Card Manufacturing unit (LSE:CARD) is a probably neglected FTSE inventory. It’s the UK’s main specialist retailer of greeting playing cards and celebration necessities — not notably horny stuff.

Curiously, the inventory has carried out fairly nicely for the reason that pandemic. Whereas it’s down round 66% over 10 years, the shares are up 223% over 5 years. It’s a combined image, however the inventory we see as we speak might curiosity some buyers.

Let’s take a more in-depth look.

Optimistic momentum

Card Manufacturing unit’s outcomes for the 12 months ended January 2025 gave additional proof of the corporate’s operational momentum. Revenues rose by 6.2% to £542.5m, pushed by a 5.8% enhance in whole retailer gross sales. Like-for-like (LFL) gross sales grew by 3.4%, outpacing a lot of the broader retail sector.

In the meantime, adjusted revenue earlier than tax climbed 6.3% to £66m, reflecting the advantages of a rising retailer property and ongoing growth into the presents and celebration necessities classes.

Reflecting on the 12 months, the corporate’s administration highlighted the profitable execution of its “Opening Our New Future” technique. This contains focused acquisitions in Eire and the US, in addition to new partnerships to broaden worldwide attain.

CEO Darcy Willson-Rymer famous that momentum has continued into monetary 12 months 2026 and reaffirmed confidence in delivering mid-to-high single-digit revenue progress. This will likely be supported by ongoing productiveness and effectivity initiatives.

Valuation is compelling

In an more and more sizzling market, it’s good to seek out pockets of worth. And Card Manufacturing unit’s valuation definitely seems engaging.

The shares presently commerce on a ahead price-to-earnings (P/E) ratio of simply 6.2 for 2026, falling additional to five.9 for 2027, based mostly on consensus forecasts. That is nicely beneath the long-term common for the sector, suggesting the market has but to totally price within the firm’s restoration and progress prospects.

Dividend prospects are additionally brightening. The ahead dividend yield is forecast to rise from 5.1% this 12 months to almost 6.6% by 2027. The payout ratio stays comfortably beneath 40% all through.

Web debt, excluding leases, rose to £58.9m within the monetary 12 months 2025, however leverage stays manageable at 0.7 occasions earnings earlier than curiosity, tax, depreciation, and amortisation. Money technology stays robust, with working money circulate of £105.6m. This could help dividends and debt repayments.

It’s not all blue skies

Regardless of these positives, buyers needs to be conscious of a number of dangers. Card Manufacturing unit’s enterprise stays closely store-based, with solely modest progress in its on-line platform final 12 months. As client behaviour, generally, continues to shift in the direction of digital channels, the corporate might face challenges if it fails to speed up its e-commerce technique.

Moreover, rising nationwide insurance coverage and minimal wage prices might additional stress margins, as wage bills already signify a good portion of general prices.

Nevertheless, it’s a inventory I’m going to contemplate investing in. I definitely haven’t made my thoughts up but, however its low valuation, stable revenue progress, and bettering dividend yield make it an intriguing prospect for worth and revenue investing. With manageable debt and a transparent progress technique, the shares might ship pleased returns.