Winter portfolio stock Keller in record-breaking mood

Record financial results and a significantly increased dividend today ensured the winter portfolio stock Keller Group (LSE:KLR) stood out in a sea of FTSE 250 index red.

The world’s largest geotechnical specialist contractor surged to another all-time high at 2,235p, meaning its valuation has now jumped by two-thirds in the past year and 20% in 2026.

• Learn with ii: Inheriting an ISA | Can I Transfer an ISA to Someone Else? | Open a Stocks & Shares ISA

The performance since 1 November has also made Keller one of the star performers of Wild’s Aggressive Winter Portfolio, having secured its inclusion in this year’s five-strong basket following an average seasonal return of 17.2% over the past decade.

Keller’s latest advance came as the FTSE 250 index lost 3%, or 700 points in the global market sell-off, although the mid-cap benchmark is still higher than where it started the year.

City firm Berenberg today backed further upside for Keller shares after lifting its price target to 2,350p, while Peel Hunt retained its Buy recommendation and moved to 2,430p.

The latter said the ground engineer’s shares continued to offer good value, supported by a solid balance sheet that today underpinned a 41.6% rise in total dividend to 70.4p a share.

New chief executive James Wroath said the enhanced dividend policy reflected his confidence that actions in recent years have left Keller’s financial performance on a sustainable footing.

• Biggest FTSE 100 fallers this week
• Stockwatch: should investors back these four oil stocks?

Since 2022, Keller has doubled its underlying operating profit and delivered a 340-basis points improvement in underlying operating margin.

In 2025, this margin was maintained at 7.1% despite the non-repeat of exceptional market conditions in North America in the prior year.

Group revenue increased by 5.9% to £3.1 billion, driven by robust demand across key segments as a 3.1% rise in underlying profit came in ahead of City expectations at a record £197.3 million.

Wroath added that the group began the new financial year with a high-quality order book, healthy tendering activity and a clear strategic direction.

Peel Hunt pointed out that his pledge to focus on key markets where Keller can achieve high relative market share left the group well placed to achieve the best risk-adjusted returns.

• eyeQ: high-risk stock gives standout signal
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

The bank raised its 2026-27 dividend forecasts by 35% following the launch of a new capital allocation policy, which aims to build on Keller’s track record of maintaining or growing its payout every year since it first listed on the stock market more than 30 years ago.

Reflecting the maturity of the business and the improved predictability of its free cash flow, the group said a “sustainable and progressively growing dividend” was focused on a target cover range of 2.5-3.5 times earnings.

This leads to a “step change” in the 2025 final dividend to 52.1p, which will be paid on 26 June.