The Aston Martin Lagonda (LSE:AML) share price was doing what it does best today (27 February) — falling. The FTSE 250 stock is now down 42% in six months, 51% in one year, and 93% since the start of 2020. It’s an ongoing nightmare for shareholders in the luxury carmaker.

Yet the Aston brand remains iconic and the cars still possess the ability to lure eyes from smartphones in the street. We’ve seen how UK brand stocks can bounce back strongly once they hit rock bottom. Shares of Burberry, for example, are up 93% in less than six months.

Does this stock have the potential to produce the mother of all turnarounds? Let’s explore.

The British Ferrari?

The only other listed supercar maker comparable to Aston Martin is Ferrari. In fact, Aston Martin compared itself to the high-end Italian brand when it went public in 2018, saying it wanted to build a ‘British Ferrari’. It even hired the Prancing Horse’s former CEO, Amedeo Felisa, as its boss in 2022 (he has since left).

Ferrari’s current market cap is $90bn (approximately £71bn), while Aston Martin’s is just £803m. That means an £11,500 investment made today would become £1m if Aston Martin stock went up 8,740% to reach Ferrari’s £71bn market value.

What are the chances of that happening though? Slim to none, I’d say, looking at the latest annual report for 2024. The number of cars sold decreased 9% year on year to 6,030, leading to a 3% drop in revenue (£1.58bn). That was far below the 10,000 vehicles it had originally planned for the year.

The pre-tax loss increased 21% to £289m, while gross margin fell from 39.1% to 36.9%. Meanwhile, net debt widened to £1.16bn from £814m, with net financing expenses 47% higher at £190m. The balance sheet remains my biggest worry here.

The EV is on ice

One positive was that it managed to raise the average vehicle selling price to £245,000. Also, its first plug-in hybrid electric vehicle, Valhalla, is set to launch this year. The product isn’t the problem — it’s making them to sell at a profit that is proving so elusive.

Management is guiding for mid-single-digit percentage wholesale volume growth in 2025. Meanwhile, profitability should improve, partly as a result of a 5% reduction it its workforce. And it expects lower net interest payments of about £145m this year.

However, there’s not too much for shareholders to get excited about. Aston has even delayed plans for its first electric car (EV) till “the latter part of this decade“. That said, this looks sensible to me, as the firm just doesn’t have the financial firepower to manufacture and transition to EVs.

My move

At first glance, the market cap of £803m seems too low for a company like Aston Martin. And a price-to-sales ratio of 0.5 appears cheap.

However, as much as I’d love to see the company succeed, I just can’t bring myself to invest. The balance sheet worries me, as does the revolving door in the C-suite (five CEOs in five years!).

Looking ahead, I don’t see the company remaining public for many more years. I think it will be acquired or taken private. Either way, I’m not interested in buying shares.

There’s a lot to be said for companies that dish out more passive income to investors as each year passes, even if their dividend yields remain fairly average.

Any business that can do this shows the sort of reliability that many higher-yielding stocks lack, making the former an arguably less risky proposition.

With this in mind, I’ve picked out three examples from the FTSE 250 for Fools to ponder buying.

Uninterrupted growth

As a business, meat supplier Cranswick (LSE: CWK) isn’t remotely sexy. But it’s been a wonderful source of rising and uninterrupted dividends over the years. Even a global pandemic couldn’t stop management from returning more cash to shareholders.

A “record Christmas trading period” suggests this form shows no sign of ending. I also like how Cranswick’s vertically integrated business model gives it a significant amount of control over its supply chain.

So what are the downsides? Well, Cranswick shares yield just 2%. A valuation of 18 times forecast FY25 earnings, while not exactly frothy, could also come back to haunt new buyers. That’s if inflation bounces for longer than expected or there are any unexpected operational disruptions.

Still, I see no reason why it can’t continue to outperform its index over the long term. The shares are up almost 47% in five years compared to a near-6% rise in the FTSE 250. And that’s not including the income investors will have compounded over that period.

Profits (and dividends) jump

Wealth manager Rathbones (LSE: RAT) is another dividend-growth superstar. Out of interest, it announced some analyst-beating full-year numbers yesterday (26 February).

Underlying pre-tax profit hit £227.6m in 2024. That’s a rise of 79% compared to 2023 — no mean feat considering the multiple headwinds it faced last year, including a change of UK government and armed conflict in the Middle East.

A lot of this uplift is down to what appears to be a very successful integration of Investec Wealth and Investment (UK) with only 0.3% of the latter’s clients declining to move to Rathbones.

But it’s the 6.9% uplift to the final dividend that caught my eye, bringing the full payout to 93p per share. That gives a yield of 5.6% at the current share price.

Dividends can never be guaranteed, especially if they operate in a cyclical sectors such as finance. But Rathbones has shown itself to be more reliable than most of its peers.

Trading ahead

A final FTSE 250 stock to consider is shipping services provider Clarkson (LSE: CKN). The 2.5% forecast yield isn’t huge. However, at least some of this is down to the share price enjoying some great positive momentum. It’s up 14% in 2025 so far, significantly outperforming the index.

Much of this movement has come thanks to an encouraging, if exceptionally brief, recent update. Back on 10 January, the firm announced that full-year numbers for 2024 would now be “slightly ahead of current market expectations” with underlying pre-tax profit coming in at “not less than £115m“.

One key risk here would be an increase in global trade tensions. However, knowing that Clarkson managed to weather the storm during President Trump’s first term in the White House bodes well. In fact, it recently registered 21 years of consecutive dividend growth!

Lloyds Banking Group (LSE:LLOY) shares have risen a whopping 25% so far in 2025, taking total gains over the last 12 months to a shade below 50%.

By comparison, the broader FTSE 100 has risen a more modest 5% and 12.8% over the same timeframe.

Following its astronomical rise, I’m curious to see how Lloyds’ share price looks from a GARP — or ‘Growth at a Reasonable Price’ — perspective. As the name suggests, this strategy aims to find shares that look cheap based on predicted profits, as measured by the price-to-earnings growth (PEG) ratio.

Here’s what I’ve found.

Test #1

To calculate the PEG multiple, I need to divide the price-to-earnings (P/E) ratio by expected earnings growth. Here’s what my calculations have thrown out:

As a GARP investor, I’ll be looking for a PEG reading of 1 or below. You’ll see that the bank misses this target for 2025, but also that next year’s ripping growth forecast drives its shares well inside this threshold.

Test #2

So Lloyds’ shares look relatively attractive as a GARP investment. But how does the Black Horse Bank score compared to the FTSE 100’s other banks?

Here you’ll see their earnings multiples based on predicted earnings for the next two years:

2025:

2026:

You can see that Lloyds’ PEG ratios are less impressive compared to sector peers Barclays and Standard Chartered. Both carry multiples below 1 for both 2025 and 2026).

In better news though, they’re roughly in line with NatWest’s over the period, while they also beat HSBC’s by a strong margin.

The verdict

Retail banks aren’t renowned for being high growth shares. But supported by a housing market recovery — and from 2026, a predicted bounce for the UK economy — City analysts think Lloyds’ will enjoy robust earnings over the near term. They also think the bank should benefit from further cost cutting (it booked £1.2bn worth of savings in 2024).

On paper then, it can be argued that Lloyds looks attractive from a GARP perspective. But I have my reservations. In my opinion, the risks to Lloyds’ current earnings forecasts are considerable. I feel the bank could struggle to grow revenues given the multiple threats to Britain’s economic recovery, with mounting competition adding to the strain.

Its net interest margin (NIM) — which slumped 16 basis points in 2024, to 2.95% — are also in danger of sliding further, as the Bank of England gears up for more interest rate cuts and competitive pressures increase.

Finally, Lloyds’ earnings could take a battering if the Financial Conduct Authority (FCA) finds the bank guilty of mis-selling car insurance. The costs of the ongoing case to Lloyds have been put as high as £4.2bn by investment firm KBW, far above the £1.2bn the bank has set aside.

On balance, I think GARP investors should consider buying other growth stocks instead.

When deciding which UK stock to buy, I like to come to my own conclusions. I certainly wouldn’t leave it to a robot.

On the other hand, it’s always nice to have a second opinion, even of the artificial variety. So I asked ChatGPT to tell me which UK share it though was best to buy over the next month. I never expected the answer would be property portal Rightmove (LSE: RMV).

The stock has completely dropped off my radar. Which is strange given that my partner spends half their days browsing it!

I assumed Rightmove must have dropped into the FTSE 250 but no, it’s still in the FTSE 100, with a market cap of more than £5bn. The shares have been doing nicely as well, up 17% in 12 months, although they’re flat over five years. So what was ChatGPT’s reasoning?

Is this a brilliant FTSE 100 stock?

My robot buddy admired the company’s clear market-leading position, hoovering up 80% of the time buyers and tenants spend on UK property portals. Success is self-reinforcing, as estate agents and property seekers can’t ignore it, ChatGPT said.

All of the performance figures it plucked out were for full-year 2023, which confused me. On checking, I discovered Rightmove’s 2024 preliminaries are published tomorrow. What are the chances!

Anyway, 2023 was pretty good, with revenue up 10% to £364.3m as customers continued to upgrade packages and increase their use of digital products.

Operating profit climbed 7% to £258m, while the board lifted the final dividend 10% to 5.7p per share.

ChatGPT was impressed by Rightmove’s “high profitability and efficient business model”, while warning that its performance is closely tied to the health of the UK property market. I think I’ve exhausted the limits of ChatGPT’s usefulness. So, what do I think?

For starters, I think the shares looked jolly pricey, trading at 26 times trailing earnings. That’s way above the FTSE 100 average of around 15 times.

Rightmove shares are cash generative but expensive

The price has been pushed up by a takeover offer by REA Group, which broker Jefferies now suspects is unlikely to materialise. I’m resistant to buying shares on takeover speculation anyway.

Much depends on the health of the UK economy and housing market. On Boxing Day, Rightmove reported record listings. If interest rates continue to fall and mortgages become more affordable, activity could climb further. And if Labour’s building boom actually happens, that should help.

Rightmove has another advantage. It doesn’t have to pour huge sums into developing online infrastructure.

Of that £258m operating profit in 2023, the board returned £201.7m to shareholders through dividends and share buybacks. It was a similar story in 2022. I’m surprised the trailing yield isn’t higher than 1.41%. Or the shares, for that matter.

Motley Fool trading rules mean I can’t buy any company for a couple of days after reviewing it. So my hands are tied until after tomorrow’s preliminaries, which will be an interesting read. However, I won’t consider buying until all the takeover fuss has been priced out.

ChatGPT has never pretended to be a stock picker. No investor should rely on it. But it has highlighted an interesting opportunity here. Rightmove is on my radar now.

WPP (LSE: WPP) was having a shocker in the FTSE 100 today (27 February). Earlier, it was down 19% and heading for its worst day since the early 1990s!

As I write though, it’s clawed back some gains and is ‘only’ down 16%. Still, at 646p, it’s WPP’s lowest level in over four years.

The stock has been a disappointment for a long time. It’s down 9% in 12 months, 14% over five years, and more than 50% across a decade. Meanwhile, dividends have been up and down over the years.

Mixed results

The culprit for today’s big drop was the advertising company’s underwhelming Q4 results and uninspiring guidance for 2025.

In the final quarter of 2024, underlying revenue fell 2.3% on a like-for-like basis, with growth impacted by weak client ad spend. Growth in western continental Europe (+1.4%) was offset by weakness in all other markets:

• North America: -1.4%
• UK: -5.1%
• Rest of World: -4.8% (including a 21.2% drop in China)

For the full year, underlying revenue fell 1% on a like-for-like basis to £11.35bn. This was slightly worse than expected, with analysts forecasting a 0.4% decline. 

On the positive side, operating profit grew 2% on a like-for-like basis to £1.71bn, meeting market expectations, while adjusted free cash flow rose to £738m from £637m, driven by strong working capital management. The operating margin improved from 14.8% to 15%.

Tough out there

However, guidance for this year was downbeat, as management remained “cautious” due to the challenging market conditions. It expects underlying revenue to either be flat or down as much as 2%. The operating margin is expected to be flattish.

The stock looks cheap, trading at less than eight times this year’s forecast earnings. And there’s a decent 6% dividend yield after the company proposed a final dividend of 24.4p per share, bringing the total to 39.4p (the same as 2023).

In this case though, I think a low valuation multiple is probably warranted. The company has stopped growing and is having to restructure and streamline operations to squeeze out improvements in profit margins.

CEO Mark Read said it was a “tough market out there” today, which is a fair comment.

Would I consider investing?

WPP used to be the world’s largest ad group, but it lost that title to France’s Publicis last year. Meanwhile, US rivals Omnicom and Interpublic Group have announced a mega-merger, subject to regulatory approval, to create a massive advertising conglomerate.

I fear competition could intensify in the age of generative artificial intelligence (AI). Granted, the firm has developed WPP Open, an AI platform that uses generative AI to assist in content creation and personalised marketing campaigns. It intends to invest £300m in the platform, and last year it played a key role in securing new business wins with Amazon, Johnson & Johnson, and Unilever.

However, this AI threat creates a lot of uncertainty in my mind. Brands might use AI-driven platforms to create and optimise ads themselves, reducing their dependence on agencies like WPP. Totally new AI-based business models might emerge, disrupting legacy advertising players with large creative teams.

If I wanted to invest in advertising, I would rather consider Google parent Alphabet or Meta. Or The Trade Desk, a fast-growing programmatic advertising firm. They look better positioned for growth. WPP isn’t for me.

In contrast to the FTSE 100 as a whole, Taylor Wimpey (LSE: TW) shares have been in poor form in 2025 so far. The stock is down again today (27 February) following the latest set of full-year numbers from the High-Wycombe-based business.

Big drop in profit

Revenue dipped just over 3% to £3.4bn. On it’s own, that doesn’t sound too bad. However, pre-tax profit tanked over 32% in 2024 to £320m.

Why such a fall? Well, concerns about affordability as a result of inflation rebounding certainly haven’t helped. Having dropped to the Bank of England’s target of 2% back in May 2024, we’ve since returned to 3%. Clearly, this is still a lot better than the 11.1% set in October 2022. But it has pushed Governor Andrew Bailey and co to push back their forecast of returning to 2% by six months.

A consequence of this is that interest rate cuts are likely be slower going forward, hitting demand for homes built by the £4bn cap.

Of course, none of the above is a surprise to the market and this goes some way to explaining why the shares were trading only slightly lower this morning rather than crashing in value. Moreover, there were a few, more positive things for investors to digest.

Strong order book

Despite the big drop in profit, CEO Jennie Daly was (understandably) keen to put a positive spin on things. She reflected that the start of the spring selling season had been “robust“. An order book of £2.26bn — up on the £1.95bn last year — was also highlighted.

As thing stand, Taylor Wimpey expects to meet market estimates on operating profit of £444m in 2025. Whether that happens is another thing entirely. As an aside, it’s worth noting that temporary tax breaks (such as for first-time buyers) will go at the end of March and that higher taxes for businesses will kick in only a few days later.

Huge dividend yield

Naturally, no one truly knows where the share price will be next week, next month or next year. So, what do we know?

Well, Taylor Wimpey stock currently changes hands for just under 13 times forecast earnings for 2025. That’s fairly average for the UK market as a whole. It’s also on par with other big property players such as Persimmon and Barratt Redrow. So, we’re not talking a ludicrous valuation here.

Another attraction is the yield. Although dividends are never guaranteed, the former currently stands at a monster 8.4%. For perspective, the FTSE 100 as a whole yields ‘just’ 3.5%.

The question is whether this income stream is worth the risk involved, especially as the payout isn’t predicted to be covered by profit. Should things not improve soon, the company may need to begin cutting its distributions.

Patience required

If we assume that a lot of negativity has already been factored in by the market, I reckon considering the shares today could deliver a great return in time.

But that last bit is key. While the ongoing undersupply of quality housing in the UK should mean that big housebuilders like Taylor Wimpey recover in time (and then some), this is probably not one to consider for those hoping for a quick return.

When it comes to passive income, I think dividend shares are the way to go. And for those who are able to invest regularly over a long period of time, the rewards can be great.

Over 30 years, a 5% average annual return can turn £10 per week into something that generates £1,727 per year in dividends. And I don’t think 5% is beyond the bounds of what’s realistic.

Taylor Wimpey

Shares in FTSE 100 builder Taylor Wimpey (LSE:TW) come with a dividend yield of around 8.5%. That’s well above the required 5% return and there are more reasons to be positive.

It’s no secret that the UK has a shortage of houses and this isn’t changing any time soon. So there’s likely to be a growing market for the company to take advantage of over the long term.

The biggest risks with this business is margins. Inflation can push up the price of building materials and the company has just reported extra fire safety remediation costs too.

That can be a threat to cash flows and profits. But it’s worth noting that Taylor Wimpey has an approach to its dividend that is different to other housebuilders.

The company bases its dividend on the value of its assets, rather than its cash flows. That means it’s likely to keep distributing cash to shareholders even through a downturn. 

Obviously, it can’t do this indefinitely. But investors with a positive view of the UK housing market might think Taylor Wimpey shares offer more stability than other housebuilders.

Admiral

On the face of it, Admiral (LSE:ADM) doesn’t look like an obvious dividend stock for someone aiming for a 5% annual return. But appearances can be deceptive.

In some places, the yield currently shows up as around 3%, but that’s only the base dividend. The FTSE 100 insurer has consistently distributed additional special dividends on top of this. 

Admiral’s policy is to distribute 65% of its pre-tax profits as a regular dividend. On top of this, it also pays out any cash it doesn’t need to meet its solvency requirements. 

Dividends are never guaranteed – and special ones like this can absolutely fluctuate. But it’s worth noting that this makes the stock a better passive income investment than it might seem.

Obviously, the amount Admiral can return as a special dividend depends on regulatory requirements. And the potential for a change in these is a risk to take seriously with the stock.

Overall, though, the firm’s strategy of reinsuring most of its policies is one that I think could prove highly cash-generative. And this means it’s worth considering for dividend investors.

Passive income

Dividend shares aren’t always what they seem. And in some cases, a closer look can reveal they’re more attractive than they initially appear. 

I think this is true of both Taylor Wimpey and Admiral. As a result, I see both as stocks dividend investors should have on their lists of stocks to consider buying.

When it comes to passive income, investing regularly in stocks and reinvesting dividends is the strategy I prefer. Over time, I think this is likely to be far better than leaving cash in the bank.

Over the past year, owning shares in Barclays (LSE: BARC) has been rewarding. The Barclays share price is up 80% during the past 12 months alone.

The share price recently passed £3. Where might it go from here – and should I buy some now?

A long way down over time, but making good progress

Go back over 20 years and Barclays shares were within spitting distance of changing hands for £25 apiece at one point. How the mighty have fallen (along with UK banking peers including Lloyds).

Still, the share price performance over the past year has been outstandingly good.

Over the past five years, the price has more than doubled.

The investment case here is pretty straightforward. Barclays has a strong brand, large customer base and diversified banking operations.

Retail banking can be lucrative but it also faces eternal risks, like economic downturns pushing up loan defaults. What sets Barclays apart from many UK rivals is that it also has a sizeable international investment banking operation.

That can make shedloads of cash when times are good (its income last year topped £11bn). But investment banking can be a fickle business, especially when the economy struggles and deal-making dries up.

Still, Barclays continues to do well, in my view. Last year’s basic earnings per share (EPS) rose a very impressive 30% to 36p.

The share does not look expensive

That means that the bank trades on a price-to-earnings (P/E) ratio of under 9. That looks potentially cheap.

But to value bank shares many investors prefer to look at the price-to-book value. Here too, Barclays currently looks cheap.

So, even after it soared in the past year, I still think the price of Barclays stock looks potentially cheap. From here, could it hit £5?

On current earnings, that would imply a P/E ratio of 14. That is pricey compared to UK banking peers, although lower than US pure investment banks such as Goldman Sachs.

But Barclays is UK-listed and not a pure investment bank. So I think a P/E ratio of 14 seems too high to justify in the current market.

Still, if it keeps growing earnings strongly, that could justify a higher valuation without a much higher P/E ratio. £5 might be hard to reach, but another year of 30% basic EPS growth could propel Barclays towards a £4 share price.

For now I’m in wait-and-see mode

I have felt bearish about banks for a while. That is why I have missed out on the strong performance of Barclays and UK rivals over the past year.

As its performance last year proved yet again, Barclays has serious money-making potential and a well-proven business model.

Still, while my nervousness about the outlook for the banking sector has so far been confounded by events, I remain uncomfortable.

The global economy is facing multiple sizeable geopolitical risks and to some extent we are simply guessing as to what that means for economic performance.

The risk of a financial slump and sharp growth in loan defaults continues to put me off. For now, although I think Barclays shares may move higher, I will not be adding them to my portfolio.

The worst-performing stock so far today (27 February) is Ocado (LSE:OCDO). The Ocado share price is down 19% and hit its lowest level since 2017 earlier in the morning. Clearly, a move of this size means that something significant is going on. Here’s the story and why I won’t be buying it right now.

More headaches

The main catalyst for the move came from the release of full-year results for 2024. The business posted a loss before tax of £374.5m. Although this was slightly smaller than the 2023 loss of £393.6m, it was still a disappointing result for investors to have to digest. Arguably, it’s even more frustrating when you consider that revenue for the period rose by 14.1%. Yet this couldn’t filter down to a profit, mostly due to higher depreciation and amortisation costs.

Another point of concern aside from the finances came with the slowdown in the rollout of robotic sites for its grocery retail partners. On top of that, no new exciting partnership deals were announced. The deal with Marks and Spencer is currently in “constructive talks”, but I think most would agree that this has now become a headache that simply needs to be closed out so both sides can move on.

Bright sparks to note

Despite the bad news from the results, there were positives. It spoke about how “Ocado Retail in the UK continues to lead the way as consistently the fastest-growing grocer in the market and reaching one million active shoppers for the first time.”

The Retail division grew by 13.9%, which is impressive when you consider that this is operating in a fiercely competitive grocery market. At a time when consumers in the UK are still feeling the pinch, the revenue growth in this area is a big positive.

Even though the management team will take some encouragement from this, the share price drop today is very telling. The stock is down 32% over the past year, with any losses today adding to this figure. And given that the company is still making hefty losses, it’s hard to use traditional valuation metrics to pinpoint if it’s at all undervalued.

I’m staying clear

Ocado has a lot of potential, particularly with its logistics centres and making use of robotics and automation. However, until I can see signs that finances at a group level are materially improving, I just can’t justify investing.

I accept that maybe I’m being overly pessimistic. For investors who have a higher risk tolerance than me or who feel the fulfilment centres can be rolled out at a faster pace in the future, it could be a smart purchase. But I feel there are better (and safer) opportunities in the market for me at the moment.