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.

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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.

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