What are your favourite kinds of UK stocks to buy? Today I’m thinking about five that I rate as good value in their own ways.
Favourite dividend stock
The financial sector looks tops for dividends to me. And I give my nod to Aviva (LSE: AV.)
Aviva went through some painful restructuring. And then it emerged into… the pandemic, stock market crash, and soaring inflation and interest rates.
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But even with the shares coming back, we’re still looking at a 6.8% forecast dividend yield.
The interim dividend rose by 7%, after a £300m share buyback in the first half. And the board told us that “we anticipate further regular and sustainable returns of capital in the future“.
I still expect cyclical risk and volatility, as we saw in the past 10 years. But for a long-term dividend buy, I think Aviva has to be one to consider.
Favourite growth stock
I don’t buy many growth stocks these days. But I do like ITV (LSE: ITV) now.
ITV has been hit by the downturn in advertising spend since the pandemic.
But that’s only part of the story, and streaming service ITVX is growing strongly. At the interim stage, we heard that ITVX saw streaming hours up 15% with digital ad revenue up 17%.
And though overall revenue slipped a bit in H1, adjusted EBITDA soared by 40%.
It’s still a competitive market. And we don’t yet know how well the advertising business will bounce back. In fact, I think ad spend could stay weak for a few years yet.
But I see long-term growth potential here. And, in fact, good dividends too.
AIM for penny stocks
My penny stock pick has to be Topps Tiles, with a share price of 47p and a market cap of just £93m. There are much smaller ones, but the lower we go, the greater the risk.
If the building trade doesn’t recover as strongly as I think it might, then Topps could suffer. But forecasts show a return to earnings growth in 2025. And there’s a 7.5% forward dividend yield.
Best AIM stock? There might be a fair bit of hope in this one, as it’s a stock I’ve lost money on. I’m talking about boohoo, whose share price has collapsed since its peaks.
There’s plenty of debt, and there’s no profit right now. But if the firm can get back to positive free cash flow in the 2024-25 year, as the board hopes, I think that might trigger a stock price climb.
Best investment trust
I’ve always liked investment trusts, and I’ll finish with one of those. It’s real estate investment trust (REIT) Primary Health Properties, whose shares have had a rough time.
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REITs typically carry large debt, used to fund the purchase of their real estate assets. When interest rates are high and property values low, that can be a squeeze. And I think it’s the biggest threat now.
But Primary Health Properties makes its money from renting out healthcare facilities, typically on long leases and to the government.
And the long-term need that I see for that makes it the investment trust I’ll probably buy next.
