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Lloyds is one of the most popular dividend stocks around. Brand strength, a solid income record, and a leading UK mortgage position keep the Black Horse bank firmly in favour.
Lloyds shareholders have been handsomely rewarded recently, with the stock up nearly 50% year to date. And that’s before dividends!
However, according to the average price target among City brokers (89p), Lloyds might be almost fully valued at just over 80p.
But that’s certainly not the case with YouGov (LSE:YOU), which carries a 557p price target. That’s 56% higher than its current 358p.
So, while analysts could always be wrong, they see far more potential growth in YouGov stock than Lloyds.
Back on the road
Readers will probably know YouGov as the polling company often cited in the media. In June, for instance, it released a model projecting what would happen if a snap general election was held (a hung parliament, with Reform UK as the largest party).
However, the AIM-listed company actually operates across three divisions. Its Data Products segment offers subscription-based tools like BrandIndex, while Research focuses on bespoke client projects, including custom surveys. And finally, YouGov Shopper offers shopping behaviour data and insights from households across 18 European countries.
The stock has been out of favour since a profit warning in June 2024. At the time, CEO Stephan Shakespeare admitted that YouGov had “departed from the road of growth“. That was a poetic turn of phrase for slowing sales (perhaps fitting from someone sharing the Bard’s name).
But this may have just been a pitstop. Because a full-year trading update released yesterday (5 July) showed the firm is back on the growth road. Management expects strong reported revenue and adjusted operating profit for FY25 (which ended 31 July), driven by its acquisition of Consumer Panel Services (rebranded as YouGov Shopper).
Further, the group is on track to deliver annualised cost savings of £20m, with 70% already delivered for this financial year. And more good news came when it said that “the current visibility into FY26 is encouraging“.
Investors cheered this update yesterday, sending the share price up 19%.
Dirt-cheap valuation
Despite this, YouGov stock is still down 14% this year, and 77% off a peak of 1,600p reached back in December 2021.
The forward price-to-earnings (P/E) ratio is just 9.2, while there’s a 2.9% forecast dividend yield on offer. The payout has more than doubled in five years.
Medium term
What could send YouGov skidding back off the road of growth? Potentially strained client budgets amid ongoing economic uncertainty.
Also, weak organic growth is worth highlighting here. Stripping out the acquisition, the firm said that it delivered “modest” underlying revenue growth last year. And its Research division suffered from “weak performance” in its EMEA (Europe, Middle East, and Africa) region and Government sector.
Fair to say, then, the firm is not currently firing on all cylinders. But the medium term still looks bright to me, with artificial intelligence almost certain to improve its data-driven predictive insights and product offerings.
YouGov is a profitable data/tech company with a strong brand. I think a move to the main market (and possibly FTSE 250) at some point would boost its valuation.
Pairing this potential with its cheap valuation, I think the stock is worth considering at 356p.
