These 2 UK shares could help me reach £1,000,000 in my Stocks and Shares ISA

A FTSE 100 compounding machine and a FTSE 250 value stock are the UK shares Stephen Wright thinks could help make him an ISA millionaire.

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I’m aiming for a million in my Stocks and Shares ISA. And I think there are a couple of UK shares that can help me along the way. 

By investing in the best opportunities I can find, I’m hoping to compound my way slowly and steadily towards £1,000,000. And the stocks on my radar at the moment are close to home.

Aiming for £1,000,000

From where I am at the moment, investing £1,000 a month at 5% would get me to £1,000,000 after 25 years. This is my approach and there are a couple of principles I plan to stick to.

The first is that I want to try and limit my risk as much as possible. It’s impossible to eliminate risk entirely, but my aim is to give myself the best chance of avoiding losses where possible.

The second is being patient. My strategy is to use the power of the compound interest formula to build wealth over time – but that means making sure I give my investments time to develop.

With that in mind, there are a couple of UK shares that fit the bill. Adding either or both to my portfolio can, in my view, give my chances of getting to the £1,000,000 mark a meaningful boost.

Halma

At first sight, Halma (LSE:HLMA) doesn’t look like great. The stock trades at a price-to-earnings (P/E) ratio of 37, has a 1% dividend yield, and is roughly where it was three years ago.

Beneath the surface though, things look much more interesting. While the stock hasn’t gone anywhere, earnings per share have increased by an average of 8% a year.

If Halma can keep acquiring new businesses and improving the ones it already owns, I think this could be a great investment at today’s prices. I think there’s an opportunity at today’s prices.

The biggest risk is if that growth stalls or doesn’t materialise. But while I’m not expecting the path forward to be smooth, I think these shares could be worth a lot more 25 years from now.

Dr Martens

Shares in FTSE 250 firm Dr Martens (LSE:DOCS) are up 8% since the start of the year. But at 95p, they’re still some way below my £1.30 estimate of their intrinsic value.

The business has struggled recently, but I’m convinced it’s through the worst. In particular, I think things look promising in the US, where 43% of the firm’s sales come from.

A dividend with a 6% yield could help me get to where I want to be. By reinvesting this – either in Dr Martens, or elsewhere – I could increase my wealth over time.

There’s always a risk of a dividend cut – especially if I’m wrong and the US hits a recession. At a (P/E) ratio of 9 though, I think the potential reward looks worth it.

Investing in the UK

Becoming an ISA millionaire is going to take patience, discipline, and some careful thought, but it looks achievable to me. And I think UK stocks can help me along the way.

With my Stocks and Shares ISA at its contribution limit, my next move will have to wait. But if share prices stay put I’ll be looking to buy both Halma and Dr Martens in April.

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.

Stephen Wright has positions in Dr. Martens Plc. The Motley Fool UK has recommended Halma Plc. 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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