5 top British stocks I’d buy today

I’d build my investment portfolio on FTSE 100 shares and these five top British stocks could all deliver long-term income and growth.

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.

A GlaxoSmithKline scientist uses a microscope

Image: GlaxoSmithKline

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.

Investing in top British stocks is my preferred way of building wealth for my future. Personally, I’d start by creating a balanced portfolio of blue-chip companies from the FTSE 100, operating across different sectors with different levels of risk.

I’d give serious consideration to these five from the FTSE 100, starting with China-focused bank HSBC Holdings. This has risks, as the business is caught up in the US-China power struggle, walking a tightrope to avoid being forced to take sides.

On the plus side, HSBC gives investors exposure to one of the fastest growing regions of the world, but with the security of the London listing. It trades at a tempting 11 times earnings, with a forward yield of 3.9%. I’d expect that to rise over time.

I’d buy these top British stocks

Pharmaceutical giant AstraZeneca has been caught up in all sorts of controversies over its coronavirus vaccines. That seems harsh given that it isn’t aiming to profit from them. Investors also fear it’s overpaying in the $39bn purchase of US biotech Alexion Pharmaceuticals.

As if that wasn’t enough, there’s been a shareholder revolt over CEO Pascal Soriot’s pay. Yet I think these temporary troubles give me a good opportunity to pick up a top British stock while it’s out of fashion. I’d then aim to hold for long-term income and growth.

I’d also consider another top British healthcare stock, Hikma Pharmaceutical. Its broad portfolio of essential medicines has given the company a good start to the financial year, despite lower demand for Covid-19 related products. Its share price has been choppy over the last five years, but its branded and generic businesses should deliver sustained growth.

Spirits giant Diageo has been a top British stock for years, and last year’s crash was a great time to buy. The Diageo share price is up more than a third since then, as investors bank on a recovery surge once people hit bars and restaurants again.

I still rate this FTSE 100 favourite

Management now plans to return £4.5bn in capital to shareholders, to celebrate its recovery. The spread of Covid variants are a risk, plus Diageo is expensive, trading at 29 times forward earnings. But then it usually is expensive, and there’s a good reason for that.

Finally, I’d include Britain’s biggest grocer Tesco. It trades at a tempting valuation of 12.3 times forward earnings, while the forward yield is now 4.43%, covered 1.9 times. Tesco is a top British stock but it does face challenges, amid concerns over what whether Amazon will disrupt this sector too.

Tesco had a good pandemic, but when people increasingly return to eating and drinking out, they’ll spend less in supermarkets. Aldi and Lidl remain constant irritants too. Yet management has faced down these threats before, and I’m banking Tesco will continue to deliver income and growth for the long term.

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.

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo, HSBC Holdings, and Tesco. 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

Investing Articles

Up 75% in 5 years, I reckon this FTSE 250 still has lots to give!

Our writer explains why this FTSE 250 stock could still continue to provide growth and returns despite already being on…

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

2 high-quality FTSE 250 stocks to consider buying

The FTSE 250 is home to some of the best investment opportunities out there. This Fool highlights two stocks for…

Read more »

Investing Articles

The Marks and Spencer share price dips! Is this my chance to buy?

Marks and Spencer was one of the hottest stocks on the market last year. With its share price falling in…

Read more »

Growth Shares

How low could the boohoo share price go?

Jon Smith explains why the enterprise value and the low risk of bankruptcy should help to prevent the boohoo share…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Down 23% in a year! Can the Diageo share price regain £30 in 2024?

This Fool UK writer is checking the charts to see if the Diageo share price can recover from the recent…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

I wouldn’t touch this FTSE 100 stalwart with a bargepole

Despite looking like a bargain on paper, this Fool is avoiding FTSE 100 constituent Vodafone at all costs. Here he…

Read more »

Investing Articles

I’m waiting for the Rolls-Royce share price to pull back before I buy

The Rolls-Royce share price has been the Footsie's best performer in the last year. But this Fool has no intention…

Read more »

Front view photo of a woman using digital tablet in London
Dividend Shares

2 dividend stocks to take me from £0 to £9.5k in second income

Jon Smith talks through some ideas with second income potential, including one stock that has a dividend yield above 10%…

Read more »