Here are 2 of my top UK shares to buy and hold

These are two of my top UK shares to buy and hold, offering plenty of upside potential.

| 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.

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.

For me, Hays (LSE:HAS) and HSBC (LSE:HSBA) represent two of the top UK shares to buy and hold right now. I think both these stocks have great upside potential, having fallen in recent months and they remain far below pre-pandemic levels.

Hays

Recruitment firms are hugely sensitive to economic fluctuations and the current inflationary pressure appears to be pushing the Hays share price downwards. It’s currently trading at 120p a share – that’s a third off its year high of 181p.

However, the labour market is currently very strong, particularly in the UK, which is a core market for Hays. Job vacancies in the British economy recently hit a record high with 1,318,000 positions advertised.

A Totaljobs survey also suggested that two in five Britons were considering changing to a better paying job as the cost of living crisis puts pressure on households. It has been reported that 2022 would also see recruiters benefit from pent-up demand for their services as millions of workers delayed job switches during the pandemic.

In February, the firm raised its profit guidance following a stellar six months. In the six months to the end of December, pre-tax profit surged 363% to £97.7m. Hays hailed the “excellent” performance in all regions. It added that it expects full-year profits to be between £210m and £215m. The figures are broadly in line with pre-pandemic performance.

I already hold shares in Hays, but I’ll be adding more at the current price as I think there’s long-term potential here. It’s worth noting that firm’s 1% dividend isn’t overly attractive.

HSBC

HSBC is one of my favourite blue-chip stocks. While the London-headquartered bank is trading at a sizeable discount versus pre-pandemic levels, I think its got great long-term growth potential, which I why I hold this stock.

Today HSBC is trading at 524p a share, down from 567p in February. Despite 24% growth over the past year, the stock is still 17% down over three years, and nearly 20% down over five years. The Russian invasion of Ukraine, inflationary data, and Chinese real estate challenges have all weighed on this FTSE 100 giant over the past year.

However, HSBC’s share price belies some positive performance data. The bank’s pre-tax profits of $18.9bn in 2021 trumped its performance in 2019 and 2017. HSBC’s price-to-earnings ratio currently sits around 11, suggesting the stock could be considered relatively undervalued if recent performance continues.

Following the 2008 financial crash, HSBC consolidated its strategy by focusing on the UK and China. But the bank recently announced that it would be accelerating its ‘pivot to Asia’ plan which will see it increase its operations in higher growth markets.

In the short term, the current economic fallout from Covid in China could hamper progress, but in the long term, I’m confident on HSBC. I hold stocks in HSBC and will be buying more at the current prices.

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.

James Fox owns shares in Hays and HSBC. The Motley Fool UK has recommended HSBC Holdings. 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

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »