Tea and biscuits. The Queen. Red buses. And Brexit. When you think of Britain, some things spring to mind right away. But what stands out when considering ways to invest your hard-earned money? We examine the best English stocks to buy right now to help you find the winners.
Barclays CEO Leads Positive Transformation
Barclays plc. [LON: BARC] is a British multinational investment banking and financial services holding company which offers various financial products and services in the United Kingdom, Europe, Asia, Africa, the Americas and the Middle East.
The company operates through Barclays UK and Barclays International. It offers retail banking, credit cards, wealth management, wholesale banking and investment banking services, among others.
Barclays plc. [LON: BARC] has had an interesting turnaround under CEO Jes Staley, a protégé of JPMorgan Chase CEO Jamie Dimon. The bank’s fortunes have been changing as its CEO insists that he can turn around the bloated investment bank by making it more efficient.
Also, with Deutsche Bank dramatically shrinking its investment bank, Barclays is one of the only remaining big European players.
Barclays reported a net loss for the third quarter after being hit by $1.4 billion ($1.8 billion) worth of insurance claims.
However, Barclays saw profits in its corporate and investment bank jump by £609 million. It was £431 million in the same period last year.
Shares soon rose more than 10%, and with its compelling valuation, Barclays might be a good choice for value investors.
The Group continues to target >10% return on average tangible equity (RoTE) for 2020.However, challenges remain in the form of global macroeconomic uncertainty, UK’s departure from the EU and the current low interest rate environment.
Growth Momentum Likely to Continue for Experian
Experian is a global leader in consumer and business credit reporting and marketing services. The company uses data science, analytics and technology to derive meaningful information from data.
The company also manages information of people and businesses pertaining to their credit in the past to help businesses and organizations lend with confidence and prevent fraud.
The price of Experian plc. [LON: EXPN] stock is up an impressive 150% over the last five years, an increase of 33% over the last 12 months and an 18% gain in the last three months.
The £21.6bn group’s data helps global businesses mitigate lending risks and credit fraud. Experian has a strong presence in over 40 countries across the globe and business-to-business customers are its major revenue generators.
With good forecast earnings, global expansion, new customer acquisitions and revenue growth, this is one stock that you should choose if you are looking for good returns.
ITV: Diversified Business & Online Strength
As a staple of British television, ITV plc has long ranked among the best english stocks to buy.
It is a British media company which engages in production and broadcasting services. The London, England.-based company creates and distributes content on various platforms worldwide. It operates through the Broadcast & Online, and ITV Studios segments.
The shares of broadcaster ITV [LSE: ITV] rose 45% during the latter part of 2019. But there is more to that than just the escalating stock valuation.
A major attraction is the dividend on offer. Though the company is not currently being over liberal with its dividend handouts owing to dropping advertising revenue, it is expected to still be around 8p per share, giving a good yield of 5.3%.
In 2018, the business posted an annual revenue of over £3.21bn. However, during the first half of 2019, advertising revenue declined, though less than expected. This though was more than made up by increasing online revenue which jumped 18%.
The broadcaster generates good returns on the investment it makes and is committed to creating a stronger, more diversified business with good quality content. Add to that its new streaming service with the BBC (BritBox) and in all likelihood, ITV is expected to outperform the market in the near future.
Developing Markets Hold the Key for Prudential
Prudential plc. [LON: PRU] is a multinational life insurance and financial services company.
The London, United Kingdom-based Company provides a range of retail financial products and services, including life insurance, annuities, retirement-related services, asset management and investment management services to both individual and institutional customers in Europe, the United States, the United Kingdom, Asia, and Africa.
It owns Jackson National Life Insurance Company in the United States, which is one of the largest life insurance providers in the country.
Shares of insurance giant Prudential [LON: PRU] trade below book value, which makes it a tempting pick for value investors.
Prudential has a massive growth potential, as it looks toward emerging markets with a fast growing middle class.
People in developing economies do not have state benefits to fall back on, and as such require insurance products, which in turn will drive returns for Prudential.
This holds immense growth and profitability prospects for the £36bn group. Asia looks set to grow at a faster pace than the West, a fact demonstrated by the company’s recent agreement to sell life insurance to customers of Vietnam’s Southeast Asia.
Shares of Prudential offer an enticing yield, and it is all set to grow with rising earnings, which is expected to rise 7% this year and by the same percentage the next.
Financial health and growth prospects of PRU show that the company is well placed to outperform its competitors in the market.
Sainsbury to Gain from Strong Online Presence
J Sainsbury plc. [LON: SBRY], trading as Sainsbury’s, is one of the leading food retailers in the UK.
The company, engaged in grocery-related retailing and retail banking, is the second largest chain of supermarkets in the United Kingdom as well as the oldest.
The holding company, J Sainsbury plc, is split into three divisions: Sainsbury’s Supermarkets Ltd (including convenience shops), Sainsbury’s Bank and Sainsbury’s Argos. The Holborn Circus, City of- London-based company presently owns around 800 stores, including supermarkets and convenience stores.
Supermarket chain J Sainsbury [LON: SBRY] had a tough 2019. Its merger attempt with Asda failed to materialize and the shares tanked by almost 40% in the last 12 months.
However, Sainsbury’s remains a lucrative investment prospect for investors for a host of reasons. The retailer’s shares are currently offering a dividend yield of about 5.5%.
This is significantly ahead of returns of 2.6% and 3.3% being offered by rivals Tesco and WM Morrison respectively. Furthermore, the decline in shares witnessed in the past 12 months makes the stock cheap to buy.
The proliferation of smartphones and broadband continues to boost online sales at the cost of more traditional bricks-and-mortar stores.
Meanwhile, Sainsbury’s is trying to adapt and its digital investments seem to be paying off, with the company generating more than 20% of its business online during the just concluded quarter.
All in all, Sainsbury’s shares stand out as a good investment option, provided you are willing to stay invested for a long term.
You Can Always Play Safe by Investing in Unilever
Unilever [LON: ULVR] is a multinational corporation selling consumer goods including foods and beverages, cleaning agents and beauty and personal care products. It is a dual-listed company consisting of Unilever NV in Rotterdam and Unilever PLC in London.
The multinational consumer goods company owns more than 400 brands, including 15 brands which individually generate annual sales in excess of €1 billion. Most well-known brands of the company include Axe, Dove, Lux, Rexona, Lifebuoy, Vaseline, Knorr, Magnum, Lipton, Brooke Bond, Ben & Jerry’s, Surf, Comfort and Sunlight, among others.
The Unilever Group [LON: ULVR] is a top company which provides investors with safe investment options and utmost peace of mind when investing for the long run.
On top of that, it also offers a reasonable and consistent dividend. It has diversified revenue streams that make the company more fortified to weather economic downturns.
Furthermore, the business has ample room to grow, especially in the developing markets.
More importantly, its growth is high quality, with a solid history of investing heavily to promote its brands. The company’s desire to strengthen the company’s overall brands has paid off well with the number of brands, which delivered more than €1 billion in turnover, increasing from 11 to 15.
The consumer goods behemoth has also been extensively focusing on cost-saving initiatives by cutting jobs and making the supply chain more efficient, among other concerted steps to drive profitability.
The beauty of this global consumer goods powerhouse is that it has hundreds of brands that consumers buy regularly throughout the year. It has reliable and foreseeable profits and cash flows along with high operating margins and returns on capital employed (ROCE), all of which contributes to a rising dividend payout.
Dividend Cut and 5G Rollout to Boost Vodafone
Vodafone Group plc [LON: VOD] is a multinational telecommunications company with presence in more than 25 countries. It predominantly operates services in the regions of Europe, Africa, Middle East and Asia Pacific (AMAP).
The company provides a range of services, including voice messaging and data across mobile and fixed networks. It offers mobile money services through M-pesa and advanced digital service through Giga TV. It has its global headquarters in London, England.
Experts believed that Vodafone Group plc [LON: VOD] was suffering owing to its persistent refusal to cut down on its exorbitant dividend. The company finally relented and cut the dividend in May, and this sent the shares soaring around 20%.
The company, though, still has a stretched balance sheet with a large amount of debt. There is still a lot of doubt about the pace of recovery and the cost of rolling out 5G, but Vodafone continues to find favor with those who expect Vodafone shares to go higher still.
Deutsche Bank seems to be the most upbeat about Vodafone’s prospects with a price target of 240p, which represents an upswing of 45% from current levels.
Despite the 40% dividend cut (necessitated by the need to invest in its networks and in 5G spectrum auctions), it is worth noting that the yield of over 5% is still a rewarding offer in the present low interest rate environment.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.