UK's New State Energy Company Will Spend £1 Billion on Grants
The UK's new state-owned energy company plans to spend about £1 billion ($1.4 billion) on grants, carving out a significant chunk of the taxpayer money it receives.
The government announced it was setting up Great British Energy last year, saying the firm would own and run clean-energy assets. It's part of a bet that the state needs to play a bigger role to reach UK climate goals and help bring down energy bills. But there's been little clarity on how the company will actually operate and where it will allocate funds.
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I've been loading up on this cheap FTSE 100 share this week!
This week I bought some more shares in a FTSE 100 company that already features heavily in my portfolio. In fact, although I always want to keep my portfolio diversified, I decided that topping up my holding in this company when the share price looked particularly cheap could potentially prove to be a lucrative move. The FTSE 100 share in question is JD Sports (LSE: JD). Why am I so excited about it? Legendary investor Warren Buffett talks about buying into great companies at attractive prices. In my opinion, JD Sports currently ticks both those boxes. To start, consider the business. JD's focus is on selling clothes, shoes and other athletic goods. That is a large market and one that is likely to endure. The customer base also seems to be happy to shell out on pricy goods even when the economy is weak, something I see as a bonus although I do still fear that a deep enough economic downturn could hurt sales. JD Sports has built economies of scale and also has a substantial international reach. It has built a sizeable digital presence but not at the expense of abandoning bricks and mortar. In fact, it has been opening hundreds of stores in recent years and this month opened its largest one yet, at Manchester's Trafford Centre. With a strong brand, regular special products unique to JD, loyal customer base and ongoing growth plans, I reckon this is an outstanding business. But the road has had some bumps. Last year, JD sports issued profit warnings and it has reined in its aggressive store opening programme. A key supplier Nike has had a difficult few years and ongoing weakness in the brand's sales is a risk for JD Sports too given how big a proportion of its sales are of Nike products. But does that justify a share price in pennies? The FTSE 100 company has no debt (excluding lease liabilities) and a market capitalisation of £4.2bn. Yet last year's profit before tax and adjusting items came in at £0.9bn. To me, that makes the current share price in pennies look unreasonably cheap. In a tough market with uncertain risks like tariffs and unpredictable international shipping rates, the FTSE 100 company's profits this year and in subsequent years may not match last year's performance. However, I remain upbeat about the long-term story here. JD's investment in growth over recent years is paying rewards already as far as I am concerned. The next couple of years will see major sporting events that could help boost customer demand. The company has a proven model that is highly cash-generative and could help support further growth without the company needing to take on debt to fund it. As far as I am concerned, the current JD Sports share price is a bargain. I acted on it because I did not want to miss what I see as an excellent opportunity. The post I've been loading up on this cheap FTSE 100 share this week! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has positions in JD Sports Fashion. The Motley Fool UK has recommended Nike. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Bayern Munich to help Liverpool strike MOMENTOUS Alexander Isak deal
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How much would someone need to invest to earn a £10k passive income each year?
One simple but common way to earn passive income is to buy shares that pay dividends. Dividends are never guaranteed, so this is not a surefire scheme. But I think it is possible to set up passive income streams with a fairly high sense of confidence in them lasting – by buying a diversified mix of shares in high-quality companies. To illustrate, if someone wanted to target £10,000 a year in passive income, here is how they could go about it. One practical step upfront would be to set up a way to actually buy dividend shares. To that end, the investor could look into options for a share-dealing account, Stocks and Shares ISA, or trading app. I mentioned above the idea of buying shares in high-quality companies that look promising when it comes to future potential passive income streams. Dividends are paid out of spare cash that a company does not want to put to other uses, such as building factories or hiring new staff. So I look for companies that already have proven business models and look set to keep being highly cash generative. As an example, one share I think investors should consider is FTSE 100 asset manager M&G (LSE: MNG). The company's business model is pretty simple and, thanks to the large sums involved, even modest fees and commissions can soon add up. M&G has a customer base in the millions across multiple markets. I reckon its strong brand is an asset when it comes to attracting and retaining clients. I also like the fact that its dividend policy is to maintain or raise its dividend per share each year. Dividends are never guaranteed at any company. So whether M&G is able to keep delivering on that aspiration (as it has done so far) will depend on its future business performance. One concern I have in that regard is M&G's recent struggles to tempt investors to bring in more new funds than they withdraw. If it cannot reverse that trends, it could mean smaller free cash flows in future. Something I like about M&G, though, is its high dividend yield of 7.8%. That means that £1,000 invested in M&G shares today will hopefully earn £78 of passive income annually. How much needs to be invested to hit a target annual income depends on yield. For example, at a more modest 5% annual yield, a £10,000 annual passive income would require a £200,000 portfolio. That 5% is still well above the FTSE 100 average. At different yields, a higher or lower amount would be needed. But as dividends are never guaranteed, I do not just chase yield. I always look at how a company earns its money and consider how sustainable its free cash flows look. What if someone wanted to target a £10,000 passive income but does not have £200,000 to spare? They could build up to it, even from zero today, by drip feeding some money regularly into their ISA or share-dealing account. The post How much would someone need to invest to earn a £10k passive income each year? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended M&g Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better i</a>nvestors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
