4 top UK stocks I’d buy today

Christopher Ruane identifies four top UK stocks he would consider buying today for his portfolio to aim for both growth and income.

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Overseas investors have been circling around top UK stocks like Morrisons. Here are four more UK shares I would consider buying for my portfolio today.

Two top UK stocks I’d buy for income

My first choice would be British American Tobacco (BAT), although I like both it and Imperial Brands. With a yield of 7.6%, BAT looks very attractive to me. Although Imperial yields slightly more,  it cut its dividend last year. BAT has raised its dividend every year for over two decades. There is never a guarantee that a dividend will be paid, but BAT’s strong commitment to dividends attracts me as an income investor.

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With its strong cash flows and growing portfolio of non-cigarette brands, I like BAT. But I do think there is a risk of declining smoking rates hitting future revenues and profits.

My second income pick among top UK stocks would be Legal & General. The financial services group with its iconic multi-coloured umbrella logo yields 6.5%. It has laid out plans to raise its dividend in the years to come, although as with BAT any unforeseen shifts in the market remain a risk to the dividend. I like the fact that Legal & General has strong customer awareness in its market. That should help it continue to grow revenues. One risk is increased competition in the financial services market, which could lead to lower profit margins.

I’d buy these UK growth stocks

I’ve also got some growth choices on my list of top UK stocks to buy for my portfolio today.

One is digital advertising agency S4 Capital (LSE: SFOR). The S4 Capital share price has tested new highs today. The market is hoping the acquisitive company announces a new deal this month, something its chairman seemed to suggest was on the cards. But even without the impact of any acquisitions, there is a strong growth story here. Using a playbook he perfected at WPP, Sir Martin Sorrell has led the company to raise organic growth forecasts to 30% this year for both revenue and profits. S4 has a digital focus and global team of experienced talent. I think it could be in the sweet spot of profit growth as a buoyant advertising market shifts more of its spending online.

The importance of Sorrell to the growth story does present a risk, for example, if he steps down it could hurt the company’s growth plans. I’m hoping he’s able to keep his magic touch at the wheel for many years to come.

Buffett playbook

Another of the top UK stocks for growth right now I would consider is Judges Scientific (LSE: JDG). I like the way the company has taken a leaf out of Warren Buffett’s book when it comes to investing. It acquires specialised instrument manufacturers using a disciplined valuation model. Judges then allocates capital as needed and helps them benefit from being part of a larger group without interfering too much operationally. The end customer market has highly specified product requirements, which gives Judges pricing power.

With the Judges share price up 300% in the past five years, the company has a proven track record. But a risk is increased global competition. If product quality from lower cost markets improves, that could make it harder for Judges to sustain its profit margins.

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Christopher Ruane owns shares in British American Tobacco, Imperial Brands and S4 Capital. The Motley Fool UK has recommended British American Tobacco, Imperial Brands, Judges Scientific, and Morrisons. 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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