It isn’t. For anyone with a Stocks and Shares ISA and a long enough runway, it’s a realistic destination.

The maths is straightforward. A £1m portfolio yielding 6% annually produces £60,000 in income — £5,000 a month, tax-free inside an ISA. The 6% is achievable; plenty of high-quality UK dividend stocks yield at or above that level right now — however, it does introduce a level of risk that you may not experience closer to 4%.

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.

The £1m is the harder part — but not as hard as it sounds.

There are currently around 4,000 Stocks and Shares ISA millionaires in the UK. That’s a small number relative to the millions of ISA holders, but it’s growing, and there’s nothing especially unusual about the people who get there. They started early, contributed regularly, and let compounding do the work.

How long does it take? At £1,000 a month, assuming 10% annualised returns (roughly in line with long-run equity averages), a portfolio crosses the £1m mark in around 25 years. Contribute £1,500 a month and that falls to around 20.

These aren’t aggressive assumptions — personally, for instance, my portfolio is almost three times larger today than it was two years ago when we moved house (when I needed to dip into my ISA for the first time).

However, 10% is the kind of returns a broad equity portfolio has historically delivered over long periods. The enemy is starting late, stopping early, or keeping the money in cash.

In short, the path to £5,000 a month in passive income starts now. It’s about accumulation. Build the pot first. Deploy it into income-generating assets second.

Where to invest?

So what should investors actually buy?

A winning portfolio is often a diversified one. My portfolio has been successful in recent years with 20 investments plus bond holdings.

And one stock I continue to have faith in is Melrose Industries (LSE:MRO).

Melrose supplies advanced components to every major aerospace original equipment manufacturer in both civil and defence markets — and crucially, many of those positions are sole source (roughly 70%).

When an engine or airframe is certified with a Melrose part, that part stays in for the product cycle. That means decades of recurring revenue as the installed base flies on.

That’s the same structural advantage that commands a premium multiple at Rolls-Royce. Yet Melrose trades on a forward price-to-earnings of around 13.5 times — less than half what the market awards Rolls. I think that gap is too wide, and as Melrose’s earnings trajectory becomes clearer to the market, I expect it to narrow.

The risk worth acknowledging is tariff exposure. Melrose has significant US manufacturing and supply chain activity, and any escalation in trade policy could pressure margins or complicate customer relationships.

That said, I certainly believe this stock is worth considering.

The post Fancy £5,000 of monthly passive income? It’s possible… appeared first on The Motley Fool UK.

Parent of tier-one defence and aerospace supplier GKN Aerospace, Melrose is a critical supplier to the global defence ecosystem. This provides it with strong structural demand, long‑term revenue visibility, robust pricing power, and clear geopolitical support.

But the market is still pricing it as the old, lower‑margin business it was before it refocused on aerospace, with a major defence slant.

So, how much can investors make from that price-to-valuation gap now?

How’s its valuation compared to peers?

A good starting point to assess Melrose’s valuation is a comparison with its direct competitors.

On the key price-to-earnings measure, its ratio of 17 is the second lowest of these firms, which average 30.3. The companies are Safran at 16.2, BAE Systems at 31.9, GE Aerospace at 34.5, and RTX at 38.6. So, it is deeply undervalued on this basis.

The same is true of its price-to-sales ratio of 1.7 — bottom of its peer group, which averages 3.9. And it also looks a bargain on its 2.2 price-to-book ratio compared to its competitors’ average of 8.3.

What’s it really worth?

Discounted cash flow (DCF) analysis identifies where a stock should trade by projecting future cash flows for the underlying business and ‘discounting’ them back to today.

Analysts’ DCF modelling varies — some more bullish than mine, others more cautious — depending on the variables used. However, based on my DCF assumptions — including an 8.5% discount rate — Melrose shares are 54% undervalued at their current £5.27 price. So the fair value is around £11.46, according to my model.

Asset prices can trade towards their fair value in the long run. If those DCF assumptions hold, this suggests a potentially superb buying opportunity to consider today.

What’ll drive earnings higher from here?

Its 2025 annual results saw adjusted operating profit soar 20% year on year to £647m. This highlighted that the shift towards higher‑margin aerospace programmes is already boosting profitability. With defence‑linked engine components continuing to scale, that margin expansion looks set to continue.

Revenue in its key Engines division jumped 15% to £1.63bn, underlining strong long‑term demand across key platforms, including the F‑35 and next‑generation fighter engine families. It gives the business a multi‑year pathway of volume growth that should support rising earnings ahead.

And free cash flow saw a £199m improvement to a £125m inflow. The turnaround demonstrated how restructuring costs are falling away and operational efficiencies are bedding in. Management expects this to accelerate as the group targets stronger cash conversion through 2028/29.

A risk here is any major failure in one of its key products that could be expensive to remedy. Another is any supply-chain delays that could restrain production momentum.

Even so, these growth factors show a business with rising profitability, improving cash generation, and a clearer strategic runway than the market is currently pricing in.

My investment view

I already hold shares in BAE Systems and Rolls-Royce, so owning another in the sector would unsettle the risk-reward balance of my portfolio.

However, for investors without this problem, I believe Melrose looks a great business to consider, at a bargain price.

The post Down 23% to around £5! Here’s why this overlooked FTSE 100 defence gem ‘should’ be trading over £11 appeared first on The Motley Fool UK.

The thing is, everyone knows Rolls-Royce. And that’s probably down to the car brand they don’t own.

But not everyone knows Melrose Industries (LSE:MRO). It’s a different company, same script.

Pure-play aerospace

Melrose has spent recent years shedding automotive and other non-core divisions to emerge as a focused aerospace supplier, making advanced components and systems for all major original equipment manufacturers. These include Boeing, Airbus, GE, and Safran. That’s a great list of customers.

The business spans civil and defence markets. Crucially, it holds sole source positions across much of its business — around 70%.

What’s more, these are long-term, often exclusive supply agreements for specific parts on specific aircraft. Once embedded on a programme, Melrose is typically there for the life of that aircraft — often 25-30 years.

The revenue is recurring — the switching costs are enormous, and the barriers to entry are high. It’s exactly the kind of quality business with an embedded structural competitive advantage that made Rolls-Royce so rewarding for patient investors.

The turnaround in numbers

In 2022, Melrose reported an operating loss of £246m on a margin of -8.33%. Full-year 2025 results showed operating profit of £600m and an operating margin of 16.72%. Normalised EPS hit 33.1p last year — up 70% — pointing to the company trading at 16 times earnings.

The dividend’s growing at 20% a year. And the 16 analysts covering the stock have a consensus price target of 693p — more than 30% above today’s price of around 515p.

On an earnings basis, there’s cause to argue it’s still undervalued. Rolls trades at more than double Melrose’s forward price-to-earnings (P/E) of just 13.2 times. The price-to-eanrings-to-growth (PEG) ratio of 0.9 is vastly discounted versus many other aerospace/industrial stocks.

The bottom line

Of course, there are risks and concerns. Net debt’s risen to £1.74bn and free cashflow’s only just turning positive. The balance sheet leaves limited room for error if civil aviation demand softens or defence programme timing slips. This is a genuine risk and worth watching closely.

However, the shares are down 22% from their 52-week high, caught in the broader turbulence of the year. For long-term investors, the combination of sole source positions, a transformed margin profile, and the prospect of strong earnings growth from this valuation makes it well worth considering.

And honestly, I wouldn’t be surprised to see it push towards all-time highs later this year, especially if the conflict in the Gulf comes to an end and interest rates continue to push downward.

The post The next Rolls-Royce? This FTSE 100 turnaround story appears overlooked appeared first on The Motley Fool UK.

These numbers are testament to a business that has been genuinely transformed under CEO Tufan Erginbilgiç. The long-term story — growing demand with civil aviation, the defence spending boom, and an expanding power systems division — remains highly attractive.

The issue however, is the price. At 30 times forward earnings and a price-to-earnings-to-growth (PEG) ratio over two, it’s by no means cheap. The risk is simple. If execution stumbles at all, that multiple compresses fast.

For new investors, the risk/reward may look a little stretched. The company still offers a huge amount, including in nuclear technologies, but the meaningful undervaluation isn’t there.

Something much cheaper

Melrose Industries (LSE:MRO) provides exposure to the same aerospace upcycle, but at a much lower valuation. Down 28% from its 52-week high, the stock trades at just 12.4 times forward earnings with a PEG ratio of 0.9, suggesting the market’s paying very little for what is forecast to be 16% forward earnings growth.

One key operational highlight here is that Melrose holds a sole-source position for 70% of its produced components. This means there’s no alternative supplier. That creates genuine pricing power and sticky, recurring revenue as the global fleet expands and ages.

The risk worth watching is the balance sheet, with net debt sitting a little ahead of where you’d want to see it. Currency fluctuations are also something to keep an eye on.

Hidden in plain sight

I think many Britons don’t realise that they can invest in Airbus. It’s a household brand and perhaps the most straightforward quality case of the three.

As one half of a global commercial aviation duopoly, Airbus has pricing power on a generational scale. Its order backlog stretches years into the future and revenue is forecasted to grow from €73bn in 2025 to over €100bn by 2028.

The earnings forecast — largely curated before the outbreak of war — is on a clear upward trajectory from €6.60 to €10.77 over the same period. On 2027 numbers, the stock trades on just 18 times earnings.

That’s a huge discount to Rolls. It also offers a 2.1% dividend yield and a has a rock-solid balance sheet with €12.2bn in net cash.

The main risk is operational. Airbus has struggled to ramp production rates to meet demand, and the supply chain has been problematic. Tariff exposure on transatlantic trade is also worth monitoring.

However, the valuation cushion is substantial, as is the moat.

All three companies are worth considering for long-term investors. But Rolls-Royce, for all its quality, asks investors to pay a premium price for a premium business. Melrose and Airbus, by contrast, offer a lot of the same at a considerably more attractive entry point.

The post I like Rolls-Royce shares but not the price tag. Here are 2 cheaper alternatives appeared first on The Motley Fool UK.

For long-term investors with cash at the ready, market weakness might actually be an opportunity rather than a reason for caution. Here are two UK-listed names I think deserve a close look.

UK aerospace

Melrose (LSE:MRO) is absolutely worth paying closer attention to. Many investors may not even realise that it’s a FTSE 100 company.

Spun out as a pure-play aerospace components business, the company holds a sole-source position for 70% of the products it produces. That means customers simply can’t go elsewhere. It’s genuine pricing power.

The business is currently undergoing a transformation and cash flow has just turned positive — something management called an inflection point. EPS grew nearly 70% in 2025 and is forecast to grow a further 14% in 2026 and 23% in 2027 — yet the shares trade on just 12.4 times forward earnings with a price-to-earnings-to-growth ratio of 0.9.

It’s not just me however. The stock’s down 28% from its 52-week high, and the analyst consensus price target sits more than 40% above the current price.

A risk to flag is the balance sheet. Net debt stands at £1.74bn. That’s manageable while aerospace demand holds up, but it does mean Melrose has less room for error than some investors might like.

A Georgian bank

TBC Bank‘s (LSE:TBCG) even less well-known but arguably more interesting from a valuation standpoint. It’s a Georgian bank — a dominant retail lender in one of Europe’s fastest-growing economies — with expanding operations in Uzbekistan.

The headline numbers are super-strong. The forward price-to-earnings is just 4.9 times.There’s a PEG ratio of 0.4 and a dividend yield of 7.37%, backed by a cover of 2.76 times and growing at a compound annual rate of over 17%. Revenue’s grown at nearly 25% annually over recent years, and return on equity sits at 23.8%.

What’s more, TBC’s largely insulated from the risks that started impacting Western banks in February — concerns about AI-driven white-collar job losses, mortgage stress, falling consumer confidence. Georgia and Uzbekistan are growing economies driven by demographics and rising consumer spending rather than knowledge-economy employment.

As with every investment, there are risks. Geopolitical exposure in the Caucasus, proximity to a war zone, Georgian lari currency fluctuations, and relatively thin analyst coverage with only four brokers following the stock.

Personally, I think these are all baked into the price.

My take

Neither of these is a guaranteed winner — no stock ever is. However, they’re two quality companies currently trading at a discount to fair value. I think they’re both worth considering.

The post These 2 UK stocks look cheap ahead of the ISA deadline appeared first on The Motley Fool UK.

You don’t need a large lump sum either. Most platforms allow monthly contributions from as little as £25, meaning you can begin building wealth at whatever pace suits your budget. Once your ISA is open, you can invest in thousands of stocks, funds, and investment trusts — all sheltered from capital gains tax and income tax, year after year.

The annual allowance is £20,000 and, crucially, any unused portion cannot be carried forward.

That’s why acting before the 5 April deadline matters so much. Every tax year you sit on the sidelines is a year of tax-free compounding you can never get back.

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.

Starting in choppy waters

Of course, you can put money inside a Stocks and Shares ISA before 5 April and not actually buy anything. However, I’m personally finding opportunities in the current madness.

Markets have been jittery since the conflict erupted in the Gulf, and many high-quality stocks have fallen sharply in recent weeks. For long-term investors though, this kind of pullback is less a cause for alarm and more an invitation.

In short, when great businesses go on sale, patient investors pay attention.

What’s more, the long-term picture — rising global demand for technology, defence, travel, and industrial innovation — remains very much intact. And those are some of the themes that influence my investing.

Some of my favourite stocks have taken a hit: Nvidia and Credo Technology are down amid broader tech sector nerves; Airbus and Melrose (LSE:MRO) are feeling the pressure of macro uncertainty and fewer flying hours; Jet2, the UK’s top tour operator, has slipped back on higher fuel prices.

But none of these businesses have fundamentally changed and their growth prospects are largely the same. I believe that buying quality at a discount is precisely the kind of move that builds serious long-term wealth.

A Rolls-Royce alternative

Melrose is a stock I really like. I’m a fan of industrials and aerospace stocks. Melrose has some similarities to Rolls-Royce of four years ago. The company’s undergoing a restructuring, but the underlying business is unbelievably strong.

What do I mean by unbelievably strong? Well, Melrose makes components for aircraft engines and aircraft structures. Its components feature on around 90% of the world’s commercial aircraft, and it is the sole source supplier for 70% of the programmes it works on — meaning there’s literally no one else who can make what they make.

It’s currently trading around 12.5 times forward earnings with a price-to-earnings-to-growth (PEG) ratio around 0.9. That’s a fraction of the valuation afforded to Rolls-Royce, which is a segment peer.

Risks? Well, every company has them. In the near term, it’s worth considering currency fluctuations as Melrose earns the majority of its income in US dollars. More broadly, it’s also worth recognising that the company is less diversified than it used to be — now be purely aerospace and defence.

Nonetheless, I think this one is well worth considering.

The post Want a £1m Stocks and Shares ISA? Step 1 starts before 5 April appeared first on The Motley Fool UK.

And right now, I think the market is missing it.

It’s rarely been cheaper

The numbers speak for themselves. Melrose currently trades at around 12.4 times forward earnings. That’s not remarkable in isolation — but pair it with a price-to-earnings-to-growth (PEG) ratio of just 0.9, and the picture changes. A PEG below one generally suggests a stock is undervalued relative to its growth prospects.

But context matters, and industry averages differ depending on things like long-term structural growth trends.

So, compare that to Rolls-Royce, which is trading at 34 times forward earnings with a PEG above two, and Melrose starts to look like a genuine bargain hiding in plain sight.

Recent weakness in the share price stems from two things: a revenue guidance miss for FY26 (lower than the market expected) and broader jitters around the conflict in Iran.

Neither, in my view, justifies the scale of the reaction — the stock was cheap even before February. Analysts agree with the average share price target sitting 41% above the current share price.

Importantly, the company recently confirmed that free cash flow has turned positive after a multi-year transformation programme.

Management called this an inflection point, and the market is already pricing in further improvements ahead. That’s a meaningful milestone for a business rebuilt from the ground up.

This is what a quality stock is all about

If you’re not familiar with Melrose, it designs, manufactures, and maintains components for aircraft engines and airframes.

The engine of Melrose’s long-term case is civil aerospace, which accounts for around 65% of revenues. The rest is military.

But the business model isn’t just about selling components, the company holds long-term engine partnership agreements that lock in recurring aftermarket revenue each time an engine goes in for overhaul.

For me, civil aviation is a strong long-term growth market with the global middle class growing steadily, compounding trends such as the inelasticity of demand for leisure travel.

Defence adds another angle. Airframe revenues in that segment rose 15% in 2025, riding a structural uplift in global defence budgets that shows few signs of easing.

Across both commercial and military markets, Melrose has exposure to roughly 90% of engines globally. Most importantly, it holds sole-source positions on around 70% of its products. That’s a real sign of quality and a competitive moat that translates into genuine pricing power over the long run.

Like everything, however, there are risks worth watching. A prolonged conflict in the Middle East coupled with higher oil prices will likely mean fewer planes in the air and lower overhaul requirements in the near term. For all involved, let’s hope that it comes to a conclusion soon.

The bottom line

At current prices, Melrose looks like one of the more attractively valued growth stocks in the FTSE 100.

A low PEG ratio, a cash flow inflection, and long-duration structural support make for a very compelling combination. I absolutely believe investors should consider this stock.

The post Correction territory: the FTSE 100’s best bargain right now could be… appeared first on The Motley Fool UK.

Yet even after the FTSE 100 delivered exceptional returns in 2025, there are still plenty of buying opportunities to take advantage of in 2026. And among these potential winners stands Melrose Industries (LSE:MRO).

Despite delivering exceptional performance last year and even surpassing its own targets, the aerospace enterprise remains priced far below its peers. And the latest institutional forecasts suggest that, even after more than doubling since September 2022, the shares could be up to 54% undervalued right now!

Hidden growth potential

Melrose has spent the last few years transitioning from an industrial turnaround specialist into a pure-play aerospace components manufacturer.

This evolution introduced a lot of complexities into the firm’s financial statements. But last year, the transition was completed. And what’s emerged is a highly profitable, free cash flow-generating machine, on track to deliver even more revenue, earnings, margin, and free cash flow growth between now and 2029.

Even in 2025, Melrose has already achieved staggering results. Its flagship Engines segment has bolstered operating margins to 31.9% – one of the highest in Europe.

Yet with aftermarket service demand rising rapidly, alongside accelerated build rate targets from aircraft manufacturers such as Airbus and Boeing, even more margin expansion is expected. And these tailwinds are only being amplified by the new defence spending supercycle across Europe.

As such, the latest projections from institutional analysts indicate that Melrose shares could climb as high as 830p over the next 12 months. That’s 54% higher than where the stock trades today – enough to transform £10,000 into £15,400.

But if that’s the case, why’s the stock so cheap?

Where’s the risk?

As previously mentioned, Melrose’s financials are complicated. And one item that has some investors on edge is something called ‘variable consideration’ (VC).

In over-simplified terms, this essentially represents revenue that Melrose has already recognised on its income statement, but hasn’t actually received in cash yet.

The VC comes from the group’s complex long-term engine partnership agreements. The problem is, while this cash flow is expected to eventually materialise, it opens the door to potential future impairment charges if an engine project is cancelled, delayed, or renegotiated. And it’s this uncertainty that’s primarily keeping Melrose in cheap stock territory.

So where does that leave investors?

The verdict

VC’s definitely something investors need to watch carefully. However, as engine projects mature, this part of the revenue stream’s expected to shrink over time as the gap between reported revenues and cash flow closes.

As this happens, the uncertainty surrounding Melrose is organically lifted, enabling a steady multi-year bull run in the process. That obviously isn’t guaranteed, especially if the concerns surrounding VC prove justified.

But with Melrose shares trading at a significant discounted price, that’s a risk I’m taking. And this isn’t the only cheap stock in the FTSE 100 that I’ve got my eye on right now…

The post This FTSE 100 stock has more than doubled… and it’s still cheap! appeared first on The Motley Fool UK.

With rising geopolitical tensions and a US push for Europe to rapidly increase its defence spending, defence contractors and suppliers have enjoyed enormous new order tailwinds. And investors have gone on to earn impressive returns:

• Rolls-Royce – up 98%.
• BAE Systems – up 51%.
• Babcock International – up 106%.
• Serco Group – up 84%.

But the question now is, are defence stocks still among the best shares to buy in 2026?

More growth potential?

Splitting £10,000 equally across these four defence stocks a year ago is now worth roughly £18,475 today before counting dividends. But if someone were to invest £10,000 today, what can they expect to have a year from now?

Institutional analysts have been asking the same question. And after analysing the new growth tailwinds these businesses are aiming to capitalise on, they’ve published a range of share price forecasts.

It’s clear that the experts think there’s more growth on the horizon. And if these projections prove accurate, then this defence basket could deliver a solid 17% average return by this time next year, turning £10,000 into £11,700.

However, it’s important to recognise that forecasts are never guaranteed. And investors could be left disappointed with weaker results if a surprise spanner, like supply chain disruptions, is thrown into the works.

Nevertheless, a 17% potential gain is certainly nothing to scoff at. And it’s why I decided to take a closer look at this sector, discovering something potentially even more promising.

A hidden opportunity

With most institutional investors focused on the biggest names in defence, relatively little attention has been given to Melrose Industries (LSE:MRO). The industrial turnaround specialist turned aerospace pureplay has undergone a multi-year transformation that has deterred a lot of investors due to the complexity of its accounting.

But with the restructuring now nearing completion, this complexity is beginning to fade away. And the emerging business is showing tremendous promise, in my eyes. Revenues are steadily accelerating by double-digits, underlying profits are following suit, and free cash flow is back in the black for the first time in years.

Yet this may just be the tip of the iceberg.

By 2029, free cash flow is projected to reach £600m, up from the £100m expected for 2025. At the same time, the group’s £3.5bn estimated revenue for 2025 is also expected to reach as high as £5bn over the next three years.  

These are certainly some ambitious targets. And they will require management to demonstrate impressive diligence and execution not just in terms of driving growth, but unlocking efficiencies as well – something that’s far easier said than done.

But if it can deliver, some of the latest forecasts are projecting Melrose shares to climb to as high as 840p. That’s roughly 25% higher than where the stock’s trading today, offering more growth potential versus its other aerospace & defence peers.

That’s why I think it could be a far better share for me to buy right now, and why I’ve already added it to my portfolio.

The post Defence stocks continue to soar! Are they still some of the best shares to buy? appeared first on The Motley Fool UK.

A handful of stocks appear mis-priced relative to their earnings recovery and medium-term growth outlooks. And these are simply the stocks I know best.

Let’s explore.

Marks and Spencer

Marks and Spencer (LSE:MKS) has started 2026 positively after strong Christmas trading, yet the share price remains well below its 2025 highs. The reason is a cyberattack in April, which severely disrupted operations and forced analysts to downgrade earnings expectations for FY2026.

At one stage, consensus EPS forecasts stood near 31p. Today, they sit closer to 23.2p. But with the financial year drawing to a close, attention is shifting to recovery. Forecast earnings per share for FY2027 are 34.1p, putting the shares on just 10 times forward earnings.

To me that looks very cheap relative to its peers. It’s trading, adjusted for net debt, around 25% cheaper than its grocery peers. While net debt of £2.5bn may appear large in isolation, it is modest relative to the group’s market capitalisation and cash-generation potential.

Risks remain, of course. It’s a premium brand — at least perception says so — and if consumer spending weakens again, Marks could lose out to cheaper peers.

However, no investment is risk-free. Brokers are bullish too, with the average share price target 25% above the current position.

TBC Bank

TBC Bank (LSE:TBCG) is another share that stands out. This FTSE 250 stock trades at just 4.9 times forward earnings. But analysts expect revenue growth of around 17% and earnings growth of 11% across the next two years, placing it among the fastest-growing stocks in the FTSE All-Share.

The bank experienced a pullback in 2025 as regulatory changes engendered a operational shift, but this appears transitional rather than structural.

Operating across two of Eurasia’s faster-growing economies, TBC benefits from strong net interest margins and expanding digital reach. All four analysts covering the stock rate it’s a Strong Buy, and it also offers a dividend yield of roughly 6%.

Risks? Well, geopolitics is worth considering given ongoing unrest in Iran, which could have knock-on effects across the broader Caucasus and Caspian region.

However, I’m still very bullish on this company.

Melrose Industries

Finally, Melrose Industries (LSE:MRO) offers a compelling growth-at-a-reasonable-price opportunity. The group operates within aerospace and defence, with around 70% of sales coming from sole-source positions. That gives it huge pricing power.

The shares trade on about 16 times forward earnings, but earnings are forecast to grow by more than 20% per year through to 2029. That implies a price-to-earnings-to-growth (PEG) ratio comfortably below one.

Execution risk remains, particularly around supply chains. However, compared with peers like Rolls-Royce, Melrose looks significantly undervalued on a growth-adjusted basis.

The bottom line

Individually, each stock carries risk. However, coupled with other favourites of mine Jet2 and Arbuthnot, I believe these five stocks could deliver double-digit growth this year. That’s why I believe they’re all worth considering.

The post I’d back these FTSE stocks will deliver double-digit growth in 2026 appeared first on The Motley Fool UK.