As we currently stand, Taylor Wimpey (LSE:TW) is one of the highest-yielding stocks in the entire FTSE 250. The dividend yield of 7.97% is generous, with dividends being paid on a semi-annual basis. If an investor had picked up this dividend stock at the start of 2023, here’s what the passive income generation would look like.

Getting the calculator out

For income stocks, the timing of purchases is important. This is because an investor needs to own the share by a certain date to be registered and receive the next dividend. It’s not like one can simply buy the stock the day before the dividend gets paid. For Taylor Wimpey, we’ll assume a purchase date of 1 February. On 2 March, a dividend of 4.78p per share was declared. This was paid on 12 May. The other dividends from then on would also have been received by the investor, with the most recent one being paid in November last year.

The total from the four dividends during this period is 19.15p per share. If an investor had bought at the opening price of 116p back in February 2023, the £10k initial lump sum would have bought 8,620 shares (I’m rounding it to the nearest share). Consequently, with 8,620 shares at 19.15p per share payments, the total amount received gross would be £1,650.73.

My observations

There are a few points to note from this. Clearly, the average yield over this period would have easily exceeded the money an investor would have got if the cash was on a normal savings account. Further, it was greater than the average dividend yield over this period from the FTSE 250.

From the purchase date to now, Taylor Wimpey shares have gained 2.5%. This means that if an investor sold the stock today, they would bank a slight profit from the capital appreciation. Yet this isn’t always the case. One risk with dividend investing is that the share price can fall, wiping out some or all of the income banked from dividends. Over the past year, Taylor Wimpey stock is down 17%.

Weighing up sustainability

Looking ahead, analysts are forecasting for the next dividend to be raised to 4.80p per share. This is due to be declared in early March. This could give investors confidence that the business can keep up the cash payments going forward.

However, Taylor Wimpey did cut the dividend completely during the pandemic. There was significant uncertainty in the housing market, with construction site closures for a period. To preserve cash, management decided to cut the payments to shareholders. This is a company specific risk going forward, as another unexpected event could cause the dividend to be halted.

Even with this, I believe the stock is a reliable dividend payer. It’s a company for income investors to consider.

Nvidia (NASDAQ:NVDA) stock has become a rollercoaster emblematic of the artificial intelligence (AI) boom’s euphoria and existential growing pains. Once the darling of the chip and processor world, its shares plummeted 16% in a single day in 27 January, wiping $600bn off its market value.

AI dominance built on GPUs and ecosystem lock-in

Nvidia commands over 80% of the enterprise AI chip market, thanks to graphics processing units (GPUs). These chips excel at the parallel computations required for machine learning. As such, Nvidia’s hardware underpins everything from ChatGPT to autonomous vehicles, with staggering performance improvements. The new GeForce RTX 5090 GPU boasts 3,352trn AI operations per second. Crucially, Nvidia has built an ecosystem moat through software like CUDA and platforms such as Omniverse for synthetic data generation, making switching costs prohibitive for many clients.

The company’s CES 2025 announcements underscored its ambition to also dominate emerging AI frontiers. This includes the Cosmos platform to bring ”ChatGPT moments” to robotics and self-driving cars through integrated environment-aware systems and the all-important agentic AI — this lets developers create autonomous bots for tasks from fraud detection to inventory management.

A $600bn reality check

Nvidia’s January crash wasn’t about fundamentals but a market panic triggered by Chinese startup DeepSeek. The claim of achieving comparable AI performance with radically more cost-efficient models suggested the segment might need fewer Nvidia chips long term. This exposed three vulnerabilities:

• Cloud vs Edge Shift: As companies like DeepSeek optimise for localised AI (addressing privacy and latency concerns), demand growth for data centre GPUs could slow.

• Geopolitical risks: With 25% of revenue from China, Nvidia may see more US export restrictions as a result of DeepSeek. Likewise, there may be a crackdown on backdoor shipments — interestingly, 20% of sales come from the small city-state of Singapore.
• Valuation vertigo: Even post-crash, Nvidia trades at 35 times forward earnings — that’s high for hardware.

The bull vs bear battleground

Several Wall Street analysts have reiterated their bullish positions on Nvidia following the DeepSeek-engendered selloff. However, there’s a host of things to consider that haven’t become entirely clear yet. This dependents on the validity of the Chinese claims that the DeepSeek model was made with older chips and for just $5.6m — 2% of the average cost in the West.

The bottom line on Nvidia

Nvidia remains the AI infrastructure king, but its crown is heavier. The stock’s volatility reflects a market reconciling revolutionary potential with certain realities. At current prices and given the DeepSeek upheaval, Nvidia offers neither the margin of safety of value stocks nor the hypergrowth certainty of 2023. However, for those believing AI’s “iPhone moment” remains ahead, dips like this could prove buying opportunities.

Personally, I’m waiting to hear more about the DeepSeek model before considering buying more Nvidia stock. With accusations of stolen data and concerns about its cost claims, there could be more to this story.

Investors usually buy dividend stocks for the passive income they provide. It’s unusual to hear of an income share that also has excellent growth prospects. That’s why I thought I’d look further into Topps Tiles (LSE:TPT) when I heard one analyst claim that the stock could be hugely undervalued.

Number crunching

Edison Investment Research used discounted cash flow techniques to come up with a valuation of 116p a share. This is more than three times the company’s current (31 January) share price. However, while commonly used, it’s important to note that the results of these types of calculations are sensitive to the assumptions made. A different combination of inputs produces a range of results from 85p to 418p!

Perhaps a better guide is to see how the company compares to its closest rivals. Edison looked at eight companies “exposed to consumer spending on the house” and found they were valued at 15 times forecast earnings for the year ending 30 September 2025 (FY25).

The price-to-earnings (P/E) ratio for Topps Tiles is currently a more modest 10.1. If it could achieve a multiple of 15, its shares would be valued at 55.5p. That’s a 48% premium to today’s price.

The analyst believes the company could achieve a higher valuation due to its ‘Mission 365’ initiative. The directors have plans to increase annual revenue to £365m (FY24: £251.8m). And they want to achieve an adjusted pre-tax margin of 8-10% (FY25: 4.8%). However, no timescale’s been specified.

The company believes it’ll achieve a higher rate of growth from trade customers. It’s recently established an online one-stop shop (Pro Tiler Tools) for those in the business.

The stock’s also good for income. Based on an annual dividend of 2.4p, the shares are presently yielding 6.4%.

What’s not to like about a company that’s potentially undervalued by over 200% — and in the top 50 on the FTSE All-Share index for dividends?

Potential problems

Well, there are a few issues that give me cause for concern. Firstly, it’s a small company. With a market-cap of around £70m, it doesn’t have the financial firepower to withstand a major shock.

Also, the company’s largest shareholder isn’t happy. According to The Times, MS Galleon, an Austrian private equity firm, recently wrote to the company saying it had “grave concerns that the business has lost its way in recent years”. It was also critical of the group’s “complete failure” to embrace the online revolution.

Some of their dissatisfaction could be explained by the Topps Tiles share price falling more than 50%, since February 2020.

Finally, I’m concerned that the company’s totally reliant on a UK economy that’s still showing signs of fragility.

What should I do?

Although never guaranteed, I see no immediate threat to the current level of dividend. However, even with a yield in excess of 6%, it’s not enough to tempt me to invest.

I think the company has potential. But I don’t see it easily increasing its revenue in a market where it’s already the dominant player.

And while I see there’s some scope to increase online sales – they presently account for around 18% of revenue – I think most people would prefer to see the tiles they are buying in-store.

For these reasons, I think there are better opportunities for me elsewhere.

UK shares are a popular choice for passive income. And with good reason. As I write, no fewer than 40 FTSE 100 shares offer forecast dividend yields of 4% or more.

Here, I’ll discuss how much an investor might need to generate a £2,000 monthly income and how long it might take to reach that target. I’ll then highlight an example investment to consider for a reliable income.

How much cash is needed?

A monthly income of £2,000 is equivalent to an annual income of £24,000. The standard advice often used by financial advisers is that 4% is a safe withdrawal rate, with the amount withdrawn increased in line with inflation each year.

Based on that 4% rule, my sums suggest an ISA fund of £600k would be needed to support an initial £24k annual income.

How long would it take?

The maximum contribution allowed to a Stocks and Shares ISA each year is £20,000. The long-term average annual return from the UK stock market is about 7%. So someone investing £20k a year and earnings the average UK market return would take just under 17 years to build a £600k ISA pot.

The investor’s contributions would total £340k, with the remainder generated by investment gains and the miracle of compound returns.

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.

Where to invest?

How to invest the cash? One option is to try and outperform the market by investing in a portfolio of shares. The downside of this is that there’s no guarantee of success and it can require a lot of time.

One simpler option I’d consider would be to invest in a low-cost index fund. Returns will only ever be in line with the market average, but there’s no risk of underperforming.

When the time comes to start withdrawing an income, one option I’d consider would be to invest in a selection of investment trusts, focusing on so-called Dividend Heroes. These are trusts that have increased their dividends yearly for at least 20 years.

One of my favourites that I think is worth investors considering is City of London Investment Trust (LSE: CTY). Founded in 1891, it boasts 58 years of unbroken dividend growth and currently offers a 4.9% dividend yield. That’s significantly more than the 3.5% currently offered by the FTSE 100.

City’s objective is to provide long-term income and capital growth. Just over 80% of the portfolio’s UK shares, with the remainder invested in other developed markets, including the US.

For an idea of the kind of stocks the trust invests in, here are City’s top 10 holdings at the time of writing:

• HSBC Holdings

• Shell
• RELX
• Unilever
• British American Tobacco
• BAE Systems
• Imperial Brands
• Tesco
• NatWest Group
• AstraZeneca

One other attraction is that City of London pays shareholders an equal dividend every quarter, smoothing out the dividend income it collects from all of its shares.

Next step…

There are lots of possible ways to generate an income from shares. But the power of compounding means that the most important decision is to start as soon as possible, to let compound gains do the heavy lifting.

The Rolls-Royce (LSE:RR.) share price was the second-best performer on the FTSE 100 in 2024. Since the pandemic, the group’s shares have risen more than 600%. However, things have been a bit quieter in 2025. Since the start of the year, the stock’s increased by a more modest 6.4%.

Going for growth

To try and keep earlier momentum going, the company’s been looking at potential new markets. One that appeals to me is that of small modular reactors (SMRs). These factory-built mini nuclear power stations are based on a technology that started generating electricity in 1951. They’re intended to be cheaper, quicker to construct and more easily maintained than their larger cousins.

When construction started on Hinkley Point C, it was expected to be ready by Christmas 2017, and cost £18bn-£24bn. Today, it’s not going to be finished until 2031. And the final cost could be £48bn. This overrun means the operators will be paid £124.65/MWh — over 30% more than originally planned.

Rolls-Royce claims its SMRs will initially cost £2.5bn, and have a 60-year lifespan. The intention is to generate electricity for £40-£60/MWh. At this price, the International Energy Agency claims they’ll be competitive with offshore wind and large-scale hydro projects. 

But the technology’s unproven. And nuclear power has its critics. Greenpeace says it’s expensive, dangerous and produces too much toxic waste.

But despite this, Rolls-Royce is pressing ahead with its development programme. However, government delays means the first SMR’s unlikely to be generating electricity in the UK until — at the earliest — 2032. Initially, the engineering-cum-technology group had hoped to be up and running by 2029. To try and speed up delivery, it’s been holding discussions with potential overseas customers.

The billion-dollar question

So what could this mean for the Rolls-Royce share price? Given that we’re at least five years away from the first revenues earned, it’s difficult to say. But a report from IDTechEx predicts that the SMR market will — in 2033 — be worth $72.4bn, growing to $295, by 2043.

If Rolls-Royce could secure 10% of this — and the company achieves its mid-term (no date given) target of a 15% operating margin — it could initially add $1.1bn (£880m) to its bottom line.

At the time of writing (31 January), the company’s shares trade on a multiple of 20 times analysts’ forecasts of 2027 earnings per share (29.3p).

On this basis, SMRs could add £17.6bn to the group’s market-cap, which is currently £50bn. If realised, the group’s shares would be 35% higher.

Looking further ahead to 2043, the company’s stock market valuation could be £70bn more, easily taking its share price over the £10 barrier.

Don’t get carried away

However, these ‘back-of-an-envelope’ calculations must be treated with caution. The timescales involved are enormous and a huge amount could go wrong between then and now. 

But I do think SMRs could be a clever way of helping the world move away from fossil fuels. And even if Rolls-Royce is only able to secure a tiny fraction of the global market, it can only help its share price.

That’s why the stock could be worth considering as part of a long-term portfolio.

Looking for top FTSE 100 momentum stocks to buy next month? Here are two I believe could continue rising after a solid start to 2025 and are worth considering.

Barratt Redrow

Housebuilder Barratt Redrow’s (LSE:BTRW) also printed solid gains in recent weeks. Rapidly improving data from the residential property market suggests it might have further to go.

According to Zoopla, the UK housing market has enjoyed its strongest start to a year since 2022. House prices rose 2% annually in January as buyer demand improved 13% over the period.

This follows data from the Office for National Statistics (ONS) and Rightmove also showing house price growth at multi-year highs.

Questions persist over whether this momentum can continue as Stamp Duty costs for first-time buyers rise from April. However, a combination of rising earnings and a likely steady fall in interest rates could offset this impact on the broader market and keep the recovery going.

By combining its operations last year, Barratt and Redrow are in the box seat to capitalise on a sustained market turnaround. It aims to grow annual completions to 22,000 over the medium term, up from the 16,600-17,200 it has planned for this financial year.

Barratt Redrow’s latest trading statement showed private reservations up almost 37% between 22 August and 13 October. I’m expecting further encouraging gains when half-year numbers are released this month (12 February), a scenario that could — as it did following October’s statement — prompt fresh share price gains.

The FTSE firm’s low valuation certainly leaves scope for additional price upside. Its price-to-book (P/B) value currently sits at just 0.7. Any reading below 1 indicates that a share trades at a discount to the value of its assets.

Fresnillo

Fresnillo‘s (LSE:FRES) also up at the start of 2025, the precious metals miner boosted by rising gold and silver prices. A rosy outlook for these precious metals suggest the FTSE 100 digger could also have room for additional gains.

At around $2,775 per ounce, gold’s back at multi-month highs and within touching distance of a new record. As Mexico’s largest yellow metal producer, alongside being the world’s biggest supplier of silver, Fresnillo’s well placed to capitalise on a fresh move higher.

And there’s good reason to expect demand for safe-haven metals to keep growing, including threats of inflation-boosting trade wars, high geopolitical uncertainty, and robust buying appetite from central banks.

There’s another reason why I’m optimistic over Fresnillo and its share price. Silver’s role as both investment and industrial metal means company profits could also soar if economic conditions (and therefore manufacturing activity) improve. The grey metal’s used widely across a variety of applications including solar panels, consumer electronics and chemicals production.

The cheapness of Fresnillo shares could help its share price appreciate if metal prices retain their upwards momentum. Its price-to-earnings (P/E) ratio’s just 10 times for 2025.

Profits at mining shares can be volatile depending on operational performance. But Fresnillo’s strong record of production — which included gold output beating forecasts in 2024 — may help soothe any fears investors have.

Dividends are never, ever guaranteed. But investors can reduce the risk of payout shocks to their passive income by buying a diversified range of dividend shares.

Buying shares with stong earnings visibility and robust balance sheets can also deliver a strong (and rising) dividend income over time. With this in mind, here are two top dividend shares for investors to consider.

A £20,000 lump sum invested equally across them could — if broker forecasts are correct — provide a £1,600 passive income this calendar year alone.

Remember, however, that this is just an illustration, and that having a diversified portfolio of stocks is important to mitigate risk.

Primary Health Properties

Dividend yield: 7.5%

In return for exclusions on corporation tax, real estate investment trusts (REITs) pay at least 90% of their rental profits out in dividends.

This doesn’t guarantee a decent dividend every year. But unless a catastrophe comes along, it means investors can expect a reliable passive income.

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.

UK share pickers have around 50 to choose from today. Primary Health Properties (LSE:PHP) is one of my favourites because of its focus on the rock-solid medical property sector.

Whatever economic or political crises may come along, our demand for healthcare services remains largely undimmed. So Primary Health — which specialises in ‘first-contact’ medical facilities like GP surgeries, dentists, and NHS walk-in centres — remains stable every year.

What’s more, around 90% of the company’s rent roll is either directly or indirectly backed by government bodies, providing an added boost to profits visibility.

These qualities provide Primary Health with the financial resources and the confidence to provide a large and growing dividend every year. Indeed, City analysts are expecting the annual payout to have risen again in 2024, representing a remarkable 28th straight year of growth.

In the near term, this property stock’s share price may remain under pressure if interest rates fail to fall substantially from current levels. Higher rates adversely impact borrowing costs and depress net asset values (NAVs), weighing on overall profitability.

But on a long-term basis, I expect it to rise in value as demographic changes increase demand for new healthcare facilities, providing an opportunity for growth.

Care REIT

Dividend yield: 8.5%

Like Primary Health, Care REIT (LSE:CRT) has terrific growth potential in the coming decades. As Britain’s population rapidly ages, demand for care home beds should naturally follow suit.

It’s estimated the number of over-75s in the UK will roughly double over the next half a century.

I’m confident this will provide the foundation for strong and sustained share price and dividend growth at businesses like Care REIT.

Having been in existence for less than a decade, the trust doesn’t have the near-30-year dividend pedigree of Primary Health. But it’s still proven a reliable dividend grower, with shareholder payouts having risen every year since its creation in 2016.

This record is due to Care REIT’s focus on the ultra-defensive residential care sector. But this is not all. Its tenants are tied down on ultra-long rental contracts (the weighted average unexpired lease term was 20.1 years as of September). In addition, 100% of the firm’s leases are inflation linked, allowing it to offset the impact of rising costs on annual earnings.

Despite interest rate sensitivity and labour shortages impacting the care industry, I think this is another top dividend share to consider.

Some costs in life are best avoided, like restaurant corkage or ATM withdrawal fees. And a Stocks and Shares ISA’s an excellent way of keeping these down when it comes to investing. 

Without taxes on capital gains and dividends, investing regularly in an ISA can be a great strategy for trying to build wealth and earn passive income. But finding the right stocks to buy each month is also important.

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.

Growth: Porvair

In the world of growth, Porvair’s (LSE:PRV) a stock that could be in for an interesting February. The company makes filtration products for aerospace, laboratory, and industrial settings.

Its products benefit from significant barriers to entry and earnings per share have grown strongly over the last decade. But selling into cyclical end markets can bring risk when things turn downwards.

With both Boeing and Airbus reporting production problems recently, aircraft production’s been lower than in previous years. And that might reduce demand for Porvair’s products in the short term. 

The company reports earnings on 10 February and I’ll be watching closely. If the stock falls in a meaningful way as a result of any short-term disruptions to sales, I’ll be looking to take advantage.

Value: Lloyds Banking Group

Shares in Lloyds Banking Group (LSE:LLOY) got a big boost in January with some positive news about the ongoing investigation into car loans. But I think there could still be interesting value on offer.

On a price-to-book (P/B) basis, the stock’s roughly where it was five years ago. By contrast, Barclays and NatWest are trading at much higher multiples than they were as a result of interest rates rising. 

The car loan investigation’s still a risk – and more so for Lloyds than the other UK banks. But the question for investors is whether the current share price is enough to offset this.

I think it might be. That’s why I’ll be paying close attention to what management has to say on the subject when the company reports earnings on 20 February. 

Dividends: Supermarket Income REIT

With dividend stocks, I think the real estate sector looks interesting. And shares in Supermarket Income REIT (LSE:SUPR) are trading at their lowest levels since the company went public in 2017.

Tesco and Sainsbury’s account for a lot of the firm’s income. And while neither’s likely to default on its rent, a heavy reliance on them doesn’t put Supermarket Income REIT in a strong negotiating position.

However, the stock currently has a 9% dividend yield, which might provide a decent return by itself. On top of this, the company’s rental contracts increase with inflation, which also removes this threat.

I’m generally wary of stocks that come with high dividend yields. But while there are clear limitations with Supermarket Income REIT, I think dividend investors should consider it seriously right now. 

UK stocks

I think February could be an interesting month in the UK stock market. I’ll be looking closely when Lloyds and Porvair report to see if a long-term opportunity’s being masked by short-term issues.

If not, Supermarket Income REIT might be the stock for me to buy. A lot of my investing this month will come from reinvesting dividends, so I have time to see what happens while I wait for the cash.

Getting into the stock market does not take a couple of million pounds, or even a couple of hundred thousand. In fact, it does not even take a couple of thousand. It is possible for a stock market beginner to start investing with just a couple of pounds a day. Just like this.

A regular investment habit

Putting aside £2 a day could help form a long-term, regular saving habit. The money could soon add up. In a year, it would provide £730 to invest. On top of that, £2 is only a starting amount. Over time, an investor could choose to put in more if their finances allowed.

An obvious first move would be to set up a share-dealing account or Stocks and Shares ISA and start putting the money into that on a regular basis.

Getting to grips with investment

Before putting money into the market it is worth spending some time to learn more about how the stock market works.

For example,  an investor should understand ideas like reducing risk through diversification (harder on a very small budget, but still possible and important). And why valuation matters not just how strong a business is and how to be a good investor.

Finding shares to buy

Next, they could start looking for shares to buy. When they start investing (and beyond, in many cases), investors may overestimate their skill level in choosing shares and underestimate the possible impact of risks.

So I think it can pay to start with a more not less conservative approach focused on wealth retention more than aiming for dramatic wealth creation.

As an example of a share an investor should consider, I would point to J Sainsbury (LSE: SBRY).

The demand for groceries is large and resilient. Sainsbury’s is able to compete effectively in that market, both online and offline, thanks to a strong brand, large customer base, a well-developed loyalty scheme and store estate.

It has a dividend yield of over 5%.

I do see risks. The grocery industry is highly competitive, squeezing profit margins. The company’s plans to cut costs by getting rid of lots of staff could hurt customer service, leading to some shopping elsewhere.

Over the long term though, I think the outlook for the FTSE 100 retailer looks decent.

Being realistic about expectations

At a yield of 5% or so, investing £2 a day for one year could earn just over £36 in dividends annually. Dividends are not the only focus when people start investing as growth can also be important. Individual investors can decide their own focus, between growth and income shares.

That £2 a day, even within a matter of months, could be generating more money in the form of dividends. By ploughing that back in, continuing to put in £2 a day (or more) and buying shares to hold for the long term, I think someone could start investing now with no experience and potentially build the foundations for wealth creation in years to come.

We’re one month into the year and I’d never have guessed which FTSE 100 stock would be leading the charge in 2025.

It’s not last year’s double-your-money winners British Airways owner International Consolidated Airlines or growth monster Rolls-Royce, but African telecoms operator Airtel Africa (LSE: AAF).

The shares surged 27.1% in January. It swept to the top of the 2025 leaderboard after posting a strong set of results on 30 January, while its second $100m share buyback added fuel to the rally.

Someone who had put £10,000 into Airtel Africa shares at the start of the year would now have £12,710. That’s an impressive return in just a few weeks, but enough of that nonsense. At The Motley Fool we see investing as a long-term process, not a get-rich-quick game. 

So can the £5bn company now build on its stellar results, or will profit-takers whittle the growth away in the weeks ahead.

What’s driving the Airtel Africa share price surge?

Airtel Africa has been on my radar for a while, and Thursday’s (30 January) fab results reminded me of its huge potential. The company operates across 14 fast-growing African markets, where demand for telecoms and mobile money services continues to grow.

In the nine months to 31 December, the group’s total customer base rose 7.9% to 163.1m, while data customer numbers surged 13.8%. 

Revenue jumped 20.4% in constant currency terms, with mobile money revenue alone growing 29.6%. Profit after tax skyrocketed from just $2m to $248m year on year.

CEO Sunil Taldar was bullish about Airtel’s prospects, highlighting the company’s “focus on speed and quality execution”.

Not all the signals are positive. Currency devaluations remain an issue. Notably the devaluation of the Nigerian naira, which hit the group’s revenues once converted back into sterling terms. This remains an issue, with Thursday’s results showing revenue declined by 5.8%, largely thanks to the embattled naira. They have been signs of African currency stabilisation lately.

Can the FTSE 100 group continue to fly?

The shares are up 27.1% this year and 97% over five years, albeit with plenty of volatility in between. So is this the right time to buy?

It’s always tricky investing after a sudden surge, as profit-taking can lead to pullbacks. Airtel Africa still looks attractively valued on a forward price-to-earnings ratio of just 10.6 for the financial year starting in April 2025. However, that’s based on sales rising almost 200% over the year ahead. Any earnings miss will be punished.

The company also offers a decent trailing dividend yield of 3.3%, adding an income element to its appeal. And its ongoing expansion and rising smartphone adoption in Africa does create a compelling long-term growth story.

But risks remain. Currency fluctuations could continue to hit reported earnings, but net debt is my biggest worry. This jumped from $3.28bn to $5.27bn year on year. That must be set against positives such as its growing customer base, improving margins and share buybacks.

Given recent performance and strategic investments, I’m keeping a closer eye on this rising star. But I won’t buy it in February. Shares so often retreat after a dramatic leap, and this one still has risks. It’s not the right call for me today.