Top British shares for September 2020

We asked our freelance writers to share their top British shares for September, including CRH, BAE Systems and Coca-Cola HBC.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

We asked our freelance writers to share the top British shares they’d buy in the month of September. Here’s what they chose:


Jonathan Smith: Coca-Cola HBC

With the UK officially in a recession, I’d turn to a defensive stock to protect my portfolio. Therefore I’m keen on Coca-Cola HBC (LSE: CCH). With the core product being a staple of consumers, demand should be inelastic even if people reduce spending. Half-year results for 2020 showed revenue down by 15.5%, but this was largely down to out-of-home spending. This was down by 70%, mostly due to the lockdown.

Should we see the UK recession continue without another hard lockdown, Coca-Cola HBC ought to perform well. Buying now with a discount of around 25% compared to the start of the year could be a smart move.

Jonathan Smith does not hold any position in Coca-Cola HBC.


Rupert Hargreaves: CRH

I think building materials business CRH (LSE: CRH) is one of the best ways to play the global economic recovery. The company is one of the largest suppliers of building materials, such as concrete and asphalt in Europe.

Following the pandemic, governments are planning to stimulate their economies with infrastructure spending, which should result in increased demand for these products. I think this could provide a big boost for CRH’s bottom line.

In the past, the company has complemented organic growth with bolt-on acquisitions. Increased profits may free up more cash to pursue this strategy, which could help improve CRH’s long-term growth.

Rupert Hargreaves does not own shares in CRH.


G A Chester: Diageo 

I think Diageo (LSE: DGE) is a top British blue-chip share to buy in September and hold for the long term. Its outstanding portfolio of over 200 drinks brands — Johnnie Walker whisky, Gordon’s gin and Guinness stout, to name but three — is unrivalled. Such brands, backed by decades of investment, continue to be enjoyed by generation after generation. 

Diageo’s shares are trading towards 30% below their all-time high, made this time last year — the company hasn’t been immune to the Covid-19 pandemic. But I think this is an opportunity for canny long-term investors to buy into a highly valuable global business at a great discount price. 

G A Chester has no position in Diageo.


Anna Sokolidou: Rio Tinto

The shares of Rio Tinto (LSE:RIO), a mining giant, have rallied since March. That’s due to the rising demand for iron ore in China. In spite of the pandemic, the Chinese government has invested heavily in the country’s infrastructure.

What’s more, the supply is limited in Brazil where a lion’s share of the metal comes from. The country is truly struggling to contain Covid-19, and doesn’t have the opportunity to mine as much iron as it used to.

I consider Rio Tinto (just like many other companies) to be a bit overvalued right now. But I’d buy the stock at every pullback.

Anna Sokolidou does not own shares in Rio Tinto.


David Barnes: BAE Systems

With its c.4.5% dividend now reinstated, I think FTSE 100 defence giant BAE Systems (LSE: BA) looks good value right now.

The dividend is well covered, and its revenues are reliable given it works largely on government backed, long-term contracts. The firm is a trusted partner of many western governments. I also see future growth through moving into cybersecurity.

The share price is still over 20% off its year high following the stock market crash in March, and with a price-to-earnings ratio of just 12, I think the shares are a steal.

David Barnes owns shares in BAE Systems.


Edward Sheldon: Boohoo

My top British share for September is online fashion retailer Boohoo (LSE: BOO).

Boohoo’s share price has taken a hit recently on the back of reports about poor working conditions at clothing factories linked to the company. I expect the shares to recover, however.

Boohoo’s brands, which include Boohoo, PrettyLittleThing, and Nasty Gal, remain very popular with younger fashion-conscious shoppers. Meanwhile, demand for comfy clothing is soaring due to the work-from-home trend. So, I expect Boohoo’s sales to continue rising at a healthy rate.

All things considered, I see Boohoo shares as a ‘buy’ right now.  

Edward Sheldon owns shares in Boohoo.


Kirsteen Mackay: Provident Financial  

Provident Financial (LSE:PFG) has said its business is picking up again after sinking to a £37.6m loss in the first six months of the year. It now plans to repay furlough money received from the government as its Vanquis Bank and Moneybarn subsidiaries remain profitable. It has streamlined its business through job cuts and should be stronger going forward.

As furlough payments come to an end, finances will be tight – and with Christmas on shoppers’ minds, I think Provident will continue to see a rise in doorstep lending. It has a price-to-earnings ratio of 7, though its dividend remains on hold. 

Kirsteen does not own shares in Provident Financial.


Matthew Dumigan: Hargreaves Lansdown

As the UK’s largest investment broker, Hargreaves Lansdown (LSE: HL) has made a tidy profit from the heightened stock market volatility over recent months. The firm recorded a record a whopping £7.7bn in new business in the 12 months ending June 2020 and posted an impressive set of full-year results on top of this. 

Given the company already boasted a solid set of finances prior to this year, the future now looks even brighter. What’s more, the recent announcement that Robinhood won’t be launching in the UK is a further boost for the industry’s market-leader. 

Matthew Dumigan does not own shares in Hargreaves Lansdown.


Paul Summers: Diageo

At the risk of sounding like a stuck record, I think top British share Diageo (LSE: DGE) has fallen too far ahead of September.

News of weaker-than-usual sales of its premium brands in the wake of the coronavirus will matter to traders. As investors, however, we can take advantage of others’ impatience and snap up great stocks in defensive sectors when they’re on sale. With a share price still 25% below where it stood one year ago, the £60bn cap strikes me as a good example. 

Like major shareholder Nick Train, I struggle to believe people won’t pile back into pubs and clubs when the pandemic finally subsides. In the meantime, there’s always the dividends to enjoy. 

Paul Summers has no position in Diageo.


Peter Stephens: Aviva

Aviva’s (LSE: AV) share price has fallen by around a third since the start of the year. However, its recent results showed that it delivered a resilient financial performance in uncertain operating conditions.

The company is in the process of implementing a new overall strategy. It will now focus its capital on the most attractive markets in which it operates. This may lead to a narrower focus, but could have a positive impact on its profitability.

Aviva appears to have the financial means to invest heavily in areas with growth potential. This could lead to an improving share price performance over the long run.

Peter Stephens owns shares in Aviva.


Rachael FitzGerald-Finch: British American Tobacco

British American Tobacco’s (LSE: BATS) recent decision to maintain its 65% dividend pay-out ratio makes it an attractive prospect for income investors. Indeed, with the current share price at pre-lockdown levels, the dividend yield sits at a healthy 8%.

The tobacco producer’s defensive characteristics appear to have resisted the potential for customers to change to cheaper products throughout the economic downturn. Moreover, operating profits climbed over 16%, when compared with 2019, despite flatter revenues. 

With management predicting EPS growth to be in the high-single digit percentage post Covid-19, the potential returns make the tobacco firm an appealing investment for September.  

Rachael does not own shares in British American Tobacco.


Roland Head: Kingfisher

FTSE 100 stocks rarely deliver a 180% gain in five months, but that’s what DIY retailer Kingfisher (LSE: KGF) has done since March. The stock has risen from a low of 101p to trade at around 280p.

Kingfisher owns B&Q and Screwfix, plus DIY chains in France and Eastern Europe. It was an unexpected beneficiary of lockdown, thanks to a surge in DIY demand. Group sales were up by 25% in June, for example.

But what’s really caught my eye is the massive rise in online sales. These have trebled since last year. I think this online success could speed up the group’s turnaround and support further share price gains.

Roland Head does not own shares in Kingfisher.


Royston Wild: ContourGlobal

Weak investor confidence means that demand for classic safe-haven stocks should remain in vogue in September. And I believe buying shares in ContourGlobal (LSE: GLO) is an attractive way to play this trend.

At current prices, the power station erector and operator trades on a forward price-to-earnings (P/E) ratio of around 17 times. That’s not jaw-droppingly attractive, sure. But the FTSE 250 stock’s inflation-mashing 6% dividend yield is, in my book.

ContourGlobal’s share price has soared 20% in the past three months on the back of heightened investor tension. With Covid-19 infection rates rising again in key economies, I’m expecting the power play to keep growing in value throughout September, too, and quite possibly beyond.

Royston Wild does not own shares in ContourGlobal.


Manika Premsingh: Kingfisher

The FTSE 100 home improvement stock Kingfisher (LSE: KGF) is my top British share for September, as it has shown robust performance in the past few months. Not only has its share price consistently risen, its latest trading update shows double-digit sales growth as well. It is likely to have benefited from the country’s lockdown, which gave people a chance to focus on home improvements at a time of relative confinement.

KGF’s results are due in a few days, which will give further insight into the company’s performance. The outlook could also be material in learning whether KGF’s strong sales growth will continue now that we are largely past the lockdown period…

Manika Premsingh has no position in Kingfisher.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

The Motley Fool UK has recommended boohoo group, Diageo, and Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Would a stock market crash matter?

Christopher Ruane explains why a stock market crash could turn out to be positive, not negative, for a private investor…

Read more »

Investing Articles

Has the Rolls-Royce share price peaked?

After a strong 2023 performance and (so far) in 2024, the Rolls-Royce share price has stuttered in recent days. Christopher…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Turning a £20k ISA into a £13,900 yearly second income? It’s possible!

By investing a £20k ISA now using certain basic principles, our writer thinks he could set up a second income…

Read more »

Fans of Warren Buffett taking his photo
Investing Articles

With no savings, I’d follow Warren Buffett’s number one rule to build wealth

Can this one piece of Warren Buffett wisdom really help our writer as he aims to build wealth in the…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

A second income of £1k a month from just £10 a day! How would I do that?

Mark David Hartley considers how to build a second income stream starting from just £10 a day. Is £1,000 a…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Turn £8,900 into a £24k annual passive income? Here’s how!

Christopher Ruane applies some investing lessons from billionaire Warren Buffett when explaining how he'd aim to earn sizeable passive income…

Read more »

Young Caucasian woman holding up four fingers
Investing Articles

7%+ dividend yields! 4 FTSE 100 shares for investors to consider buying in April

These FTSE shares offer dividend yields comfortably above the index average of 3.7%. Here's why they could be good passive…

Read more »

Dividend Shares

£10k in an ISA? Here’s how to generate a ton of passive income

Passive income can provide a lot more financial freedom and security. Here’s an easy way to generate some within an…

Read more »