Job hunting

I’m talking about PageGroup (LSE:PAGE). The business is a well-known specialist professional recruitment firm that helps companies hire staff across a range of sectors and regions. It’s a simple business model, with the company getting paid recruitment fees for placing successful candidates in roles.

Over the past year, the stock is down 37%. This is due to a few factors right now. Hiring markets are subdued, with reasons being cited including economic and geopolitical uncertainty. The firm has cut significant headcount among recruiters to reduce costs and adapt to weaker demand. While this helps the cost base, it also reflects reduced business activity and confidence.

From a financial perspective, things haven’t been great either. Last month, the quarterly update showed gross profit down by 4.6% versus the same period last year. However, the interim dividend from last year was held at the same amount as the prior year, so income investors haven’t seen any change yet.

Dividend forecasts

The total dividend per share from the past year was 17.11p. Using the current share price, this gives a dividend yield of 8.16%. Looking ahead, the total dividend for this year is forecasted to be 17.53p, with 2027 expected to rise further to 17.97p. If this proves to be correct, and the share price stays the same, the yield could rise to 8.56%.

Some might be sceptical that the dividend can rise based on the difficulties over the past year. Even though there are risks going forward, there are reasons to be positive for the outlook. For example, the business is growing well internationally. Last quarter was the fifth consecutive one of growth in the US market, with Asia also recording a third consecutive quarter of growth. If this continues, profits from these areas can offset weaker geographies.

Further, even though cost-cutting makes the company smaller, it’ll make it more financially streamlined. With an estimated £15m worth of cost savings from this year, it should help the dividend to be protected as profits should stabilise due to the lower costs.

Making a call

The fall in the share price over the past year has acted to artificially boost the dividend yield. That’s not a great sign. However, I think the worst of the troubles is behind us now, so I agree that the dividend payouts can be continued. Yet it’s a high-risk play in my book, so I believe it should only be considered by investors who are happy with the risks.

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Right now, PageGroup (LSE:PAGE) currently has the 18th-largest yield in the UK growth index, at 7.5%. This indicates that for every £1,000 invested, the shares will generate £75 in annual passive income – more than double the £33 offered by FTSE 250 index funds right now.

So is this dividend stock an income trap? Or could it be one of the rare exceptions that goes on to generate stellar returns? Let’s explore.

What happened to the shares?

As a quick crash course, PageGroup’s a global recruitment and staffing enterprise. And in oversimplified terms, the business makes its money by charging fees to employers for finding and placing talent across entry-level, all the way to executive-level positions.

The last few years have been a rough time for its shareholders. Since hitting record profitability following the post-pandemic hiring boom, hiring activity has since slowed to a crawl as wider economic uncertainty, particularly surrounding inflation, crept in.

The impact on its financials wasn’t subtle. In 2021, the firm’s operating profit surged to £168.5m. Skip ahead to 2025, and its earnings are on track to hit £21.1m. And with that, it’s unsurprising that PageGroup shares have fallen close to 70% over the same time period.

A hidden buying opportunity?

As we enter 2026, the wider economic landscape continues to be challenging, with hiring activity remaining subdued. Yet there’s room for optimism. As management seeks to minimise costs through this market down cycle, £5m of efficiencies were delivered in 2025, with another £15m expected by the end of 2026.

Meanwhile, there are some early signs of a potential market recovery. During the fourth quarter of 2025, gross profits from North America climbed by 3% while Asia grew 7%, with India seeing some of the strongest growth at 17%.

Around half of the group’s gross profits stem from Europe and the Middle East, which continue to suffer from a weaker hiring environment. But should these trends stabilise, or better yet, reverse, the company could enjoy a rapid upward earnings inflection triggering a wider share price recovery.

Risk versus reward

While the prospect of a rapid recovery alongside a chunky dividend yield is undeniably exciting, it’s important to recognise that the challenges surrounding PageGroup aren’t over.

As of 2026, there remains no clear catalyst to trigger a wider European recovery, with countries like France experiencing particularly tough business conditions. The UK isn’t much better, with higher National Insurance contributions and Minimum Wage increases deterring businesses from hiring new staff.

Consequently, even with cost-saving initiatives starting to bear fruit, the company’s still paying out more in dividends than it’s bringing in. And with its net cash reserves steadily shrinking, there’s a real and significant risk of a potential dividend cut if a wider European recovery fails to materialise in time.

That’s why, without more recovery progress, I’m not rushing to buy the shares right now, especially since there are other high-yield dividend stocks that look far less risky to me in 2026.

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The 2024 year was a tough one across the sector. PageGroup reported “worsening sentiment and reduced confidence in Europe during the second half of the year“. But the company still lifted its dividend by 4.5%, “reflecting confidence in our strategy“. The dividend wasn’t covered by earnings per share (EPS). But if the 63% EPS drop really is a one-off, that might not be a problem.

What might be a problem however, is the 2025 outlook being “uncertain due to increasingly unpredictable economic environment“. In a Q1 update in April, PageGroup said “the slower end to Q4 2024 continued into Q1 2025“.

I think I’ll wait until I see how things look at the 2025 halfway stage. But if the dividend holds, I think it’ll be one to consider as a long-term buy.

Overlooked cash cow?

A 34% share price fall over the past five years has pushed the forecast dividend yield at MONY Group (LSE: MONY) up to 6.3%. That might not be so great if earnings were falling at the same time. But EPS has actually been growing in the past few years, and analysts expect the trend to continue.

Forecasts suggest a price-to-earnings (P/E) ratio of 12.5, dropping to 10.5 by 2027. So I think what we’re looking at is a justified correction to a stock price that had been getting a bit overheated.

Predicted dividend cover looks maybe a bit thin in the next few years, at around 1.3 times. And that has to put the dividend outlook under some pressure. Still, at FT results time for 2024, the company, formerly known as Moneysupermarket.com, announced a £30m share buyback reflecting its “strong cash generation and robust financial position“.

The business faces intense competition. And we’re still under the collective hammer of high interest rates and economic turmoil. But I think long-term dividend investors could do well to think about it.

Business property

I’m turning to real estate investment trusts (REITs) now. And the 40% share price fall at Workspace Group (LSE: WKP) catches my eye. The company lets office space across London. So I can see why the past few high-inflation years have taken their toll.

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.

At the moment, interest rates aren’t helping. Especially not with the company reporting net debt of £847m at the end of the third quarter in December. But there seems to be no liquidity problem, with £233m in cash and undrawn facilities on the books.

I think the company could be in a strong position when interest rates come down, hopefully on two fronts. It should lower future borrowing costs, and give boosts to clients’ businesses.

Ongoing economic uncertainty could be the biggest drawback here. We should have full-year results on 5 June, and I fear we could still see some strong headwinds. But investors with confidence in the expected 6.6% dividend yield might take a closer look at buying in advance.

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In its latest results released this Wednesday (9 April), it reported an 11.7% drop in gross profit, down from £220m to £194.2m. The EMEA region was hit the hardest, down 14.5%, with the UK dipping 12.7% and America down 1.1%.

The company noted the unpredictable economic environment that could make 2025 a difficult year. As a result, it didn’t provide any forward-looking guidance at this time. However, it does plan to implement cost savings of £15m by simplifying its management structure and reducing the workforce by 25%.

Page Group’s earnings have been in decline for several years now, slipping from £139m in 2022 to £28.4m last year. While revenue has also dropped, it’s done so at a slower rate, bringing the company’s net margin down to a worrying 1.39%.

Notably, earnings in the US increased 7% due to higher demand in the engineering and manufacturing sectors.

A dividend play?

Page Group has a long history of dividend growth, barring an understandable cut during Covid. Global lockdowns led to an almost complete cessation of recruitment operations during that period.

However, in 2021, dividends were reinstated at 15p per share and have since increased to 17.11p. Overall, its annual dividends have increased at a compound annual growth rate of 5.2% a year. I would expect that growth to continue — unless more lockdowns occur, of course.

After the price dip, the yield’s up to 7%, making the stock an attractive option for income investors. However, if the price keeps falling, it may negate any dividend gains.

What’s the likelihood of that happening? 

Valuation

Along with the falling price, Page Group’s price-to-earnings (P/E) ratio has also dipped by around 25%. However, now at 29.6, it’s still well above the FTSE 100 average of 11.4. At 9.63, its price-to-cash flow (P/CF) ratio is also slightly above average. These metrics indicate that, despite the falling price, the stock could still be somewhat overvalued.

Subsequently, there’s a fair chance the price may dip lower before stabilising or recovering. But analysts remain optimistic in the long term, with the average 12-month forecast 380p — a 44% rise. The current economic situation is dire but will likely stabilise and improve by next year. If the company can maintain its dividends through it all, it could deliver decent value to shareholders in the long run.

However, I’m not convinced enough to consider the stock just yet. Looking at other similar stocks on the FTSE 250, I’d consider price comparison company MONY Group to have better potential. It has a 6.5% yield and a P/E ratio of only 12.45. Specialist manufacturer Morgan Advanced Materials also looks promising, with a 6.6% yield and P/E ratio of 10.5.

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Billionaire investor Warren Buffett loves such situations.

There’s no way I’m claiming to possess his investing prowess. But bargain valuations attract me, so let’s look at this morning’s car-crash second-quarter trading update from the FTSE 250‘s PageGroup (LSE: PAGE), the specialist recruitment consultancy company.

The market saw this coming

Before getting into the figures — and they are grim — it’s worth noting the share price has held up quite well, so far:

Dyed-in-the-wool value investor Anthony Bolton (one-time Fidelity fund manager) once said his first port of call for any potential value situation was always the charts. He wanted to know how early or late he was discovering the story.

In the case of PageGroup, I reckon the lack of a precipitous plunge today means the market was expecting the news. It might also mean the valuation of the company is already where it needs to be.

After all, near 400p, the stock is down around 18% since May. So the market probably saw it all coming.

In the second quarter of 2024, gross profit dropped by 12% year on year. The outcome was driven by a “softening” of activity levels in most of the firm’s markets around the world.

However, the company held the shareholder dividend. On top of that, the directors intend to “broadly” maintain the head-count of fee earners in anticipation of business recovery… eventually.

Chief executive Nicholas Kirk said the company had already reduced staff numbers throughout last year — times have been tough for a while. However, Kirk thinks the business is now “well placed” to take advantage of opportunities as sentiment and confidence improve.

In the meantime, Kirk believes PageGroup will perform well despite the challenging environment.  

Challenged by cyclicality

One of the main risks is that the business and the sector are both cyclical. It’s normal to see ebbing and flowing of revenues, earnings, and cash flows.

But what’s unknown is the depth of this down-cycle. It’s possible that poor trading could continue or even worsen from where things are now. The dividend’s been held for the time being, but it’s been cut before and could be axed again in the future.

Equally, business could turn up again soon, or perhaps flat-line. After all, today’s poor figures are historical and not a reliable guide to future performance.

Nonetheless, City analysts predict an earnings recovery in 2025 and ongoing progress with the dividend. Set against those expectations, the forward-looking earnings multiple is just below 14 and the anticipated dividend yield is almost 6%.

At first glance, that valuation looks attractive. However, the share price first reached current levels around 17 years ago. Dividends have come and gone and come again during that time. Cyclicality in the business has driven a lacklustre long-term outcome for shareholders.

My expectation is for more of the same over the next decade or so. For that reason, although I’m tempted by the valuation, I reckon there are better value and dividend stocks to consider for my Stocks and Shares ISA.

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With this in mind here are two top dividend stocks I’m aiming to buy with cash to spare. Both trade on rock-bottom earnings multiples. They also carry dividend yields north of 9%.

Pagegroup

Recruitment businesses like Pagegroup (LSE: PAGE) are incredibly cyclical. This means there’s a big danger earnings could sink in the near term as the global economy cools.

This doesn’t mean I wouldn’t buy the business for my portfolio this November though. Encouragingly, profits here continue to soar despite worsening macroeconomic conditions.

Furthermore, the recruiter offers eye-popping value for money right now. It trades on a forward price-to-earnings (P/E) ratio of 10.1 times and boasts a 9.1% dividend yield.

Pagegroup’s third-quarter gross profits soared 18.6% year on year, during which time it delivered record performances in nine markets. A strong US dollar also helped results, a factor that should continue to provide support going forward.

As a dividend investor I also like Pagegroup for its rock-solid balance sheet. This naturally gives it more firepower with which to raise dividends and pay special ones. Net cash leapt to £186m as of September.

Sylvania Platinum

Falling car sales pose a danger to platinum group metal (PGM) producers like Sylvania Platinum (LSE: SLP). Around 40% of platinum demand comes from the auto sector where it is used in catalytic converters.

However, environmental factors mean PGM demand looks set to grow strongly over the long term. Increasing amounts of platinum and palladium are being required to cut harmful emissions from cars and trucks.

The demand for platinum is also expected to grow strongly if green hydrogen becomes a popular alternative fuel. The metal is a key catalyst in the production of the gas.

I like Sylvania in particular because of its impressive production record. Third-quarter output hit 19,194 ounces, the highest level since the Covid-19 lockdowns. From the end of this year, its expanded Tweefontein plant will begin contributing additional output as well.

I’m also a fan because of the company’s exceptionally low cost base. This provides it with extra protection when commodity prices come under pressure. It also gives the company extra cash with which to pay market-beating dividends.

Today, Sylvania Platinum boasts a 9% forward dividend yield. Furthermore, this year’s payout is well covered by anticipated earnings. Dividend coverage sits at 2.5 times, well inside the benchmark target of 2 times and above.

At current prices, Sylvania also trades on an ultra-low P/E ratio of just 3.9 times. I think this, combined with that huge dividend yield, makes the business too cheap to ignore.

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However, over the last year, I’ve decided to look closer at the possibility of growth investing. There are opportunities within the FTSE 250 index that allow a reasonable level of stability and security, while producing higher returns than possible via value investing. Therefore I’ve tried to combine my previous strategy for finding value investments and apply it to the growth sector.

My growth investing strategy

What makes a good value or income investment is often clear-cut and can be seen by looking at underlying fundamentals. But a growth investment can sometimes feel a lot more complex due to the need for faith in a performance that isn’t predicted by the fundamentals. I have to hope the company’s performance will catch up and exceed the current share price.

It’s also important to note that finding the right opportunity within the growth arena can take time and effort. This sector is known for having much higher price-to-earnings (P/E) ratios and a lack of stable income. It can even sometimes have a complete lack of profitability. Despite this, I use a specifically designed growth investment filter to identify promising opportunities that also include strong underlying fundamentals.

New opportunity

A prime example of what I’m after is PageGroup (LSE: PAGE), a UK-based recruitment consultant. The stock has struggled this year, down 28.7%. This has come on the back of a very strong 2021, where it rose almost 42%. Consequently, it’s trading with a P/E ratio of 12.2, which is forecast to be just 10 in 2023. This is extremely low for a traditional growth company, however, the broader earnings forecasts do fit the typical growth model.

In 2023 turnover is expected to grow by 21.8%, and earnings per share (EPS) are forecast to increase by 21.7%. These are very impressive increases and would typically warrant paying a premium. Furthermore, the company has strong profit margins and extremely high levels of return on capital employed (ROCE). These are good signs and help illustrate the company’s underlying quality and core growth characteristics.

The full picture

The company even offers a dividend of 3.3%, which is quite unusual for a growth stock. In fact, this yield is forecast to reach 4.2% next year. However, it’s important to note that this dividend was cut in 2020, indicating that it isn’t hugely reliable from an income perspective.

Furthermore, cash generation is acceptable but not hugely significant. This is worth monitoring as it will make future dividend payments less likely if it drops. Finally, the company’s earnings suffered a lot in 2020, and it swung to an operating loss, although it saw a strong recovery in 2021 and appeared to be back on track.

Nonetheless, I believe that PageGroup is a unique opportunity to add a company with both growth and value characteristics to my portfolio. I’ll aim to add the share to my portfolio in the next few weeks, ready for 2023.

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Recruitment business

Pagegroup is an international recruitment business with over 8,000 employees spread across 37 countries. Formed in 1976, it has grown into an industry leader and continues to target expansion. It is split into four core brands and recruits across 25 main disciplines including technology, finance, legal, and HR.

So what’s happening with Pagegroup shares currently? Well, as I write, they’re trading for 375p. At this time last year, the stock was trading for 635p, which is a 40% drop over a 12-month period.

To buy or not to buy?

Let’s take a look at some pros and cons of me buying Pagegroup shares.

FOR: I’m buoyed by Pagegroup’s recent performance. I am aware that past performance is not a guarantee of the future. However, looking back, it has recorded consistent revenue and profit for the past four years. More recently, it released a half-year report last week for the period ended 30 June 2022. I noticed that revenue and profit increased by 27% and 33% respectively compared to the same period last year. The interim dividend was higher than last year. Furthermore, Pagegroup announced a special dividend to reward shareholders. At present, the shares’ dividend yield stands at a mighty 11%. I do understand that dividends can be cancelled, however.

AGAINST: Due to current economic volatility and soaring inflation, confidence in business is falling. Businesses may need to cut costs, which could include hiring freezes. This could impact demand for Pagegroup’s services, and hinder performance and returns.

FOR: On the other side of the coin from potential hiring freezes due to volatility, there is a general shortage of candidates for relevant roles across many sectors throughout the world, especially in developed economies like the UK. This could see Pagegroup experience a rise in demand for its services, and boost performance. In addition to this, the shares look good value for money right now on a price-to-earnings ratio of just seven.

AGAINST: Recruitment is a saturated marketplace. Many firms, of all shapes, sizes, and profiles are vying to fill the same roles and have the best candidates on their books. I will keep an eye on competitors to see how they are performing against Pagegroup.

A passive income stock I will continue to monitor

Taking everything into account, I like the look of Pagegroup shares. It is a global business with a great track record as well as good recent performance. The shares also look good value for money.

What’s putting me off is the current economic volatility and the uncertainty that comes with it. This is the reason I will keep Pagegroup shares on my watch list for now and monitor developments.

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Rising interest rates

NatWest (LSE:NWG) shares are currently trading at 258p and they’re up 25% in the last three months.

The banking firm declared a total dividend of 16.8p on 29 July. At the time of writing, this results in a dividend yield of around 6.42%.

The company is currently benefiting from rising interest rates in the UK that are now set at 1.75%. These may only move higher, as the Bank of England seeks to control inflation, which is over 10%.

Rising interest rates generally mean that banks can charge more for loans and mortgages, so that could be good news for NatWest. 

This was visible in its results for the six months to 30 June, when the business reported higher-than-expected pre-tax profits of £2.6bn. The consensus was £2.2bn and the result for the same period in 2021 was £2.3bn.

On the flip side, rising rates may be a deterrent for future customers who don’t wish to take on more debt amid the cost-of-living crisis.

Overall though, NatWest expects full-year revenue to grow 25% compared to last year.

A return to shopping centres

Second, Hammerson (LSE:HMSO) recently declared an interim dividend of 2p per share. At the current share price of 24p, this results in a dividend yield of about 7.62%.

It’s worth noting though, that dividend policies can be subject to change in the future.

The shopping centre and real estate investment firm was battered during the pandemic and the share price slumped to just over 4p.   

For the six months to 30 June however, earnings rose by 154% to £51m. Furthermore, there was a 25% fall in net finance costs, which should place the company on a better financial footing. 

Despite this, there’s always the threat that further pandemic variants have a detrimental impact on Hammerson’s operations. In addition, online shopping may negatively affect the business.

Overall though, the group’s portfolio value increased to £5.3bn, with an annual return of 2.1%. 

Greater hiring

Finally, PageGroup (LSE:PAGE) declared an interim dividend of 31.62p per share, which equates to a dividend yield of 7.01%. At the time of writing, the shares are trading at 446p.

The recruitment consultancy firm has reported solid pre-tax profits for the past five years, while reporting a £114.5m pre-tax profit for the six months to 30 June. This was an 80% increase year on year.

Furthermore, revenue grew to £977m. These financial results give me confidence as a potential investor, but I’m always aware that past growth doesn’t necessarily indicate future growth. 

However, it cautioned about a new trend of slowing recruitment by companies as many have reduced their hiring capacity due to economic conditions. 

Despite this, the business stated that it had benefited from wage inflation, because it had received greater fees per hire on average. 

Overall, these three big dividend companies may provide interesting opportunities for income. As such, I’ll add all three to my portfolio soon.

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Vistry Group (8.1% dividend yield)

Demand for homes is beginning to slip as the Bank of England hikes interest rates. According to the Royal Institution of Chartered Surveyors (RICS), 25% of estate agencies saw fewer enquiries in July.

But, pleasingly for housebuilders like Vistry Group (LSE: VTY), property values continue to soar. The same RICS survey showed that 63% of agents saw prices rise, well above the long-term average of 13%.

And the consensus among respondents was that home prices will be higher a year from now too.

Rising interest rates pose a threat to the likes of Vistry. But, so far, businesses like this continue to trade robustly. This is because of a huge shortage of housing stock that I’m confident will remain in place for years to come. And in particular it should support robust demand for new-build homes.

Vistry enjoyed an 11% improvement in its average weekly private sales rate between January and June. I think the company’s big forward dividend yield and P/E ratio of 6.2 times make it a top value stock to buy.

PageGroup (8% dividend yield)

PageGroup (LSE: PAGE) is another FTSE 250 stock whose ordinary dividend yield smashes the 2.7% index average.

Business confidence is tanking across the globe as inflationary pressures rise. This, in turn, poses a significant danger to recruiters such as this. But this is a threat I think is priced into PageGroup’s current price. Like Vistry, it trades on a sub-10 P/E ratio, at 9.7 times.

Extreme candidate shortages mean the recruitment sector actually continues to thrive. PageGroup announced this week that revenues and pre-tax profits soared 28% and 80% respectively during the January-June period.

Trading is so strong that the business hiked the interim dividend and announced plans for a special dividend earlier this week. I’m very tempted to buy this bargain today.

ITV (6.9% dividend yield)

My final high-dividend stock today is ITV (LSE: ITV). The broadcaster’s fallen a long way in 2022 after exiting the FTSE 100 last September. But I think it’s a top buy despite the threat that a weakening advertising industry poses to profits.

On top of that massive dividend yield, ITV trades on a rock-bottom P/E ratio of 5.5 times. As a long-term investor, I find this value hard to ignore.

You see, I’m expecting the huge investment the FTSE 250 new boy is making across the business to deliver massive returns. It is splashing the cash on its ITV Studios arm to turn it into a global production powerhouse. And it is building its position in the lucrative streaming market with initiatives like its soon-to-be-launched ITV X platform.

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