If I had a lump sum of £10,000 to invest, I would buy UK equities. And with that in mind, here are the companies that I believe in today.
The best shares to buy now
The outlook for the global economy is highly uncertain. This makes it difficult for investors to plan for the future. As such, I am seeking out defensive stocks and shares, which should be able to continue to provide a steady return for their investors no matter what the future holds for the UK and global economies.
One such example is the health and safety group Halma. This company provides health and safety equipment for businesses and individuals. Over the past decade, management has complemented organic growth with bolt-on acquisitions, a strategy that has proved remarkably successful. Health and safety is one of those industries that doesn’t get trapped by normal economic cycles, so I think it’s likely that Halma could be one of the best shares to buy now in the current uncertain environment.
On the same note, I think the distribution group Bunzl has similar qualities. We only need to look at the company’s performance this year to get an idea of how the organisation will perform going forward.
Despite the pandemic, Bunzl’s profits and sales have remained steady. This has allowed the group to repay some government support and avoid the worst of the economic downturn. What’s more, like Halma, Bunzl has a good track record when it comes to acquisitions, which has helped accelerate the firm’s growth in the past. I’m optimistic this can continue.
Healthcare is one of the most defensive sectors on the stock market. AstraZeneca is one of the UK’s largest healthcare companies. That’s why I think this could also be one of the best shares to buy now. Over the past few years, Astra has spent billions of pounds developing new oncology treatments.
These efforts are just starting to pay off. Analysts believe several of these new cancer treatments could become so-called ‘blockbusters’, drugs that generate over a billion dollars a year in sales. In such uncertain times, I could benefit from including such a defensive investment in my portfolio.
Margin of safety
Finally, I think another of the best shares to buy now is Lloyds Bank. This isn’t the most defensive business on the market. The group’s performance is tied to that of the UK economy. However, the stock currently looks exceptionally cheap. There’s a good chance the organisation will resume dividends next year, and when it does, investors could be in line for a high-single-digit dividend yield.
At the same time, shares in the lender are trading at a deep discount to book value. This implies the stock offers a wide margin of safety at current levels. When combined with the bank’s income potential, this implies it could produce high total returns for investors in the near future.
