Today, it trades at around 192p. That’s a potential rise of 38% from here. With consumers likely to start feeling better off, it could continue to grow. Trading at 14.72 times earnings, the stock isn’t expensive. I’m tempted to buy before more investors wake up to its recovery, but recent volatility makes me wary.

XPS Pensions Group (LSE: XPS) only joined the FTSE 250 last month but it’s going great guns, up 23.95% in a month. Over one year, it’s up a blockbuster 76.22%. It’s pricier than Moonpig, trading at 19.26 times earnings.

It’s also got a lift from a positive set of results, reporting on 20 June that group revenue jumped 21% last year to £196.6m.

XPS is the biggest pensions consultancy in Britain. It should benefit as the population gets older and starts worrying about retirement. In contrast to Moonpig, it pays dividends, with a current trailing yield of 3.07%. That’s pretty impressive, given its stellar share price growth. Better still, the board hiked last year’s payout by 19%.

Time to buy?

One risk is that it has grown quickly through acquisitions, which don’t always add value. They have so far, though. I like Moonpig, but I like XPS more.

Soft drinks firm Britvic (LSE: BVIC) was the FTSE 250’s third best performer over the last month, up 23.66%. A £3.1bn takeover proposal by Danish brewer Carlsberg has put some fizz into the stock, which has now climbed 42.02% over 12 months.

The board has so far rejected two proposals, one at 1,200p per share and another at 1,250p. Today, the shares trade at 1,216p.

Top Britvic shareholder Aviva reckons Carlsberg needs to go higher. It says it hasn’t factored in the anticipated improvement in Britvic’s finances. Today, the £2.98bn group trades at 19.84 times earnings.

Personally, I never buy on takeover talk. There is too much uncertainty, plus a risk the share price will flop if it falls through. XPS is firmly on my radar and I’ll look to buy once the excitement over its results ebbs. Then I’ll take a second look at Moonpig.

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Saying no to another bid

The news out today was the rejection of a takeover bid from Carlsberg. The cash offer was 1,250p per share, which was 21% higher than where the stock closed yesterday. This was a second bid from the company, which had made a lower offer at the start of the month.

Time will tell whether Carlsberg makes another offer. But the news tells me a couple of really key investing points.

One is that other businesses think Britvic is cheap right now at the current valuation. If this wasn’t the case, takeover bids wouldn’t be coming in at a premium to the current price. The second is that there’s clear long-term demand for Britvic’s products. The soft drinks firm owns 39 different brands, trading all around the world. If there wasn’t a clear vision ahead, again, there wouldn’t be as much interest in buying it.

What the rejection tells me

At the moment, several FTSE 250 and FTSE 100 companies are in the process of being bought. In fact, earlier this week I wrote about Hargreaves Lansdown. The FTSE 100 firm is likely to be acquired by a private equity group.

I didn’t see the value in investing there, simply because the deal looks pretty well done. There’s limited movement for the share price from here. However, this isn’t the case for Britvic.

The rally in the share price today, despite the offer being rejected, shows me that investors feel the company can thrive by itself. Yet it also shows me that the stock is potentially undervalued and that the stock is playing catch-up to get to a fair price.

True, a third and better offer might be coming further down the line. But I don’t see this as a massive risk. If I buy the stock now and no offer comes, I like the fundamentals of the business anyway. If an offer gets accepted, it’ll be at a premium to what I pay for it now, so I won’t lose money.

To be clear, I’m not buying the stock simply hoping for some quick profits from a deal. Rather, the rejected offer flags up to me that this is a business that a lot of people are interested in right now.

Bringing it all together

Britvic does come with risks. The 2023 results showed revenue up 6.6% versus 2022, but pre-tax profit fell to £156.8m from £175.1m the year before. This was blamed partly on the poor weather, which shows how the business can be negatively impacted by external factors.

On balance, I’m really interested in buying Britvic shares and am thinking about doing so imminently.

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On 21 June, the company confirmed a bid from Carlsberg at a price of 1,250p per share.

The bid was made on 11 June, and came after a previous offer from the same bidder at 1,200p on 6 June. The share price gained a quick 15% when the news broke.

A bullish 2024

It follows a smaller rise the previous day, based on the speculation. And it comes not long after interim results in May gave it a boost.

In all, 2024 has been great so far for Britivic investors, with their stock up 39% since the start of the year.

How was this new bid received? The board says it “significantly undervalues Britvic and its current and future prospects“, and kicked it out.

The 1,250p bid was 23% ahead of the previous day’s close. But with the Britvic share price up 15% to 1,168p, at the time of writing, that premium has dropped to 7%.

What next?

We might see a further bid, though we really can’t know if any firm offer will be made. For its part, the Britivic board says it will “consider any further proposal on its merits“.

Clearly, quite a few investors have jumped on board already. Is that in the hope of a new bid and a quick profit? Or have these events made them realise Britvic shares are cheap, based on their long-term merits?

I’d like to think there’s more of the latter, though I suspect otherwise.

What should we do?

Those who think there’s a chance of a third bid from Carlsberg, or something from a new bidder, might need to move fast.

These things, once they’re out in the open, often tend to move quickly. There are rules, for one thing, that mean a bidder has a limited time to put up or shut up once their intentions are known.

For me though, that would be too much of a risk. I’ve no idea what will happen next, so betting on it would be a pure gamble.

Long-term value

Instead, I’d take a good look at the company and weigh up its long-term value. And if I think it’s a good one to consider buying and holding for a decade or more, it might go on my buy list.

But I wouldn’t buy until the takeover mood has faded, as I think the share price is very likely to fall should it become clear that no further bids are on the cards.

I know I’d miss any quick profit should someone stump up enough cash to buy out the stock. But that’s fine.

Valuation

First-half results looked upbeat all round. And forecasts show steady earnings and dividend growth in the next few years.

Beyond that, I haven’t done any more research yet. But that’s where I’d start.

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My reasoning’s pretty simple. Consistently rising cash returns tend to be indicative of a business in rude health. Those in the latter camp tend to be treading water.

Britvic

FTSE 250 firm Britvic (LSE: BVIC) is one of three stocks I’ll consider buying if and when funds becomes available. Although not completely immune from wider economic wobbles, the drinks industry tends to be more resilient, given that its low-ticket items tend to be bought out of habit.

Indeed, this degree of earning predictability has allowed the owner of brands such as Tango and Robinsons to keep throwing increasing amounts of money back at its investors nearly every year.

In 2024, the forecast yield currently stands at 3.4% — higher than that offered by the index as a whole.

Notwithstanding all this, one potential risk is that increasingly health-conscious consumers begin turning away from fizzy/sugary drinks. Lowers sales could effectively bring that run of annual rises to an end. At best, it might hinder the size of future hikes.

With this in mind, it seems prudent to spread my money around other stocks as well.

Bodycote

Some of that diversification could come from another FTSE stock that boasts solid dividend credentials, namely heat treatment processes provider Bodycote (LSE: BOY).

To be clear, a company that specialises in making metal “stronger, more durable, and more corrosion resistant” isn’t one that’s likely to ever grab the headlines.

Dividend-wise however, it’s just the sort of thing I’m looking for. We’re talking years and years of increases, not to mention the odd special payment along the way.

Currently, this trend shows every chance of continuing. Boasting a forecast yield not dissimilar to Britvic, Bodycote’s cash returns also look to be covered over twice by projected profit.

Then again, trading here’s arguably more cyclical, with demand from sectors such as energy, automotive and aerospace dictated by general economic sentiment.

Historically, Bodycote’s shown itself to be robust during such periods. But the future won’t necessarily mirror the past.

So what else could I buy (when funds permit) to help soften any blows?

Safestore

Last on my list is self-storage provider Safestore (LSE: SAFE). Again, Safestore operates in a completely different space to the other two mentioned here. This could make for a less volatile portfolio, at least in theory. As an investor, I also love the simplicity and predictability of a business plan that involves charging people to house their clutter.

On the other hand, it’s no secret that anything property-related has been in the doldrums for a while now. In line with this, Safestore’s share price has fallen 11% in the last 12 months. There’s a chance it could have further to fall if the Bank of England keeps delaying its first interest rate cut.

So long as I’m being paid to be patient however, any drop in the value of my stake isn’t likely to concern me. A 3.6% yield feels like decent compensation, especially as Safestore’s also gaining a reputation as a dividend grower par excellence.

And if/when the UK market does start motoring again, there could be a nice capital gain too.

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Let me illustrate how I could do that, as well as detail one pick that could help as part of a diversified portfolio.

A numbers game

On the surface of things, £10 a day may not sound like a lot of money. However, adding that up, I get an annual figure of £3,640. The magic of compounding can boost this.

Using a Stocks and Shares ISA as my investment method of choice, I’m going to invest for 25 years, and aim for an 8% rate of return.

There are two things to note. Firstly, this type of ISA is attractive as I don’t have to pay tax on capital gains and dividends. Next, 8% is the rate of return I’m hoping to achieve from the whole portfolio, which would consist of approximately five to 10 stocks.

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.

Before I dive into the numbers, it’s worth remembering that no matter which stocks I buy, dividends are never guaranteed. Plus, there’s no guarantee I’d generate an 8% return — it could be lower, hurting the income level I’m hoping to achieve. On the other hand, I could earn more than 8%.

Investing £10 a day – or £3,640 annually – for 25 years would leave me with £278,052. I’m going to draw down 5% annually, which equates to £13,902. Translating that to a weekly figure, I’d be left with £267 a week.

Drinks giant

One stock I’d love to buy to help me achieve the above would be soft drinks giant Britvic (LSE: BVIC).

As one of the largest businesses of its kind, the firm possesses excellent brand power, a loyal customer base, and a good track record too. Some of its best known brands include J2O, Robinsons, and Tango. Plus, it also possesses an exclusive and lucrative agreement with PepsiCo to bottle and distribute their products in the UK.

The shares have dropped 6% over a 12-month period from 916p at this time last year, to current levels of 861p.

Macroeconomic volatility has hurt the shares, but I see this as a positive for now, as it offers me a better entry point to snap up some shares. They trade on an attractive price-to-earnings ratio of just 13.

Taking a look at the rate of return, a dividend yield of just under 4% is enticing to me. I’m confident this could grow, in line with the business.

A shorter-term risk I must note is that of continued volatility hurting demand, sales, and performance. This is due to Britvic products being viewed as premium branded items. A cost-of-living crisis has led to consumers looking to make their budgets stretch further, and buy non-branded, cheaper essentials ranges.

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The investing strategy I’ve chosen to meet this goal is to build a portfolio of good quality dividend stocks, with attractive yields and long-term growth potential. My hope is that shares will provide a reliable dividend income that rises ahead of inflation.

In this piece, I’d like to discuss three FTSE 350 stocks that tick the boxes for me and might find a place in my portfolio, if I had cash to invest today.

A rising 8.8% yield

My first choice is already one of the larger positions in my personal portfolio. FTSE 100 financial services giant Legal & General Group (LSE: LGEN) provides retirement and life insurance services and has more than £1trn of assets under management.

Legal & General has been in business since 1836 and has a strong record of cash generation and dividend growth. The current shareholder payout of 20.3p per share has grown from 1.9p in 1994.

Dividends have only been cut once in the last 30 years, during the 2008/9 financial crisis.

Of course, there are no guarantees this record can be maintained. Legal & General is a complex business that’s hard for outside investors to analyse. Even so, the group’s large scale and long track record mean I’m quite comfortable putting my cash into L&G shares. I expect this to remain one of my larger holdings.

Much-loved brands

FTSE 250 soft drinks group Britvic (LSE: BVIC) is best known for brands such as Robinsons, Tango and Rockstar. What investors may not realise is that Britvic’s also the exclusive bottler and distributor for PepsiCo brands in the UK.

In addition to this, the company also has a faster-growing international business in Brazil, which is potentially a larger market than the UK.

One concern for me is that Britvic has slightly more debt than I’d really like to see. But the company’s defensive products are affordable treats that tend to generate very stable sales. So I don’t think debt’s a big risk here.

Shareholders have been rewarded by steady dividend growth since Britvic’s flotation in 2005. The stock’s current 3.9% yield looks fairly safe to me. I expect the dividend to continue rising over the coming years.

Powering the future

UK utility group National Grid (LSE: NG) is investing heavily to build out its electricity infrastructure to meet growing demand. Electric vehicles and the expansion of renewables are among the trends placing new pressures on the grid.

To make the most of this growth opportunity, the company’s now largely exited its slower-growing UK gas business. This has freed up capital and allows management to focus on its electricity operations.

Much of National Grid’s income is governed by the national regulator, so its returns should be fairly predictable. Of course, there will always be some uncertainty and risk, especially as UK utilities rely heavily on debt funding.

Even so, I expect National Grid’s 27-year record of dividend payments to remain safe for the foreseeable future. Broker forecasts suggest a yield of 5.7% for the year ended 31 March.

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Thankfully, there are many more resources available today, including The Motley Fool!

Speaking of investors starting out, two picks I reckon investors should consider for a starter portfolio are Unilever (LSE: ULVR) and Britvic (LSE: BVIC).

Here’s why!

Unilever

The business is one of the largest consumer goods firms in the world. Operating across the globe, it offers some of the most popular brands for all consumer needs. Think food, healthcare, hygiene, cleaning products, and more.

Unilever shares are down 5% over a 12-month period from 4,202p at this time last year, to current levels of 3,963p.

The recent pullback is an opportunity, if you ask me. The shares currently trade on a price-to-earnings ratio of 16. This is a level not seen for some time.

I reckon Unilever shares have fallen due to macroeconomic volatility. This includes rising interest rates, inflationary pressures, and a cost-of-living crisis. This is an ongoing risk I’ll keep an eye on. For example, rising costs can take a bite out of profit margins, which underpin returns.

Speaking of returns, a dividend yield just under 4% is attractive to help build an additional income stream. However, it’s worth remembering dividends are never guaranteed.

Despite a sticky patch at the moment, I reckon the cream eventually rises to the top. Unilever is certainly in that category. Its exceptional brand power, reach, and track record are hard to ignore. Plus, the business is changing its approach by disposing of lesser performing brands, and investing further into better ones. This could yield even better results and investor returns.

Britvic

As one of the largest soft drinks producers in the UK, Britvic is a great stock for returns and growth, if you ask me. As well as selling its own popular brands, it also has an exclusive and lucrative agreement with PepsiCo to bottle and distribute their products in the UK.

Like Unilever, Britvic shares have fallen over a 12-month period, in this case by 7%. At this time last year, they were trading for 876p, compared to current levels of 811p.

Britvic’s growth story to date is impressive, driven by organic and acquisition-led growth. However, the shares look very attractive on a price-to-earnings ratio of just 12 right now.

Next, Britivic shares offer a dividend yield of 3.8%, and looks well covered by a healthy balance sheet.

One risk I must note is that the firm’s drinks can be considered premium. The current cost-of-living crisis means consumers are looking for more bang for their buck, and may turn to unbranded essential ranges from supermarkets, or discount retailers. This could hurt performance and return levels.

I’d consider the current risk mentioned as short-term, whereas investing should be about long-term growth and returns, if you ask me. I think the pros outweigh the cons, including Britvic’s established track record, passive income, currently cheaper-than-usual shares, and brand power.

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