If I started investing in UK shares today, I’d snap up these two defensive gems!

They say hindsight is a wonderful thing. Here’s a snapshot of some UK shares I’d buy if I were starting my investing journey today!

| More on:
Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'

Image source: Getty Images

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.

I don’t have a DeLorean, but if I could go back in time and apply what I know about investing now, I’d buy different UK shares to what I did then.

Let me explain how I’d approach things differently, and break down two picks I’d buy today if I was just starting out.

Quality over quantity

I wouldn’t go as far as saying that I was naive when I started investing. However, I was far less experienced. I’m not willing to admit how long ago that was, as I’d be giving away my age.

However, at that time, I used to think more was better, but I did understand the need for diversification.

One thing I’m happy to admit I didn’t truly grasp was the need to invest in stocks with defensive traits.

With that in mind, I’d happily buy shares in Premier Foods (LSE: PFD) and National Grid (LSE: NG.) if today was the start of my investing journey.

Food and energy are basic human neccessities. This means that no matter the economic outlook, earnings and returns prospects should, in theory, stay pretty robust.

Premier Foods is the owner of many of the nations favourite brands, including some of my own.

National Grid is the sole owner and operator of the electricity transmission system in the UK. It is tasked with ensuring we all get energy to our homes.

The good stuff

Starting with Premier Foods, the business’ growth, track record of performance, as well as future prospects all look good to me.

The business has grown revenue and profit in recent years, and managed to maintain a healthy balance sheet too. However, I do understand that past performance is not a guarantee of the future.

Next, the business has garnered excellent brand power, and expanded into international markets. This is a big part of the reason why the business has done so well in recent years.

Finally, the shares still look decent value for money on a price-to-earnings ratio of 12. Plus there’s a small dividend yield of 1% that could grow in line with the business. However, I do understand that dividends are never guaranteed.

As for National Grid, the business has a monopoly on its operations. This is a major draw for me, as a lack of competition can mean stable earnings and returns.

It has been seen as a dividend stock for many years, and has delivered too, in my view. At present, a dividend yield of 6.4% is attractive. Plus the shares are dirt-cheap if you ask me on a P/E ratio of just 10.

Risks and summary

For Premier Foods, food price inflation is a worry. The current cost-of-living crisis has led many consumers to move away from premium brands like the ones Premier manufactures and sells, and towards non-branded essentials. If this continues, earnings and returns could be dented.

As for National Grid, there is a chance that the government could intervene to curb investor returns. Plus, hefty investment will be needed to transition the current grid towards renewable energy. This could also impact returns in the long term.

To summarise, these two picks could be great starter stocks to consider for investors who are starting their journey today. I know if I was, I’d buy these two in a heartbeat, if I could.

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.

Sumayya Mansoor has no position in any of the shares mentioned. 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

Passive income text with pin graph chart on business table
Investing Articles

£9,000 in savings? Here’s how I’d aim to turn that into a £10,548 passive income each year!

Buying high-quality, high-yielding shares can generate a big passive income over time, especially if the dividends are used to buy…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

As AstraZeneca’s share price dips 4%, is it time for me to buy more?

Despite its 12-month increase, AstraZeneca’s share price appears very undervalued to me, and looks set to rise on strong growth…

Read more »

Investing Articles

FTSE 100 or S&P 500: where should I invest?

UK investors are often drawn to the high growth of US stocks. But there are pros and cons to be…

Read more »

Investing Articles

2 of the best US growth and dividend stocks to consider!

These heavyweight US stocks have been delivering tasty investor returns for decades. Here's why they could remain great picks for…

Read more »

Investing Articles

I reckon these 2 penny shares are hidden gems worth a closer look!

Some penny shares are well-known, whereas many others go under the radar, but that doesn’t necessarily mean they aren’t potentially…

Read more »

Investing Articles

Just released: our 3 best dividend-focused stocks to buy before August [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Investing Articles

2 FTSE 100 shares with blockbuster yields investors should consider buying

Our writer has noticed that these FTSE 100 shares offer mammoth dividend yields, and reckons investors should take a closer…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Down 36% and yielding 7.8%, is this FTSE 250 share a bargain?

Christopher Ruane looks at a FTSE 250 share with a sizeable dividend yield and a recent record of dividend growth.…

Read more »