5 top British stocks I’d buy

British stocks sometimes have a reputation for not growing as fast as their US peers, but here are five very strong UK-listed companies.

| More on:

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.

Graph Falling Down in Front Of United Kingdom Flag

Image source: Getty Images

As the markets struggle and investors fret about inflation, Chinese economic growth and the impact of the hasty and disorganised withdrawal from Afghanistan, there are, in my opinion at least, opportunities to pick up top British stocks.

Top FTSE 100 British stocks

From the UK’s elite index – the FTSE 100 – I’d buy Legal & General (LSE: LGEN) and Aviva (LSE: AV). Stable business models and decent value share prices underpin the buy case for both of these shares, for me. Both also seem to be doing a lot right.

In the case of Legal & General, there’s the high dividend yield and the fact the dividend was maintained through the pandemic. Unlike at other financial companies, including rival Aviva.

It also has an incredible passive investing business and has built up a large annuities business as well. To me, it seems very well run and the management team is experienced and very stable. The CEO has been in the role since 2012.

Aviva has until recently been more turbulent. The CEO role has been in several hands in quick succession. But under Amanda Blanc, the business seems to be doing much better. It has become leaner, which should make it more efficient and easier to manage, and the dividend is making a comeback.

I already own shares in Legal & General and would be happy to buy more when the price dips to hold for the long term. Share buybacks and the possibility of special dividends at Aviva also mean I’m considering adding some of its shares to my portfolio.

The risk with Legal & General is whether the dividend can keep growing. With Aviva, it is can the insurer grow sufficiently now it is concentrating its business just on the UK, Ireland and Canada? I think it’s too early to tell just yet. 

Best of the rest

Outside of the FTSE 100, there are plenty of smaller businesses I also like. There are three in particular: Property Franchise Group, TinyBuild and Cerillion.

The former is similar to Belvoir, providing letting management, new-house-builds, as well as property-related financial services. It has a £100m market capitalisation and I think could grow for years to come, except if there’s a serious and prolonged UK residential property correction. It’s likely to be added to my portfolio in the next month or two. 

TinyBuild is a newly-listed gaming company. The shares have done OK since listing in March. Gaming remains a high-growth industry. I expect, therefore, that the shares can do well. The CEO holds about 38% of the shares, so is well incentivised to grow the share price and manage the company for the long term.

The possible downside is that like other gaming companies, the shares are expensive on a forward P/E of 48. Any bad news could see the stock hit hard. But the CEO stake makes me tempted to buy the shares.

Lastly and just a quick word about customer relationship management software group Cerillion. It’s a high-return, high-margin business and unusually for a tech stock, it pays a dividend. Again though, the shares aren’t cheap and for that reason, while I think it’s a great company, I won’t be buying the shares for now.

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 considered so you should consider taking independent financial advice.

Andy Ross owns shares in Legal & General. The Motley Fool UK has no position in any of the shares mentioned. 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

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

With a spare £500 I’d buy these UK shares

A financial services giant, a FTSE 250 distributor, a FTSE 100 tech stock, and a gold miner are on the…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Should I buy this defensive FTSE 100 stock for growth and returns?

This Fool takes a closer look at a FTSE 100 stock to see if it could boost his holdings via…

Read more »

Young female analyst working at her desk in the office
Investing Articles

I robbed Mr Market of this cheap FTSE stock!

This FTSE 250 stock has crashed by almost 30% in six months. But I recently bought into this battered business…

Read more »

Mature people enjoying time together during road trip
Investing Articles

3 reasons I’m backing NIO shares to soar!

NIO shares have bounced up and down this year. But where will the share price go next? My bet is…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Up 300%, is the Hurricane Energy share price an opportunity too good to miss?

This Fool looks at why the Hurricane Energy share price has soared in the past 12 months. Should he buy…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

The BT share price crashes 20% in a month. Buy now?

The BT share price has crashed by almost a fifth since coming close to £2 on 12 July. After this…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

How I’d invest £1,000 in growth shares today to target £5,000 in a decade

Our writer reckons he could do well by choosing the right growth shares today and holding them in his portfolio…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

How passive income from stocks can speed up early retirement

By investing patiently over the years, buying quality shares has given me enough passive income to retire 10 or even…

Read more »