Best British stocks for March

We asked our freelance writers to share their best British stock picks for March, including Legal & General Group and Dignity.

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 We asked our freelance writers to share the best British stock they’d buy this March. Here’s what they chose:

Edward Sheldon: Legal & General Group

My top stock for March is FTSE 100 financial services company Legal & General Group (LSE: LGEN).

There are a few reasons I’m bullish on the shares at present. One is that the company looks well placed to benefit from the shift into ‘value’ stocks. Right now, the stock has a P/E ratio of less than 10.

Another is that the group should benefit from rising interest rates. Higher rates should enable it to earn a greater return on its investments.

A risk to be aware of here is that the stock can be quite volatile at times. Overall, however, I think the risk/reward profile is attractive at the moment.

Edward Sheldon owns shares in Legal & General Group.

Rupert Hargreaves: Dignity

Funeral provider Dignity (LSE: DTY) suffered a severe setback in 2018. It had to slash prices following a spate of bad publicity. The firm now looks to be back on track. Analysts are forecasting earnings per share of 47p for 2021. That puts the stock on a forward price-to-earnings (P/E) multiple of 13.8. However, the company could miss this growth target if sales do not meet expectations. This is something I will have to keep in mind.

Still, I would buy the stock for its growth potential in the next couple of years.

Rupert Hargreaves does not own shares in Dignity.

Roland Head: Royal Mail

My stock pick for March is postal group Royal Mail (LSE: RMG). Chief executive Simon Thompson believes there has been a “structural shift” in parcel volumes since the start of the pandemic. I think he’s probably right.

What’s more, I think Mr Thompson is finally making the changes needed to modernise this business.

Royal Mail’s share price slide has left the stock trading on seven times forecast earnings, with a 6% dividend yield. Although the group faces some risks from rising fuel and wage costs, I think this is too cheap.

Roland Head does not own shares in Royal Mail.

Andy Ross: SSE 

Fairly early in March, a trading announcement from FTSE 100 energy giant SSE (LSE: SSE) is expected, which could lift the share price because these shares have a number of attractions. One is the ongoing shift to so-called value stocks, which I think would include SSE. Another is that the company has already upgraded its full-year adjusted earnings per share guidance from 83p to 90p, so the business is clearly performing well. Thirdly, there is the 5% dividend yield, making SSE potentially a decent income and growth share.  

Only the high levels of debt and the inconsistency of renewable energy would give me pause for thought when it comes to investing in SSE.  

Andy Ross does not own shares in SSE.

G A Chester: Smith & Nephew 

I think investor interest in FTSE 100 medical devices firm Smith & Nephew (LSE: SN) could start to rekindle, following recent results and an announcement it’s appointed a new CEO. 

The results were in line with guidance. Meanwhile, the incoming CEO — Dr Deepak Nath — looks a strong candidate to deliver SN’s medium-term targets of consistent 4%-6% organic revenue growth and a trading profit margin of at least 21% (currently 18%). 

There are no guarantees, but Nath is fresh from leading a major programme to drive growth and margin expansion in the diagnostics business ($6bn sales/15,000 employees) of German medical devices giant Siemens Healthineers

G A Chester has no position in Smith & Nephew or Siemens Healthineers. 

Stephen Wright: Howden Joinery

My top stock for March is Howden Joinery Group (LSE:HWDN). The company sells kitchen and joinery products primarily to the UK homebuilding trade. I like this stock because I think it trades at a fair price and the company has a strong track record. 

The company has grown its retained earnings consistently since 2016 and lowered its share count steadily since 2014. I think that today’s prices imply a return of 6.5% and 7% out of the gate. If the company keeps doing what it’s doing, I think this stock can do very well going forward.

Stephen Wright does not own shares in Howden Joinery.

Paul Summers: Halma

Thanks to its strong track record of growing revenue, profits and dividends, there can’t be many better companies in the FTSE 100 than life-saving tech firm Halma (LSE: HLMA). Having tumbled in value so far this year on virtually no news, I think now could be a great time for me to load up.

Sure, a P/E of 35 still isn’t cheap. With minimal debt, a proven acquisition strategy and a market that can only grow in the years ahead, however, I’d much rather back the Amersham-based business over one of the index’s cheaper, more cyclical constituents.

Paul Summers has no position in Halma

Royston Wild: United Utilities 

During this period of extreme market volatility I think grabbing some classic defensive stodge could be a good idea. I’d do this by investing in water supplier United Utilities (LSE: UU). This FTSE 100 company’s share price stability in spite of the Ukraine crisis illustrates how it is (at least in my opinion) an ideal lifeboat when markets are nervous. Essentially the water it supplies can be guaranteed to remain in high demand whatever crisis comes along, which in turn keeps profits nicely stable. 

I also like United Utilities because of its big dividend yields, a happy consequence of its super-defensive operations. These sit at a healthy 4.2% and 4.4% for the financial years to March 2022 and 2023 respectively. 

Royston Wild does not own shares in United Utilities.

Andrew Woods: easyJet

As global travel reopens, I think easyJet (LSE: EZJ) stock could provide excellent growth for March and the long term. Only last month, the company announced that losses had halved for the three months to 31 December 2021, compared to the same period in 2020.

Looking forward, Switzerland, Norway and Sweden have removed just about all of their pandemic restrictions. I think it is only a matter of time before others follow. With more open borders comes more travel, and I think easyJet could make a great comeback sometime soon.

Andrew Woods has no position in easyJet.

Andrew Mackie: Fresnillo

My top pick for March is Fresnillo (LSE: FRES). The world’s largest silver miner has had a torrid time of late. Omicron, together with new Mexican labour laws, has hit production at its flagship mines.

However, I am looking beyond these short-term headwinds. Silver is probably the cheapest metal on the planet. As inflation continues to increase, I see tremendous upward potential for the white metal, which in turn will be reflected in the miner’s share price.

Silver is not only a precious metal. It has significant industrial uses too. As the world transitions to a low-carbon economy, this will ensure demand remains buoyant for decades to come.

Andrew Mackie owns shares in Fresnillo.

Kevin Godbold: Glencore

Commodity prices have been robust for some time. And it’s no surprise to see diversified mining stocks such as Glencore (LSE: GLEN) marching upwards. When prices are high and commodities are in demand, Glencore’s cash inflow rises.

Glencore is well placed in the nickel market with infrastructure it’s been optimising for decades. And that means the business looks set to benefit from rising demand from the electric vehicle industry and other sectors. Nickel is used for its electrical and magnetic properties among many other applications.

I think the stock could elevate further through March and beyond.

Kevin Godbold does not own shares in Glencore.

Christopher Ruane: S4 Capital

After a strong 2021, S4 Capital (LSE: SFOR) has seen its share price fall so far this year. Investors are concerned about the impact of costs on profit margins as the company keeps growing at speed.

I think the fast growth shows strong demand for S4’s services. Its client roster is expanding. A digital-only strategy seems well suited for the current marketing environment. Annual results due in March will reveal how S4 is performing as it tries to double revenues and gross profits organically within three years.

Christopher Ruane owns shares in S4 Capital.

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 Fresnillo, Halma, Howden Joinery Group, and Smith & Nephew. 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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