It is fair to say that 2022 has been challenging. Growth shares have fallen to reduce their sky-high valuations. Value has continued to be neglected, falling less than growth but still underperforming. It is only the dividend investing sector showing signs of promise. Yields have been rising over the year, and this can be a way to protect a portfolio against negative performance.

Importance of dividends

To illustrate this further, the FTSE 100 is down over 4% year to date, resulting in a seemingly wasted year. All attempts at share price gains are likely to have been eroded over the year. However, the average yield is 4%, meaning that a dividend-focused portfolio would have maintained its value in the last 12 months.

For this reason, I have looked for one company within the FTSE that pays significant dividends and has high-quality fundamentals. This approach can act as a valuable form of diversification within a portfolio. It is also an excellent way of generating passive income from my investments.

To make the share selection process more efficient, I have used an index filter. This screener looks for companies paying a fair dividend while also having a range of strong underlying fundamentals. As a result, I identified Britvic (LSE: BVIC), the manufacturer of soft drinks within the UK and Europe. The shares struggled with consistent growth over the last few years, rising in 2021 before falling almost 20% in 2022.

However, the yield drew my attention, as it is currently paying a dividend of 3.3%. This is forecast to reach 3.8% next year. Furthermore, the company has produced this dividend consistently for 16 years and has reinstated its dividend growth over the previous year. It also has a dividend coverage ratio of 1.8, indicating that the current level can be comfortably paid using earnings per share (EPS).

Attractive fundamentals

The underlying fundamentals are also attractive, with sensible profit margins and a reasonable level of earnings generation on invested capital. this is a core indicator of a share’s quality. The forecast growth for the company is also encouraging, with turnover expected to grow 13% and EPS to rise over 25%. These growing fundamentals further strengthen my confidence in the dividend, as earnings need to continue rising to ensure yields grow over the years.

However, it is essential to note that there are a few negatives to take into consideration. The current price-to-earnings (P/E) ratio is almost 17. This is reasonably high despite the share price fall over the last year. Additionally, debt as a proportion of market capitalisation is somewhat elevated. In fact, it has increased over its three-year average, which could put additional pressure on dividend payments in the future.

Nonetheless, when combined with strong underlying fundamentals, this current yield presents a good opportunity in the current market. I want to add this dividend share to my portfolio at the beginning of 2023.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has recommended Britvic. 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.

This has been a tough year for investing. The headwinds of consistently elevated inflation and economic slowdown have contributed to many shares falling, with general indexes far below pre-2022 levels. Many of my favourite sectors have suffered intensely, making finding the right opportunity harder than in previous years.

The FTSE 100 is down over 4% year to date, and the wider FTSE 350 is down almost 8%. From an investment perspective, this has resulted in a seemingly wasted year; all attempts at share price gains are likely to have been eroded on average.

Finding new opportunities

This past performance is an unfortunate reality, but given that the past can’t be changed, I’m focused on new opportunities. To make my life easier, I have used a filter to scan the FTSE and find shares that match my particular criteria.

Previously my filters have ranged from simple price-to-earnings (P/E) ratio scanners to more complex value or growth screeners. This time I have decided to strip back the process by looking for companies trading at their year low. Mass sell-offs often mask good quality companies trading at a discount. These are the ones I want to find and add to my portfolio.

A tempting company

One share identified by my filter was Auto Trader Group (LSE: AUTO), a digital automotive marketplace operating in the UK. The company has a strong track record of share price growth, rising almost 190% in the six years between floating on the exchange and the end of 2021. However, 2022 has seen the price fall 27%, meaning it recently hit a year-low price of 486.2p.

Despite these falls, the company’s underlying fundamentals are solid. It has high profit margins and efficiently generates returns from invested capital. Additionally, free cash flow levels are intense, and debt levels are low, helping to illustrate the share’s quality. It even offers a dividend yield of 1.6%, which has been paid consistently for the last seven years and is forecast to grow to 1.7% next year. This is quite rare for a growth company, as often all spare earnings are invested back into the company, and is a positive.

However, the company currently has a P/E ratio of over 20, making it not exactly a value opportunity. This is despite the fall in share price and could indicate the company is returning to a more reasonable price. Further evidence for this comes from the forecast growth in earnings per share (EPS) of just under 5%. This is below the three-year average of 8.2%, and indicates a potential slowdown in growth.

Nonetheless, I would add Auto Trader to my portfolio once I attain the necessary cash. The company presents a good opportunity to invest in a high-quality company at a considerably discounted level.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has recommended Auto Trader. 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.

A Stocks and Shares ISA is a great vehicle for both medium-term and long-term investing. It allows all investments within the account to grow free from capital gains and income tax. Unsurprisingly I’ve found the use of this type of ISA appealing and consequently have looked for new shares to include. I tend to focus primarily on long-term investing, looking for good-value companies with solid fundamentals.

Due to the longer duration of ISA-focused investments, I like to look for companies that pay a good dividend yield. I want companies that have paid an above-average dividend consistently for several years, along with growing it annually. The aim of this approach is that the beauty of compounding can occur within the ISA, allowing me to build up a significant return over the years.

Inchcape

The first share on my list is Inchcape (LSE: INCH), a distributor of vehicles in the UK, Europe, and Asia. After a strong 2021 with price growth of over 41%, the company struggled in 2022, falling 16.8%. Despite this, the underlying fundamentals are very appealing, with strong cash generation. The company also has low levels of debt, and significant forecast earnings growth.

The main reason for my interest in the company is the yield of 3%. It is also forecast to hit 3.7% next year. The dividend has been paid consistently for 12 years and is covered by earnings per share (EPS) 2.5 times. This is a good sign and indicates the dividend is relatively safe.

It is, of course, essential to note that profit margins are fairly low, which could cause issues if turnover growth begins to slow. Additionally, the dividend was reduced considerably in 2020 and has only grown over the last year, so this will be important to watch in case it is reduced again.

Nonetheless, the company still represents a good long-term investment opportunity. I would therefore consider adding this share to my Stocks and Shares ISA in 2023.

Glencore

The second share on my list is Glencore (LSE: GLEN), one of the world’s largest commodity traders and producers. The company has had an extremely rapid share price rise over the last two years, gaining 60.9% in 2021 and 40% in 2022. Furthermore, underlying fundamentals are impressive, with solid cash flow, reasonable profit margins, and significant growth forecasts. Turnover is expected to increase by over 30% next year, and earnings per share (EPS) is forecast to grow by a massive 187%.

I find the yield of 4.4% very appealing, more so as it is expected to hit 9.6% next year. This forecast growth is impressive, especially given that the dividend has been paid consistently for the last 11 years. It is also forecast that dividend cover will reach 2.7, indicating that EPS can sustain this new dividend level.

It is important to note that earning margins are pretty low, even after doubling from the three-year average level. Also, debt levels were very high over the last three years and are still significant at almost 47% of market capitalisation.

However, I believe that the company’s forecast dividend growth represents a good opportunity for my Stocks and Shares ISA. Therefore I would be keen to add the company to my portfolio in 2023.

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.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

I’m not ashamed to say that I’ve been a bit of a growth share sceptic over the years. When building an investment portfolio, there are three main buckets to choose from — income, value, and growth. So I have found myself often going for opportunities within the first two buckets and neglecting my growth allocation.

Growth investing

My approach was mainly due to the apparent simplicity of selecting value and income opportunities, especially in contrast to the complexity of successful growth investing. What makes a good value or income investment is often clear-cut and can be seen by looking at underlying fundamentals. On the other hand, a growth investment requires faith. I have to hope that the company’s performance will catch up and exceed the current share price.

Consequently, finding the right opportunity within the growth sphere can take time and effort. This sector is known for having much higher price-to-earnings (P/E) ratios, a lack of stable income, and sometimes an absence of profitability. Despite this, I can identify promising opportunities with strong underlying fundamentals by using a growth investing filter.

A prime example of what I am after is RELX (LSE: REL), a UK information and analytics business. The share price has performed surprisingly well following the pandemic. It gained 34% in 2021 and is down just 2.6% this year. Furthermore, the company has grown almost 300% in the last 10 years, consistently expanding each year.

Growth characteristics

When looking at analyst forecasts for RELX, it is clear why it would be considered a growth company. Turnover is forecast to rise by 16.9%, and underlying profit is set to increase by nearly 43%. This level of growth far exceeds the roughly 5%-10% generally associated with a value investment. Furthermore, earnings per share (EPS) have grown by 13% on average every year for the last decade, a very impressive level.

In addition to these core growth characteristics, the company has a set of very strong fundamentals. Profit margins are high, debt levels low, and the company is achieving significant cash flow generation above its three-year average. And RELX has significant efficiency in generating income from invested capital, a good indicator of quality.

However, it is trading at a P/E ratio of over 26, making it quite expensive in the current market. This could lead to the share price contracting further, as it is potentially overvalued. Additionally, growth has been slowing over the last few years, so the 13% average may not be achievable going forward.

Despite this, RELX has very encouraging underlying fundamentals and is a growth company I would be keen to invest in. Therefore I will watch the share and aim to add it to my portfolio going into 2023.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX. 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.

From the beginning of my investment journey, I’ve been intrigued by dividend-paying stocks. I always liked the idea that I could invest in a quality company that would grow my capital over time while paying me a regular income. Therefore, I’ve been keen to find new opportunities to add to the income-generation portion of my portfolio.

My approach to dividend investing

This approach to investing isn’t straightforward. Previously I tried to buy the highest-yielding shares and hoped this would generate consistent income over the years. Unfortunately, if the company’s share price begins to suffer, this could mean all passive income is offset by capital losses. Consequently this wouldn’t achieve a great deal in the long run.

For this reason, I’ve shifted my focus to real estate investment trusts (REITs). These instruments are more akin to a property investment than a traditional share and often provide a stable dividend yield. A REIT is a company that owns or finances physical property. By using pooled funds from a range of investors, they can allow a steady dividend income to be achieved by owning shares in the company.

New opportunity

In pursuit of this dividend goal, I found myself drawn to Big Yellow Group (LSE: BYG). It’s a REIT that acquires, owns, and manages self-storage facilities within the UK. After a strong rebound from the pandemic, growing 55.6% in 2021, the shares have struggled this year, down over 33%. 

The company currently offers a dividend yield of 3.7%, which is forecast to reach 3.8% next year. This is certainly not the highest yield available for a REIT, however the growth and consistency of this dividend is a core factor. It’s been paid consistently for 13 years and has grown for 12 years, which is an encouraging sign. This growth has averaged 8.2% over the last three years, and is expected to be 4% next year. Despite 2023 being below the three-year average, this is a fair level given the share price contraction.

Underlying fundamentals

The finances of Big Yellow Group are also attractive, with low debt levels and strong cash generation. The company has also achieved impressive earnings generation on invested capital, a core indicator of a share’s quality. Furthermore, turnover is forecast to grow by 8.7% next year and has grown by an average of 11% over the last three.

However, it’s important to note that the price-to-earnings (P/E) ratio is currently just under 22, which is relatively high, despite the considerable share price falls fall this year. Additionally, dividend cover, which looks at how easily dividends can be paid out of earnings per share, is just 1.3, which could lead to future dividend reductions.

Nonetheless, I believe this REIT presents an opportunity to access a fair dividend yield, that’s stable and growing. However, I’m not jumping in just yet and am keen to monitor this dividend stock over the next few months, with the aim of adding it to my portfolio in 2023.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

As we begin to leave a tough 2022 behind, I am looking for new investment opportunities to generate consistent passive income for my portfolio in 2023. Finding a good quality company that can provide a stable dividend, year after year, is essential to achieving this goal. I want to find a share that has potentially underperformed in the last year but still has strong underlying fundamentals. It is this combination that could present a great income opportunity.

In the past, I have taken a fairly simplistic approach to finding income-generating opportunities within the market. This often involves picking shares with the highest dividend yields and then holding for years at a time. The hope is that these gains will steadily compound.

However, this has not always been the best approach, as share price falls can sometimes erode passive income. I now try to find shares that are already low priced.

My new approach

My new focus is on finding high-quality companies that have also suffered a fall in share price. This may mean they are less likely to experience further declines. For me, a high-quality company is one with steady earnings growth, the potential to generate significant free cash flow, and low levels of debt.

I am also looking for shares whose yield is forecast to grow considerably in the next year. This will amplify the compounding effect of the dividend. If a company can continually increase its dividend year on year, it can steadily boost my monthly passive income without any changes to my investment strategy.

For that reason, I have been looking at Mondi (LSE: MNDI), a company that produces packaging and paper products. The share has suffered considerably over the last year. The price is down over 17% in 2022 and down 26.5% from its peak in 2021. As a result, it is now trading at a price-to-earnings (P/E) ratio of 11.3. It is forecast to reach just 8.9 by next year.

Dividend potential

Mondi is tempting as it offers a yield of 3.6% and has paid a dividend consistently for the last 15 years. It also has a dividend cover ratio of 2.4, indicating that it can comfortably continue to pay this dividend from its earnings per share (EPS). This level of cover is a good indicator of the company’s underlying fundamentals.

However, it’s important to note that the dividend level has fallen following weaker performance compared to pre-pandemic levels. The company’s turnover and profits are still below 2019 levels, despite a significant rebound from the 2020 financial year. It will be important to watch these fundamentals, as the company’s underlying performance needs to recover fully for the dividend to keep growing.

I think Mondi presents a good passive income opportunity for my portfolio, as it provides a consistent dividend yield in a company with strong underlying fundamentals. However, I would like to wait until the beginning of 2023 before adding the share to my portfolio.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

The FTSE 100 has had a tough time in 2022, down almost 5% year to date, combined with significant volatility and extended downturns throughout the year. Consequently, this has made it incredibly difficult to decide where I should put my money. The sectors I considered favourites have suffered just as intensely, making finding the right opportunity harder than in pre-pandemic times.

For this reason, I have decided to look at the primary UK market, as the higher market capitalisations, combined with international exposure, may help to improve performance over the coming years and stabilise the share price in the short term. To find the right opportunities within this index, I have decided to filter the 100 shares by those trading near their lowest levels this year.

Poor share price performance

My filter identified Vodafone Group (LSE: VOD), the mobile and fixed-line network provider operating in the UK and EU. According to my index screener, the company hit its year-low share price in the last three days and is down 12% in 2022. Furthermore, it has been a tough few years for Vodafone, consistently generating negative share price returns over the last five years.

Underlying fundamentals

Despite this poor share price performance, the underlying fundamentals have some encouraging signs. Profit margins are strong and almost 50% above the three-year average. Free cash generation is impressive and has been at this elevated level for the last few years. The efficiency of returns generated from invested capital is low. However, it is above the three-year average again, so this is an encouraging sign.

Another encouraging sign is that Vodafone currently offers a dividend yield of 7.9%, which is forecast to reach 8% next year. Not only is this level considerably higher than the index average of 4.1%, but it has been paying this dividend for 30 years consistently. This is a very promising sign, as consistent dividend income could help to partially offset the poor share price performance over the last few years.

Potential issues

However, it is essential to note several less positive signs within Vodafone’s fundamentals. The company currently has a very high level of borrowing, with a debt-to-market capitalisation ratio of 215%. This is high in and of itself and has significantly increased from the 159% average level over the last three years.

In addition, earnings growth has slowed considerably, with turnover forecast to grow by just 0.5% in 2022. The three-year average has still only been 1.4%. Furthermore, earnings before interest and tax (EBIT) are forecast to decline by almost 11% next year, indicating that the share price underperformance may continue.

Therefore, I would not want to add Vodafone Group to my portfolio at this moment. Still, I would be keen to watch the company in 2023. The share price declines, combined with high dividend yield, could present a substantial opportunity, although monitoring underlying earnings and debt levels will be essential.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has recommended Vodafone. 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.

The FTSE 250 is a great place to start when looking for an investment opportunity. These companies have lower market capitalisations than the much bigger firms in the FTSE 100, with an average value of £1.2bn. This level is considerably lower than the near £20bn average of the FTSE 100. Yet the fact that these companies are smaller can often make it easier to find excellent opportunities.

The FTSE 250 can be neglected by institutional investors. That means high-quality companies can, at times, trade at levels that don’t reflect their underlying fundamentals. This is especially apparent within the growth sector. Rapidly growing companies may drop considerably almost overnight when they fall out of favour with these more prominent investors.

One such potential opportunity is Softcat (LSE: SCT), a UK-based technology infrastructure and service provider. The stock has struggled in 2022, down 34.2% and down over 46% from its peak in 2021. This fall is a prime example of how a company can go from achieving stellar share price growth year on year to falling rapidly. And it;s done this even when the fundamentals have remained mostly the same.

Underlying fundamentals

When looking at the underlying fundamentals of Softcat, I’m pleasantly surprised. It has very high levels of cash generation, sensible profit margins, and extremely high efficiency at generating income from invested capital. In addition, the company has low levels of debt and impressive earnings forecasts.

Turnover is forecast to increase by 20% next year, almost double the average growth over the last three years. Furthermore, bottom-line earnings per share (EPS) are expected to increase by 10.5%, a very encouraging sign. Both turnover and profit have increased consistently over the last seven years following the company listing on the market in 2015.

Dividend-earning potential

Another appealing element of Softcat is that the company is currently paying a dividend of 1.8%, which is forecast to reach 3.6% next year. This dividend has been paid consistently for the last six years and has grown for the previous five. This is quite unusual for a growth company. Any additional income is often used to fund expansion rather than pay dividends.

Future headwinds

Despite these appealing underlying fundamentals, it’s important to note that the company currently has a price-to-earnings (P/E) ratio of a high 24.6. This is forecast to fall to just over 22 next year. However, even after this decline, it will be around double the index forecast average of 10.2.

Furthermore, this elevated level is after the considerable share price falls that have taken place over the last year. This high P/E level could indicate that the company is overvalued, so subsequent falls could be justified. These may simply bring the share price closer to a more realistic level.

Nonetheless, I believe Softcat presents a promising opportunity to add a high-quality growth company at a significant discount. I’d like to add it to my portfolio once I get the necessary funds.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has recommended Softcat. 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.

When building my investment portfolio, I’ve always been keen to include a selection of income shares. The goal of these holdings is to generate a consistent passive income that can compound considerably over the years.

I’ve found this acts as a good form of diversification in addition to my portfolio’s expected growth and value investments.

In the past, I focused on picking companies that offer the highest dividend, thinking this was the only way to build a good income portfolio. But I’ve decided to consider a new approach to income investing that looks at companies that have paid and grown their dividends for many years. These companies may only offer a yield of 1%-2%. However, the goal of this approach is for this dividend yield to gradually increase over the years.

Ashtead Group

The first company on my list is Ashtead Group (LSE: AHT), a construction equipment rental giant. It operates in three key regions — the US, Canada, and the UK — with over 1000 rental locations worldwide. The stock currently offers a dividend of 1.5%, but is forecast to reach 1.8% in 2023.

This current yield isn’t the most impressive and is below the index average of 3.8%. However, the fact that it’s has been paid consistently for 17 years — and has grown for 16 — interests me. 

Ashtead’s underlying fundamentals are also strong, with good profit margins, efficient earnings generation from capital, and reasonably low debt levels. But it’s important to note that despite the share price falling 25%+ this year, it’s still trading at a price-to-earnings (P/E) ratio of 16.4. This could suggest the company is overvalued even with its quality fundamentals.

Nonetheless, I think the opportunity to access such a consistent dividend yield is worth paying a premium for. So I’m keen to watch Ashtead in 2023 and will consider adding it to my portfolio.

RELX

The second company on my list is RELX (LSE: REL), an information and analytics business based in the UK. The company currently has a dividend yield of 2.2%, forecast to increase to 2.3% next year.

Relx has paid a dividend consistently for three decades, which is why I consider it a good income-generating share. However, the yield is lower than many examples of dividend-focused investments.

That being said, the stock is currently trading at a P/E ratio of over 26, making it quite expensive in the current market. The current yield of 2.2% is once again below the average FTSE 350 yield, so it may not justify its expensive price.

Yet RELX has very encouraging underlying fundamentals, and the consistent yield may be worth paying a premium for. Therefore I’ll monitor RELX next year to determine whether I should add the company to my portfolio.

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Gabriel McKeown has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX. 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.

Due to the potential investment opportunities available within the UK market, I often find it helpful to use a filter to scan all FTSE 100 shares. These filters range from simple price-to-earnings (P/E) ratio scanners to more complex value or growth screeners. In this case, I have decided to look for companies currently trading at their one-year low.

The economic headwinds of consistently elevated inflation and economic slowdown have contributed to shares falling. Many general indexes are down far below pre-2020 levels, prior to the pandemic. These are certainly not ideal market conditions, but good quality companies can often be found hidden in mass sell-offs. It is when a strong share is trading at a discount that I want to add it to my portfolio.

Quality at a discount

I have found one company in the main FTSE index that is trading at its lowest price this year. I would be tempted to add it to my portfolio, if I didn’t already own it. When looking at discounted shares, I do have to remember that they are likely to be trading at a lower level for a reason. This doesn’t mean they can’t still present exciting investment opportunities. But the potential risks need to be considered when I decide whether to add them to my portfolio.

The share identified by my filter is Hargreaves Lansdown (LSE: HL). The company operates direct-to-investor services in the UK, providing managed funds, investment execution, and support services.

The company has suffered over the last three years. The share price has fallen 45.3% in 2022 and is down almost 70% since its peak in 2019. In addition to this, the company has struggled with negative publicity since the infamous Woodford fund collapse. This has increased uncertainty around the company and contributed to the current reduced price.

Underlying fundamentals

Despite the decline in the share price, the Hargreaves Lansdown has impressive profit margins and cash generation when looking at the underlying fundamentals. It is also forecast to grow turnover by 11.3% in the next year, considerably above its three-year average of 6.7%. Furthermore, the company has very low levels of debt and holds significant levels of cash on its balance sheet.

Another tempting factor is the current dividend yield of 5.4%, which is forecast to reach 5.6% next year. This level is considerably above the FTSE 100 average yield of 3.7%. Furthermore, this dividend has been paid consistently for 15 years and has grown for seven years. And, the company can comfortably cover dividend payments with earnings per share (EPS), improving its stability.

Current price multiple

It is important to note that the company currently has a price-to-earnings (P/E) ratio of almost 15, making it not quite a value opportunity. This is despite the dramatic fall in share price and could indicate that the company is returning to a more reasonable pricing level.

Also, the chief executive has identified considerable economic and geopolitical turbulence as a core driver of reduced investor confidence. These headwinds impacted the levels of new business generated by the company and resulted in current EPS falling compared to 2021.

Nonetheless, I would add Hargreaves Lansdown shares to my portfolio if I hadn’t already.

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Gabriel McKeown has positions in Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown. 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.