I think it’s only natural to gravitate to high-yielding dividend stocks when searching for passive income. Some of these companies distribute far more than a diligent saver would earn from just sticking their cash in a bank account.

The snag is that one needs to be even more picky than usual. A bumper dividend yield becomes redundant if the share price just keeps falling.

Poor performer

One example of the above is specialist emerging markets investment manager Ashmore Group (LSE: ASHM).

Right now, shares in the FTSE 250-listed company yield a staggering 10.1%. For perspective, the highest-paying easy-access Cash ISA account in the UK will cough up just over 5%.

One major reason for this is that Ashmore’s stock simply won’t stop falling. It’s down 25% in the last year and over 70% since February, 2019. When a share price falls, the yield is pushed up (all other things being equal).

The issues aren’t hard to fathom. Assets under management have fallen dramatically as a result of clients withdrawing their cash in the wake of concerns about geopolitical tensions and volatility in emerging markets. And who can blame them when the US stock market is going gangbusters?

Things are so bad that Ashmore’s dividends aren’t even expected to be covered by profit.

Where’s the growth?

But there’s another thing to note. A great company for income hunters doesn’t just return a good dollop of money to its shareholders at regular intervals. It’s also one that grows the payout over time. Worryingly, Ashmore hasn’t hiked its total dividend at all since 2020.

Of course, interest in other, less developed markets could rise in response to concerns that US stocks are too expensive. Since some of these nations are forecast to grow rapidly in the decades ahead, long-long term investors in particular may want to consider some exposure.

Even so, they may wish to contemplate less risky ways of going about it.

A better option to consider?

In sharp contrast to Ashmore, stock in FTSE 100 giant Imperial Brands (LSE: IMB) has been absolutely flying in the last year (+52%). And there’s been a lovely dividend stream on top!

Imperial’s rise is partly down to signs it’s becoming less dependent on traditional tobacco sales. Adjusted operating profit growth of 4.6% was hit in the last financial year. This was helped by a 26% jump in revenues for next-generation products (NGPs) such as vapes and nicotine pouches. This comfortably beat analyst forecasts.

More recently, President Trump’s recent move to withdraw a plan to ban menthol cigarettes — hugely popular in the US — has been another tailwind.

Solid dividend yield

The yield here is ‘just’ 5.7%. However, that’s still greater than the aforementioned best savings account.

Imperial also boasts a good record of raising its payouts too. That record isn’t perfect, though. The dividend was cut by a third in 2020 as the pandemic raged, underlining the point that income can never be guaranteed.

One potential concern here is if regulators begin taking a greater interest in NGPs as the years pass and more data on how they impact health emerges.

For this reason, anyone thinking of buying the stock may wish to double-check that their portfolio is already sufficiently diversified.

It’s true that in the UK, we don’t have a huge amount of tech shares to get excited about. Most flourish across the pond in Silicon Valley and are listed over there. Yet there are some FTSE stocks in the tech space that are worth considering. Here’s one that went public less than a year ago that I think has good potential.

The long story short

I’m talking about Raspberry Pi (LSE:RPI). It was actually founded as a charity back in 2008, with the aim of developing an affordable computer to encourage young people to learn programming and computing. After launching the first model back in 2012, things took off, with over 50m unit sales around the world.

It now has a broader range of products, including compute modules, accessories and semiconductors. Commercially, it’s doing well, especially after listing on the stock market in June last year. The latest half-year report “was stronger than we had previously expected”, with gross profit of $34.2m for the period.

The IPO price was set at 280p, with it currently trading at 718p. Clearly, investors are excited about its prospects.

What the future could hold

The business commented in an update that “the market opportunity for Raspberry Pi products is substantial, with a total addressable market across the Industrial & Embedded and Environmental & Education markets estimated at $21.2bn in 2023.”

Of course, Raspberry Pi will never have a complete monopoly on this market. Yet it goes to show the revenue potential for the future. With a current market cap of $1.67bn, there’s clearly room for the stock to increase in value substantially.

Further, the business is continuning to diversify the product offering. This bodes well for the future, especially with AI potential. Should the business look to develop specific processors for more high-end AI use, it could open up a much large market.

Don’t get confused

Even though I think this is a great tech stock for future growth, it’s important not to get confused. I’ve seen some people compare this with Nvidia. Yet Nvidia focuses on making high-performance computing chips, whereas Raspberry Pi is in the low-cost and DIY space. Nvidia chips are much more powerful and as a result, the company serves a different set of clients.

This doesn’t mean that Raspberry Pi stock can’t rally a lot in the future, but I don’t see it copying the extreme surge that we’ve seen in Nvidia stock over the past couple of years.

One risk going forward is that cheaper alternatives pop up from China. This could erode the market share for the company and pressure profit margins.

Ultimately, I really like the stock and am seriously thinking about buying it. Both the short and long-term growth potential is there, for a company that could become a UK tech darling.

A number of FTSE 100 shares look potentially cheap to me.

Take HSBC (LSE: HSBA) as an example. It has soared 207% from a 2020 low. But it still trades on a price-to-earnings ratio of just 9 – and offers a 5.5% dividend yield to boot.

Might it be the biggest bargain on the blue-chip index right now?

The bank has been reshaping itself in recent years, exiting certain markets. It continues to be a sizeable force in key markets, notably Hong Kong and the UK.

Having already sold off various businesses, HSBC continues to reshape itself around a couple of centres of gravity, in Asia and the UK. That adds geopolitical risk.

On the plus side, it offers the benefit of diversification and allows the experienced, longstanding bank to benefit from economic growth opportunities in one region even if the other is performing less strongly.

HSBC is not the most exciting business, but as an investor I like its strong brand, proven business model, large customer base and significant ongoing cash generation potential. That last point can help support the dividend.

A 5.5% yield is already well above the FTSE 100 average, but some HSBC shareholders are doing better. After all, those who bought back at the 2020 low I mentioned would now be earning a dividend yield close to 17%.

The share price could be good value, but carries risks

While that P/E ratio may look low, it is pretty much par for the course among London-listed banks. It is lower than the 11 of Barclays but in line with both Lloyds and Natwest.

That points to a concern I think some investors (including myself) have about the sector. While earnings have been strong in the past several years, a weak and uncertain global economy could mean higher loan defaults in coming years.

If that happens, I would expect banks including HSBC to take a hit to their profits.

If the global economy steps up a gear then banks may come to look undervalued at today’s prices. That could mean a higher share price for HSBC several years from now.

However, the risk environment does not make me feel comfortable investing in banks at the moment.

I doubt this is the FTSE 100’s  best bargain share

So, I will not be investing in HSBC.

Its yield is attractive, but it is well below that currently offered by other FTSE 100 shares I own such as M&G and Legal & General.

As for valuation, it looks fairly cheap but not more so than some rivals. As to whether that appearance of cheapness is in fact correct, time will tell.

If banks like HSBC encounter choppier waters, their current valuations may not be cheap despite trading on a single digit P/E ratio. I prefer more margin of safety.

Rolls-Royce (LSE: RR) shares surged 221% in 2023, then 90% last year. So far in 2025, they’re up another 7.9%, bringing the four-year return to 560%!

However, there could be another catalyst on the horizon for this FTSE 100 high-flyer — at least if Prime Minister Keir Starmer’s recent announcement is anything to go by.

What was said?

I’m talking about small modular reactors (SMRs), of course. These are the factory-built nuclear reactors designed to be smaller, more flexible, and cost-effective than traditional nuclear plants.

On 6 February, the government set out ambitious plans to roll out nuclear power across England and Wales. Some noteworthy plans included:

• Scrapping the set list of eight sites, meaning that nuclear reactors could be built anywhere for the first time.
• Including SMRs in planning rules for the first time, allowing firms like Rolls-Royce to build and deploy them where needed.
• Reforming planning rules to make it easier to set up SMRs. 

The UK built the world’s first full-scale nuclear power station, but hasn’t had a new one since 1995. “The industry pioneered in Britain has been suffocated by regulations,” the government has admitted.

In future though, SMRs will be built to support power-hungry sites like AI data centres. And Starmer openly invited tech giants like Google, Meta, and Amazon to invest in the UK. 

Still waiting

Obviously, all this is great news for Rolls-Royce’s SMR division. It says one of its mini reactors provides enough low-carbon electricity to power 1m homes for more than 60 years.

However, in contradiction to the PM’s go-for-it tone, the long wait goes on for the two winners of the UK’s SMR competition. This is expected to be announced by Great British Nuclear on or around the time of the Spring Budget Statement, scheduled for 26 March.

Rolls-Royce is in the running with three overseas firms. Given that it has already been chosen by the Czech Republic and Poland to deploy fleets of SMRs, I’d be surprised if Rolls misses out. 

Then again, governments do sometimes make decisions that appear to contradict their own national interests, so it can’t be ruled out.

Huge potential

According to market researcher IDTechEx, the global SMR market could reach $72.4bn by 2033, and a whopping $295bn by 2043. Therefore, if Rolls is also selected to deploy mini reactors across the UK, I’d expect the share price to jolt higher.

However, it’s important to remember that SMRs won’t be operational until at least 2032, according to government estimates. And nuclear energy has its downsides, including dealing with the radioactive waste.

In the meantime, Rolls-Royce will be judged on how its core engine business performs. The stock is currently trading at nearly 29 times this year’s forecast earnings. That valuation doesn’t leave much room for error, meaning the firm will have to keep hitting or surpassing its ambitious growth targets.

If earnings come in lighter than expected, the stock could sell off sharply.

Buy more shares?

I first invested in Rolls shares in 2023 when they were at 149p, then added at 477p last year. With the stock now at 613p, I’m happy with that.

Were Rolls-Royce to suffer a setback though, I’d consider buying more shares. I’m bullish on the long-term growth of the global aircraft market and the potential of SMRs.

There are various concerns swirling around Diageo (LSE: DGE) shares nowadays. These range from cash-strapped consumers to US tariffs and even the impact of weight-loss drugs like Wegovy.

The share price is down another 14.4% in 2025, bringing the five-year decline to around 30%. However, there’s another mounting concern I have as a Diageo shareholder. That is the habits of those born between the late 1990s and early 2010s in the West — otherwise known as Gen Z.

The trends seem clear

Just about every study on alcohol consumption among young adults points to the same conclusion: they’re drinking far less than previous generations. But why? There seems to be a cocktail of factors.

One major reason is health consciousness. As public health campaigns highlight the risks of alcohol — addiction, heart disease, cancer, etc — many young people are rethinking their drinking habits.

It might just be a matter of time before we see cigarette-style warning labels on alcohol, complete with those grotesque images of diseased organs. That could certainly dampen the mood over dinner as someone reaches for another glass of red!

Next is cost. As we know, just about everything is expensive nowadays in the West, including nights out and drinks. For many Gen Z’ers, it just makes zero sense to spend the equivalent of a working hour’s wage on a fancy cocktail or couple of pints of Guinness.

Finally, there’s a more fundamental generational shift. Throughout history, alcohol has been used as a social lubricant. Yet Gen Z’s interests are largely solo-based, including video games, social media, YouTube, or doing non-drinking activities like gym and yoga. Fitness trackers are hot — another new phenomenon.

Going to nightclubs and pubs — what’s left of them — just isn’t as common for this cohort as it was for Boomers, Gen X or even Millennials. A World Finance report reveals that Gen Z’ers drink on average 20% less than Millennials, who also consume less alcohol than older generations.

Zebra striping

Of course, Diageo knows all this. Otherwise, it wouldn’t be scrambling to build out its zero-alcohol options, including Guinness 0.0.

In fact, it has been using artificial intelligence (AI) to analyse trends shaping consumer behaviour. This involved listening in to 60m online conversations from across the world.

According to its 2025 Distilled report, Diageo found that consumers are participating in a trend known as “zebra striping”. That is, alternating between alcoholic and non-alcoholic drinks during social events.

While that just sounds like a buzzy term for moderation, I think Diageo is implying it might still benefit by offering them both alcohol and non-alcohol options. Or at least that’s what it hopes.

Cheap-looking valuation

If all these things are true, it would suggest that global alcohol sales are facing long-term structural decline, similar to oil and cigarettes. In other words, the sales issues the FTSE 100 firm is facing might not be cyclical. That’s the possible giant red flag here.

Now, this doesn’t mean the stock is untouchable. At 2,171p, it’s trading at 15.6 times forecast earnings for FY26 (starting July). That’s historically cheap for Diageo, which may suggest many of these issues are already priced in. But they’re concerning nonetheless.

My plan is to digest all this before deciding what to do with my Diageo shares.

Every quarter, large institutional investors submit 13F filings that detail which stocks they hold. While these reports are registered up to 45 days after the quarter ends, they still give us a glimpse into the recent activity of Wall Steet’s elite fund managers. One I follow is David Tepper, who runs Appaloosa Management and is known for buying ultra-cheap shares. 

Worth north of $20bn, he’s one of the world’s top investors, delivering impressive compound returns above 25% since the early 1990s. Investors with this type of track record are always worth paying attention to.

What’s he been buying?

Yesterday (10 February), we learned that Tepper doubled down on Chinese stocks in the fourth quarter. Indeed, at the end of December, China-linked stocks and exchange-traded funds (ETFs) made up 37% of his entire $6bn+ portfolio!

Specifically, he upped his stakes in e-commerce giants Alibaba, JD.com, and PDD Holdings (NASDAQ: PDD). Two of these are now among his top three positions, with Alibaba at the top (worth over $1bn and 15.5% of assets) and PDD the third-largest (8%).

Meanwhile, he increased his position in JD.com by 43% in the quarter.

Tepper believes Chinese companies offer fantastic value. He points out that many are cash-rich and trading near single-digit price-to-earnings (P/E) ratios despite still growing earnings at double digits.

Looking at this trio, we can see how cheap they are compared to Western e-commerce/tech stocks.

	Market cap	Forward P/E ratio (2025)
Amazon	$2.4trn	37
Shopify	$155bn	107
MercadoLibre	$103bn	46
eBay	$32bn	17.8
Alibaba	$264bn	15.9
PDD Holdings	$161bn	9.8
JD.com	$63bn	11.2

Uncertainty

Why are the valuations so low? Well, consumer spending in the world’s second-largest economy has been weak for some time, impacting growth at many Chinese e-commerce firms.

Additionally, US-China relations have worsened and are likely to deteriorate further. Tit-for-tat tariffs have started and this has increased uncertainty and soured sentiment for Chinese stocks.

However, Tepper has highlighted how China is actively encouraging higher shareholder returns. Its central bank is even providing financial support to companies for share buybacks!

A P/E of 9.8!

I think PDD looks the most attractive of the three. It’s the parent of Pinduoduo, the fast-growing online marketplace that serves hundreds of millions of Chinese consumers who live in rural provinces.

However, it’s not just reliant on its homeland, as it also owns cross-border e-commerce platform Temu. This has been one of the fastest-growing apps in the world recently, tempting people in with its unbeatable cheapness.

Temu’s tagline is “Shop like a billionaire”, and I can see what it means. In early December, I paid around £25 for multiple bags of doll clothes and accessories, which surprisingly turned out to be the highlight of my daughter’s Christmas. The app is now a toy staple for me!

Amazon has taken note of Temu’s rise and recently launched an ultra-discount rival called Haul. So PDD is certainly a disruptor, despite its low P/E of 9.8.

One big risk to Temu’s international growth is the potential for a crackdown on its duty-free imports, which currently bypass customs charges.

Looking ahead though, analysts still have solid double-digit growth pencilled in for both revenue and earnings in 2025 and 2026.

With MercadoLibre and Shopify among my top holdings, I currently have enough e-commerce exposure. But for investors willing to embrace the risks associated with Chinese stocks, it might be time to consider shopping with a billionaire like Tepper and buying cheap PDD shares.

There are lots of reasons investors like Greggs (LSE: GRG), from its large customer base to a proven business model. The reality is though, that Greggs shares have performed badly of late. The price has crashed 23% in the past year and is now 10% lower than it was five years ago.

As a patient investor with a long-term investing timeframe, that has grabbed my attention. Could now be the time to buy?

Here’s what’s behind the fall

Last month, the baker announced full-year sales grew 11% to over £2bn. It also opened a record number of new shops during the 12-month period. And it said it expects last year’s results to fall within City expectations.

That all sounds pretty positive. So what has been going on with the share price? The main concerns, as I see it, relate not to how Greggs has been doing but what its medium-term future prospects are.

Fitting out those shops takes money, for example, and Greggs ended the year with £125m of cash versus £195m at the same point a year beforehand.

With plans for 140-150 new shops, even allowing for ones that are closing, this year looks set to be another one of Greggs growing its estate. That takes more money.

Meanwhile, the company pointed to higher employment costs this year leading to inflation.

Thinking for the long term

Still, as the company points out, it has been spending money to support what it describes as an ambitious growth plan. It says the long-term opportunity for the business remains “significant”.

I agree. There is still a lot of room for expansion in the store estate in the UK alone. Beyond that, opening longer hours to serve a wider range of meal occasions could be another growth opportunity. Greggs has been doing that more over recent years, but I think there is still untapped potential.

The brand is strong and I think the chain has a unique value proposition in a food market that is likely going to be resilient over the long term, albeit declining numbers of people on some high streets could require further reshaping of the shop estate.

But for now, the market seems more focused on the risks than the potential ongoing growth story. Greggs shares have now fallen to a level where they trade on a price-to-earnings (P/E) ratio of 16.

This is a quality business I would be happy to invest in if I could buy at an attractive price. So are Greggs shares currently priced cheaply enough for me to make a move? No.

I see an ongoing risk this year due to higher wage costs and that could eat into earnings. Meanwhile, sales growth slowed at the end of last year and I see a risk that a weak economy could hurt sales growth this year.

Although Greggs shares have become cheaper, for now I am still holding off buying. I am keeping an eye on the share price and company performance though. If the price keeps falling I can see it potentially hitting a level where I would happily buy for the long term.

I actually used to own shares in FTSE 250 private hospital operator Spire Healthcare (LSE:SPI). However, the stock moved sideways for some time and I eventually lost patience.

However, I revisited the stock recently and noticed… the share price is still going sideways! Nonetheless, it does look like a more interesting prospect to consider today purely because of its incredible earnings forecast.

Big earnings potential

Spire Healthcare is currently trading at 34.3 times earnings for the last reported year, 2023. However, the company’s earnings for 2024 — to be released in March — are set to be around 50% higher than the previous year. This trend continues throughout the forecasting period through to 2026. As such, the company would now be trading at 23.3 times forward earnings, and then 15.6 times earnings for 2025 and 11.3 times projected earnings for 2026.

This will be driven, according to analysts, by surging revenues, which jump from £1.3bn in 2023 to £1.7bn in 2026. In the meantime, the business is expected to maintain control over costs and reduce debt. What’s more, the dividend yield is also expected to expand, reaching 2.25% by 2026, based on the current stock price. All of this is very encouraging.

Why is this happening?

Spire Healthcare is poised for strong performance due to several key factors. The company has seen significant growth in private revenue, driven by a surge in private medical insurance adoption among working-age individuals. This trend is particularly strong in corporate sectors, leading to increased outpatient activity and higher-margin inpatient treatments.

Additionally, Spire’s partnerships with the NHS have expanded, with rising revenue supported by higher commissioning volumes and patients choosing Spire facilities to reduce waiting times. Its NHS revenue increased 5.2% in H1 of 2024.

Operationally, it has implemented a £15m efficiency programme, focusing on digitalisation, automation, and process improvements. This initiative aims to boost hospital EBITDA margins beyond 21% by 2027. The company’s financial performance reflects these efforts, with adjusted EBITDA increasing by 10.8% in the first half of 2024, driven by improved hospital margins and optimised pricing strategies.

An opportunity worth considering

Of course, many UK investors will be put off by the current earnings multiple. After all, if Spire fails to deliver on its promised growth, the stock could fall. In fact, the March results really could be a make or break moment for the business. Expensive stocks that don’t meet earnings targets can slump.

Moreover, investors should weigh whether the business is becoming overly reliant on the NHS and consider whether labour shortages could negatively impact both the top and bottom line. It’s also worth noting that debt is relatively high compared to earnings, although the company is relatively asset rich.

However, the broader trends are very much in the company’s favour. The population is ageing, fewer of us trust the NHS and are taking private healthcare options, and Labour may be more inclined to invest in reducing NHS waiting lists. This is also reflected in the stock’s average price target of £3.07, which is 34% higher than the current price. All eight analysts covering the stock have a positive rating.

The potential impact of US trade tariffs on global stock markets has dominated the news recently. So far, none are specifically aimed at the UK but that doesn’t make us immune to the effects.

Analysts have been scrambling to make sense of how Trump’s increasingly complex list of trade tariffs could boil over into British markets. UK companies with US supply chains could be hit with higher costs, affecting profitability. Moreover, tariffs can lead to uncertainty, resulting in investor sell-offs and increased market volatility.

The National Institute of Economic and Social Research (NIESR) estimates that US tariffs on Mexico and Canada could reduce UK GDP growth by 0.1% in 2025.

The implementation of a blanket 10% tariff on Chinese imports has also raised concerns. Some fear a surplus of Chinese exports like steel could be dumped on the UK market, dragging down domestic sales.

UK exports

The value of UK exports to the US is around £60bn a year based on the most recent data. If the US imposes tariffs on UK goods, companies that rely on American markets could face declining demand. 

The largest exports are pharmaceuticals, at £8.8bn, cars at £6.4bn and power generation machinery at £5.2bn. If the higher cost of these products is passed on to consumers, it may eventually lead to a drop in demand, hurting the UK economy.

Such trade tensions can also lead to market uncertainty, causing investors to flee riskier assets like stocks in favour of safer options like bonds or gold. 

However, not all stocks are at risk of losses.

An opportunity for recovery

Among the chaos, a decidedly British stock has emerged as a potential beneficiary. Oil and gas giant BP (LSE: BP) surged recently when Elliott Investment Management took an interest in the company’s direction. Earlier this week, the activist investor acquired a substantial stake in the company, leading to a 7% price surge. 

The fossil fuel industry is already in good stead to benefit from Trump’s policy changes and pressure from Elliott could extend this potential. 

But there’s still a lot of work to do.

In BP’s FY24 results published today (11 February), fourth-quarter profit fell 61% to $1.17bn, the lowest in four years. The weak performance has put further pressure on CEO Murray Auchincloss, with Elliott’s involvement expected to bring about board changes.

The firm will likely advocate for BP to refocus on core oil and gas operations, possibly scaling back its investments in renewable energy sectors. With profits in decline, there’s been a growing pushback against plans to transition to net zero carbon emissions by 2050.

While this strategy could enhance short-term profitability it raises ethical questions about BP’s long-term sustainability commitments. Shareholders in support of energy transition may choose to divest in the stock, reversing recent price gains.

After suffering extended losses in 2024, the stock has recovered 26% since Trump won the US election. There are still a number of risks it faces, such as supply chain issues and oil price volatility.

Yet with Elliott on board, I expect further growth in 2025, making it a stock worth considering.

Phoenix Group Holdings (LSE: PHNX) is a core stock in my passive income portfolio. This generates maximum dividend income with minimal effort on my part.

Holding such shares over the past 30 years has allowed me a better lifestyle than I would otherwise have enjoyed. It may also allow me to retire early.

My key requirement in all these passive income stocks is that they keep generating a big yield. And as a stock’s yield rises when its price falls, such a drop does not bother me.

It only becomes relevant to me if it signals a fundamental problem at the firm. This might cause a reduction in dividends at some point.

How healthy is this stock?

Earnings growth drives a firm’s dividend (and share price) higher over time. I think the main risk to Phoenix Group’s is a recurrence of the cost-of-living crisis, which may prompt customers to cancel policies.

However, analysts forecast that its earnings will increase by a stunning 60.31% each year to end-2027.

H1 2024 results showed its IFRS adjusted operating profit grew 15% to £360m. And it generated total cash reserves of £950m over the same period.

It is confident it will achieve the top end of its £1.4bn-£1.5bn cash reserves target range for full-year 2024.

Current yield and predictions

Phoenix Group paid a total dividend of 52.65p a share in 2023, giving a current yield of 10.1%. This is nearly triple the FTSE 100’s present average of 3.5%.

However, analysts project the dividend will rise to 53.3p for full-year 2024, yielding 10.3%.

It is forecast to rise to 55.8p in 2025, to 57.5p in 2026 and to 59.6p in 2027. These would produce respective yields of 10.7%, 11% and 11.4% on the current share price.

From 2019 to 2023 inclusive, the firm has increased its dividend each year from 46.8p to the current level.

Passive income generation potential

Investors considering an £11,000 (the average UK savings) holding in Phoenix Group would make £1,111 in first-year dividends. On the same average 10.1% yield, this would rise to £11,110 after 10 years and to £33,330 after 30 years.

This is more than a standard UK savings account would generate. However, it could be even greater if the dividends were reinvested back into Phoenix Group stock.

This is known as ‘dividend compounding’ and is like leaving interest in a savings account to grow.

Using the miracle of dividend compounding

By doing this on the same average 10.1% yield, an investor would make £19,074 instead of £1,111 after 10 years.

After 30 years on the same basis, this would rise to £213,801.

Adding in the £11,000 initial investment, the total Phoenix Group holding would be valued at £224,801.

At that point, it would be paying £22,705 a year in annual passive income from dividends.

Its consistently high yield in recent years and forecasts for more of the same mean I will be buying more of the shares very soon. And although projected high earnings growth may also push the share price up, I am not bothered if it does not.