Over the course of 2022, the Woodbois (LSE: WBI) share price has climbed to 9.4p and fallen back again. It’s dropped as low as 2.6p, and come back up. Where might it go next?

The Woodbois stock gyration makes it look like it’s a new growth stock in its early phase, with profits hopefully just around the corner. But that’s not exactly the truth.

Woodbois in its current guise came into existence in 2019. But that was the result of a restructuring, a new fund raise, and a renaming from its previous identity as Obtala Limited.

In that past life, the shares have been through ups and downs that were a lot bigger than the latest. As Obtala, the price reached 22.5p in 2017 before falling back to earth.

And a few years before that, in 2011, the shares peaked at nearly 54p. That was 18 times today’s 3p Woodbois share price.

Groundhog day?

And looking at the company’s last set of half-year results before its rebirth, I see something scarily familiar. The company was reporting an increase in revenue, but an operating loss of $4.8m. At the time, Obtala told us that “year on year revenues are on track to deliver further growth in 2018“.

When that year’s final results were released by the renamed Woodbois in May 2019, we saw a loss of $5.6m. That was in what the board described as a “transformative year”.

Now the share price is back down in the dumps, where might it go next and what might drive it? In the short term, I think a lot will depend on what the company says next.

Cash burn

Woodbois reported positive operating profit in the first half. But that didn’t bring it close to positive cash flow. In fact, the period saw a cash outflow of $2.8m from operations and investments in assets. And there was just $2.1m cash left on the books.

If the next update shows any significant moves towards sustainable and growing profit, or gives us any hint of when we might see net cash inflow, I think the Woodbois share price could start climbing again.

But if it looks like the company will be seeking extra financing before that happens, I suspect investors could turn away. And the shares could dip again.

Verdict

So would I invest in Woodbois shares today? I do see promise in the company’s business proposition. I like the idea of sustainable hardwood production. And I can see growing worldwide demand for it in the coming decades, as we move away from plastics.

I can also picture a profitable future for the firm’s nascent carbon credits business. That would be, essentially, money simply for owning forestry rights. But it’s some years away yet.

The trouble is, I’m not sure how many years of transformations I’d be prepared to sit through while waiting for a growth stock like this to start generating sustainable profits. So I’ll sit it out, and wait until I see the colour of the cash.

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Alan Oscroft 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.

There are some very tempting dividend yields on offer from FTSE 100 companies right now. But when I’m looking to generate a passive income stream, I’m cautious about jumping for the biggest ones.

Yes, a big yield could potentially build me a bigger pot sooner. But it has to be a stock that I think has a solid long-term dividend outlook, not just a one-off bumper payment.

I think Barratt Developments (LSE: BDEV) fits the bill. The housebuilder’s share price is down more than 40% over the past 12 months, but it’s starting to tick up again.

The share price fall has had one potentially beneficial effect for investors seeking passive income. It’s boosted Barratt’s forecast dividend yield, which now stands at 10%. We’re looking at a forecast price-to-earnings (P/E) ratio of only eight too.

Sector pressure

The whole housebuilding sector is under pressure as fears grow of house price falls. Lloyds Banking Group, for example, has predicted an 8% decline in 2023.

There’s something I think I can be reasonably confident about. Over the next 10 years, the Barratt Developments share price is very unlikely to remain static. And the dividend yield isn’t going to stay unchanged either.

So the calculations I’m doing here are not supposed to be a prediction. I’m just trying to show how buying dividend shares when they’re down can help with a quest for passive income.

Illustration

Over the longer term, I expect Barratt shares to regain their lost ground. If that happens, and the cash dividend remains the same, future investors would get a lower yield. So the amount needed to secure £100 per month in income will vary.

But for the purposes of illustration, I’m using the share price at the time of writing, which stands at 375p. And that just happens to make the numbers come out nice and round. With a 10% dividend yield, I’d need to invest £12,000 today to generate £100 per month in income. And that amounts to exactly 3,200 shares.

So an investor with £12,000 to spare could just buy those shares right now, and start pocketing their regular income. But what about those of us who can’t spare that much?

Regular investing

If I start investing £100 per month today, I could achieve my target investment amount in only about seven years. That’s assuming I reinvest all my dividends in more Barratt Developments shares. And, as I say, it’s based on today’s share price and dividend yield.

How far might this be from reality? We’re likely to have a rough year for property, and housebuilders will probably be squeezed a little. And I wouldn’t invest without considering all the risks, which I can’t really go into here.

But every time the housebuilding sector has suffered a cyclical downturn in the past, it’s come back strongly and gone on to renewed growth.

Long term

I see little chance of the UK’s chronic housing shortage ending any time soon. And though these specific figures are just an example of the possibilities, I do see the sector as a good one for generating long-term passive income.

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Alan Oscroft has positions in Lloyds Banking Group. The Motley Fool UK has recommended Lloyds Banking Group. 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 SSE (LSE: SSE) share price has had a tough ride since the summer. Against a background of soaring energy prices, it fell heavily. But since mid-October, it’s been picking up a bit.

Profits will be balanced between higher prices and reduced volumes, as customers cut back. But energy is an essential. And there’s a limit to how much industry can cut back its use. So why the big share price fall, when profits should surely be climbing?

Windfall

Investors have been fearing the possibility of a windfall tax on energy company profits. But so far, that’s not happened. And it’s looking increasingly like it won’t. It’s surely no coincidence that the latest share price gain has come after the change of prime minister has settled economic worries a little.

First-half results are due on 16 November. And in a September update, the company told us it continues to expect “full-year adjusted earnings per share of at least 120 pence, against the backdrop of uncertainty associated with a highly changeable operating environment“.

On the current SEE share price, that suggests a price-to-earnings (P/E) multiple of around 12.8. Or more if earnings beat that “at least” estimate. We’re also looking at a forecast dividend yield of 5.6% now.

Good value?

In more normal circumstances, I’d rate that as an attractive valuation. There are plenty of FTSE 100 shares out there on much better apparent valuations. But many of them do not share SSE’s safety aspect.

Judging by SSE’s current share buyback programme, there doesn’t seem to be any shortage of cash at the moment. It is a relatively modest buyback, of £125m, and aimed at countering the dilutive effect of its scrip dividend. But I doubt a company would do it if it thought it might face a cash squeeze.

Debt

I am a little concerned about SSE’s debt, though. The board expects it to be around £10bn for 30 September. But it says a high proportion is at fixed rates, which offers a bit of protection against rising interest rates. Overall, I’m not unduly worried with a company that has reasonable long-term revenue vision. But I do generally prefer lower debt, especially during tough times.

And the spectre of that windfall tax has not gone away. It has to be a risk that will hang over the stock for as long as our high inflation environment continues.

Dividends

The real attraction for me is SSE’s long-term dividend prospects. The annual payment was scaled back a little in 2020, after the pandemic hit. But over the long term, it’s been nicely progressive. And I see the 2022 share price dip as an opportunity to lock in some better long-term passive income.

So would I buy? If I had enough cash to invest in all the FTSE 100 shares that I find attractive right now, yes, for sure. The trouble is, with unlimited investment cash I would probably end up holding more than half the index. As it is, I think I see even better buys out there.

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Alan Oscroft 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 don’t have to work out how much £1,000 invested in Boohoo (LSE: BOO) shares two years ago would be worth today. That’s because I did invest £1k two years ago. In November 2020, to be precise. And the value has dwindled to just £143 today. Ouch!

To make things worse, I doubled up in February. I got three times as many shares that time for the same money. But that second £1,000 investment is now worth only £441. Together, I’ve managed to turn £2,000 into £584.

I think I can be forgiven for not allowing for the Russian invasion of Ukraine, which happened three weeks after my second purchase. That played its part in sending inflation soaring and reducing the spare cash people have to buy new glad rags. But in 2020, I definitely made a mistake.

Growth shares

I’d previously watched ASOS shares climb and then fall, back when online retailing was still a novelty. ASOS was a bit of a pioneer in the online fashion business, and it had been making good strides to capture a decent market share.

But it was on an eye-watering growth share valuation at times. And to me it was just a clothing seller, and didn’t deserve that high a premium. After all, established retailers could easily get into the same market — which is something Next, for example, has done well.

I thought the same about Boohoo when its shares started to soar. It reached price-to-earnings (P/E) multiples of 50, 60 and more. But no, I reckoned it didn’t deserve such a high rating and should have been priced closer to general clothing retailers.

I forgot!

My mistake came after Boohoo stock started falling. Suddenly, it was a lot cheaper than it had been, and the P/E fell some way from its peak. To me, it was then cheap for an online growth share… It was a growth share now, and I’d forgotten it was just a clothes store.

Examining my mistake is only useful if it makes me a better investor. So how do I see Boohoo now?

We’re in the early days of disposable income being squeezed, and discretionary spend is being cut back. That’s bad news for the fashion business. But tough times can bring us the best investments, providing we’re careful with valuation.

Hard to value

The trouble is, in September, the company said it’s now expecting adjusted EBITDA margins as low as 3-5%, down from its previously weak forecasts for 4-7%. Analysts are predicting a bottom-line earnings loss. And that means valuation measures like the P/E are meaningless right now.

I still can’t help thinking we could be at a time of maximum pessimism for Boohoo. And the share price might just have started to tick up a bit. But I think I’ll wait until we know a bit more about the second half of the year.

And maybe I’ll come back in November 2024 and tell you how much £584 in Boohoo shares today will be worth then.

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Alan Oscroft has positions in boohoo group. The Motley Fool UK has recommended ASOS and boohoo group. 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.

With all the negativity and belt-tightening going on these days, we might expect pressure on the FTSE’s dividend shares. But there are some great yields and big share buybacks from UK’s biggest companies out there.

In fact, 2022 looks like it could challenge 2018 for the FTSE 100‘s best dividend year ever. Forecasts suggest a massive £81.5bn in ordinary dividends this year.

Averaging several sources, here’s what appear to be the 10 biggest forecast dividend yields in the FTSE 100 this year. Forecasts vary, so you’ll find slightly different lists elsewhere.

Tough 12 months

Most of these stocks have had a tough 12 months, with some pretty hefty share price falls. Whether that makes them good long-term dividend buys depends on the reasons behind the falls.

If it’s just negative market sentiment, buying after a fall can be very profitable. I think that’s especially true for dividend shares. As well as any possible share price recovery, we get to lock in that high dividend yield for as long as we hold the investment.

A couple of these have enjoyed gains over the past 12 months. Imperial Brands is the stand-out, up 33%. But I see that as a long overdue price correction, still leaving its price-to-earnings (P/E) multiple at just 9.5. Investors have shunned the tobacco industry for years, despite its strong cash-generative profits.

Sector domination

Another note is the way market sectors can dominate. There’s only one miner in the list now, Rio Tinto. But if I’d done this just three months ago, we’d have seen two or three more up there. Commodities demand has been falling, partly as a result of general global conditions, but also from the economic damage caused by China’s zero-Covid policy.

It doesn’t mean I wouldn’t buy a mining stock for long-term dividend income. But I’d be keenly aware that the sector can be very cyclical.

Housebuilders are up there, and it’s all about an expected weakening of the property market. Lloyds Banking Group has just predicted that house prices will fall 8% next year. But even with that, I think housebuilder shares are oversold. They can still make profits and generate cash even when prices are falling.

Careful with cover

I also see there’s a wide range of cover by earnings. That can be an indication of the likely progressive strength of a dividend in the coming years.

I haven’t looked at the individual risks with most of these stocks, and I’d definitely do that before I invested in any. But I think there’s attractive potential to put together a small portfolio of maybe four or five long-term dividend shares from this list.

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Alan Oscroft has positions in Lloyds Banking Group and Persimmon. The Motley Fool UK has recommended Imperial Brands, Lloyds Banking Group, and 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.

I mostly invest in dividend shares, but every now and then I like to take a punt on a growth stock. It’s one way to liven up an old investor’s life, I guess.

Today I’m examining Indivior (LSE: INDV), whose share price has just picked up a couple of percent on the back of Q3 results. Indivior shares are up around 40% over the past 12 months.

It’s down to a continuing strong recovery that’s been going on since early 2020. Indivior shares had previously been hammered since their peak in 2018. And they’re still down 30% since June that year. Since 2015, the ups and downs of the share price make for a scary white-knuckle ride.

Drug development

Before I look at the latest update, what does the company do? It’s a drug manufacturer, which specialises in prescription drugs for the treatment of opioid dependence. That might not mean a lot to UK investors, but opioid addiction has become a massive problem in the US in recent years due to over-prescription of painkillers.

Indivior’s profits have been erratic. And it even swung to a reported loss in 2020. But analysts expect to see earnings growth over the next couple of years. We’re looking at a forecast price-to-earnings (P/E) multiple of around 19 for the current year.

Attractive growth value

That’s above the FTSE average. But for a growth share, if its prospects come good, it could prove to be a low valuation. And forecasts suggest growth will drop the P/E to around 12 in 2023.

Reported figures for the third quarter are mixed. But on an adjusted basis, earnings per share (EPS) grew by 61% compared to the same quarter of 2021. And nine-month EPS shows a 19% increase.

So, the earnings trend appears to be improving nicely. And Indivior has raised its full-year guidance. The company will present its “roadmap for delivering long-term shareholder value” at its planned Capital Markets Day on 7 December.

Downside

This all sounds good, but I think I need to be cautious. We’ve seen a couple of false starts in recent years. Booms and busts do often come with the territory for growth investors, particularly those investing in any kind of technology stocks in their early phases. But I’m also concerned Indivior might turn out to be a bit of a one-hit wonder.

It’s all about this opioid dependence thing. Yes, it’s a big problem. But for how long? There’s a concerning thing about a treatment for something like this. If it’s successful, won’t it eliminate the reason for its own existence?

I just have no idea what the long-term demand for these medications will be like. But it may be lower if the US gets over its opioid crisis.

Verdict

That’s where Indivior’s long-term roadmap comes into it. And I wouldn’t invest until I see what that has to say. If it looks promising though, Indivior might well become my next growth stock buy, especially if the valuation remains attractive for another couple of months.

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Alan Oscroft 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.

Unilever (LSE: ULVR) is one of those stocks that I’ve always liked, but have never bought. That’s because it’s never offered the biggest dividend yield, and the Unilever share price has never looked like a screaming bargain.

But it’s kept plodding on, decade after decade, generating cash and rewarding its shareholders. It’s possibly the best FTSE 100 share I’ve never bought.

The share price has been flat over the past 12 months, and it’s down 8% in five years.

Progressive dividend

But despite a minor dip in 2019 due to Covid, the Unilever dividend has kept on creeping upwards. Right now, we’re looking at a forecast 2022 yield of 3.7%. That’s not massive. But it’s high by Unilever standards. And I’d much rather bag a long-term progressive dividend than a one-off sky-high one.

I’m not the only one who thinks the Unilever share price suggests a buy right now. It appears the company itself does too, considering it’s engaged in a big share buyback.

Turnover

Unilever’s third-quarter update reinforces what I see as long-term dependability. The company reported underlying sales growth of 10.6% in the period.

In total, turnover grew by 17.8% compared to the same quarter of 2021. And over the nine months, we see a 16.1% increase. We need to see that in terms of inflation, mind. It seems price growth rose to 12.5% in the quarter, while volumes dropped 1.6%.

I’d also like to see comparisons to 2019, the year before Covid-19 sent so much of our retail shopping into disarray. I’ll dig out the figures to compare — but I think it’s worth waiting for final results, to see the full impact of 2022 inflation.

Uncertainty

I do see Unilever as a long-term buy, but I think this all illustrates the short-term downside risk that investors face. We’re really only just into a hard inflationary year. And the impact that will have on consumer spending is still very uncertain.

As a dividend investor, I’ll be looking mostly at full-year cash flow. But right now, Unilever’s liquidity situation looks pretty good. The company announced a new €750m share buyback tranche in September, which should complete by December. In total, the board plans to return up to €3bn in buybacks by the end of the year.

The third quarter dividend is maintained too, at 42.68 euro cents per share (37p at current exchange rates). That’s bang on the dividend paid for the same period last year.

Verdict

To sum up, I think in times of tough economic conditions, it makes sense to invest in market and brand leaders. With so many of its consumer products, that’s exactly what Unilever is. They usually tend to hold up better against inflation and recession. But even the best should expect pain next year, I think.

So yes, I do think Unilever is a good defensive stock to buy for 2023 and beyond. Will I finally buy now? Probably not. That’s just because, once again during hard times, I see other FTSE 100 shares that I rate as more undervalued.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. 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.

We’ve just had third-quarter updates from three FTSE 100 shares that I’ve been watching for some time. Two of them have fallen over the past 12 months, but all three look like they might be long-term buys to me.

Media

First up is WPP (LSE: WPP), whose share price has lost 20% over 12 months.

The advertising and PR group spoke of a strong Q3 performance, posting a 10.3% rise in revenue. On a like-for-like basis, revenue gained a more modest 2.7%. The company attracted $1.7bn in new business in the quarter, and $5.1bn year-to-date.

WPP has been active on the acquisition front too, most recently buying Passport, a brand design agency in California. On top of WPP’s planned £800m share buyback in 2022, it seems there’s no shortage of cash available.

Forecasts suggest a dividend yield of around 4.5% this year. Looking at a forward price-to-earnings (P/E) ratio of under 10, I find that attractive. We do face big economic risks, though. So I might wait and see how the final quarter goes.

Silver

Fresnillo (LSE: FRES) is the world’s largest silver miner. And its shares have also fallen 20% over 12 months.

Q3 silver production dropped by 5.4%, but that was expected. And over nine months, volumes increased by 2.6%.

Fresnillo also unearths gold, lead, and zinc. Production volumes of those are all down year-to-date, which might be contributing to the share price weakness.

But the company reckons it’s still on track to meet full-year guidance for its two key precious metals. It expects silver production of 50.5 to 56.5 moz of silver, and 600 to 605 koz of gold.

My biggest concern with Fresnillo as an investment right now is the stock valuation. We’re looking at a fairly lofty P/E of around 28. But forecasts have it falling to 18 in a couple of years. And I think that would be cheap compared to Fresnillo’s long-term prospects. I think I’ll wait, and hope for further future dips.

Household goods

Household goods producer Reckitt (LSE: RKT) has seen its shares gain 9% over the past 12 months.

Q3 revenue is up 14%. And reported year-to-date revenue rose 7.6%. Like-for-like (LFL) revenue is a bit better, up 8.2%.

The company has set a full-year LFL revenue target of between 6% and 8%, narrowing its earlier estimated range. Reckitt is also targeting adjusted operating margins in the mid-20s in the medium term, and says it’s on track to achieve it. For a highly competitive retail segment, I think that would be impressive.

There’s a forecast P/E of around 16-17, dropping to 15 by 2024. That’s on the upper side of the FTSE 100’s long-term average valuation. But Reckitt has a highly defensive position, and I think it’s worth it for the safety margin.

In other circumstances, I could buy Reckitt at this valuation. I just see better bargains around right now, albeit with a bit more risk.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and Reckitt 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 investors.

Next (LSE: NXT) has been one of the more volatile stocks of the past five years. And in the past 12 months, its share price has fallen 37%.

But since a 52-week low of 4,306p in mid-October, Next shares have regained 15%.

I don’t know if it’s anything to do with Mike Ashley, but the Frasers Group founder has just upped his stakes in ASOS and Hugo Boss. Does his renewed interest in the fashion sector mean optimism is returning to Next too?

Forecasts put Next on a forecast dividend yield of 4%, with a price-to-earnings (P/E) ratio of just nine. In normal times, I think that would make it a no-brainer buy. But 10% inflation and rising interest rates are leaving people with a fair bit less spare cash to spend on new clothes, so a lower valuation does make sense.

Oversold

But I rate Next as possibly the best managed in the business. Considering that, and with a long-term view, it looks oversold to me. And it’s on my list of buy candidates.

Examining Next’s current performance, we face one problem. The most recent results only cover the six months to July. And the real inflation pain only kicked in after that.

Still, the half did look positive. Full-price brand sales rose by 12.4% compared to 2021 (and by 22.3% compared to the pre-pandemic year of 2019). Profit before tax was up too, by 16% over the first half of 2021 (and by 22% over 2019).

Second half

The update gave us a glimpse of how the second half is going. Next rated August sales as below expectations, but said that September sales improved a little.

The company has reduced its full-year profit guidance to £840m, from £860m. But that would still represent a 2.1% rise. Similarly, the board expects earnings per share to come in 2.7% ahead, at 545p.

We’ll hear more on 2 November, with Next’s third-quarter trading statement. The quarter will cover August, September and October. That’s a period in which inflation jumped to 10%, and the UK had three prime ministers and three chancellors. With all that going on, anything could happen to even the best retailer.

Buy the best

Speaking of the best, I think that’s what times like these bring out. When a sector hits the dumps, all companies in it can take a kicking — the best and the worst alike. And I reckon that makes it a great time for investors to load up on shares of the best.

The best in a sector will often come out of a downturn a lot more strongly than weaker competitors. And going forward after a shakeout, they can end up looking even better than before.

I think the risks are clear. Any sign of the business coming in below expectations in November’s update, and I can see the Next share price dipping again. And it looks like we might be in for a lengthy period of austerity. But if Q3 looks in any way positive, I think we might just be at a turning point.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended ASOS. 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 expected to start today saying the FTSE 100 is back above 7,000 points and heading upwards. But then what happens? Yes, it promptly drops back below 7,000, standing at 6,966 points as I write.

But I’ve started, so I’ll finish. And I’m convinced the Footsie will get back above 8,000 points. The only question is when.

If it reaches that level, what might FTSE 100 shares look like? Let’s assume all FTSE 100 shares rise by exactly the same proportion, just as an illustration.

FTSE 8,000

If the index jumped to 8,000 right now, based on current forecasts, here’s what the valuation of 10 popular FTSE 100 shares might look like.

Even after adjusting for a FTSE 100 rise to 8,000 points, these new valuations still look attractive to me.

Rolls-Royce stands out as an outlier. Rolls is only just returning to profit, and in a transition year the price-to-earnings (P/E) ratio can look very high. So that multiple of over 80 doesn’t mean much. Forecasts suggest it should drop to 18 in 2023, and under 11 by 2024.

BAE might also be at something of a turning point, and analysts have its P/E coming down to around 13 by 2024.

10 FTSE 100 buys?

I’d rate all the others as buys even at their boosted share prices. Lloyds Banking Group’s P/E of 7.2 would still only be around half the FTSE 100’s long-term average. And I’d be happy to take that dividend yield of 4.8%.

The Persimmon dividend assumes last year’s special will be paid again. But if that’s cut entirely and we see only a repeat of last year’s ordinary dividend, the yield would still be up at 8.7%. That’s a FTSE 100 housebuilder on a P/E as low as six, when the long-term demand for homes must surely remain high.

Oil not dead yet

Shell stands out too. Oil and gas shares are out of favour in the quest for renewable energy. But I think it’s going to be a long time for Shell to be sidelined, if it ever happens. And I expect a good few years of dividends yet. A P/E of only 5.4 looks cheap.

Putting aside individual stocks, which all carry different short-term risks, I draw one conclusion. Even with the uprated share prices, I think this would still make a good value, balanced FTSE 100 portfolio.

Things could get worse before they get better, though, and these are not in any way predictions. But it does convince me that, on the basis of longer-term share valuations, the FTSE 100 easily deserves to reach above 8,000 points.

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Alan Oscroft has positions in Lloyds Banking Group and Persimmon. The Motley Fool UK has recommended British American Tobacco, GSK plc, Lloyds Banking Group, and Tesco. 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.