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Highlights
- Greggs PLC, an FTSE 250 index constituent, has risen by 45 per cent in the last 5 years.
- An investment of £1,000 into Gregg’s shares would be worth around £3,605 as of December 2021.
- Midcap stocks can offer unique and interesting investment opportunities
Investors often look at FTSE 100 index listed stocks when seeking investment opportunities; however many stocks from mid-cap universe also have profitable investing opportunities.
Various stocks in the midcap FTSE 250 index have risen sharply in the past few years and have given shareholders significant returns for shareholders who remain invested in these stocks over a long-term period.
One such example is Greggs PLC (LON:GRG), a UK based bakery chain, which has risen over 71.01 per cent over the last one-year period, as of 20 December.
Greggs PLC’s Q3 trading update
The group’s 2-year like-for-like company-managed shop sales for Q3 2021 had risen by 3.5 per cent from the comparable period in 2019. The rise came despite staffing and supply-chain related disruption during the period.
Greggs anticipates about 100 net shop openings in 2021. The group also expects its five-year capital expenditure across retail to be about £85 million in 2022 and to further rise to about £92 million by 2026. And, its supply chain capex is expected to be about £69 million in 2022 and ease to about £27 million in 2026.
Capex into IT & other areas is forecasted to be about £15 million in 2022 and is likely to be maintained the same by 2026.
The company added in its Q3 trading update that its strategy will result in its 2026 revenue opportunity to be about £2,400 million.
Greggs PLC’s (LON: GRG) historical share price performance
Gregg’s adjusted closing price was at GBX 838.96 as of 20 December 2016, while it reached GBX 3,024.00 as of 17 December 2021. (An adjusted closing price includes adjusting for multiple factors such as splits, dividends and more.)
This indicates that Gregg’s has given a return of about 260.45 per cent over the last five years to its shareholders. Moreover, on a per-year basis, this would mean Gregg’s return has been about 52.09 per cent per annum between December 2016 and 2021.
To put this into perspective, the FTSE 250 index, which Greggs is a part of, has given a return of about 28.19 per cent in the past 5 years, which equates to 5.6 per cent, on an annualised basis. (As the FTSE 250 index’s closing price stood at 17,769.85 as of 20 December 2016, and its closing price stood at 22,780.38 as of 17 December 2021.)
Therefore, if one had invested about £1,000 into Gregg’s shares in December 2016, it would be worth about £3,604.5 as of 17 December 2021.
The company has a market cap of £3,081.30 million as of 20 December 2021.
Greggs PLC’s dividend yield
The group’s dividend yield stands at 0.5 per cent, and its five-year average dividend yield is at 1.7 per cent as of 25 November 2021.
While certain midcap stocks, such as Greggs, have given shareholders strong returns over the last 5 years. One must consider investment risks and other factors prior to choosing their investments.
