5 of the top bargain-basement UK shares to consider buying right now

Many UK companies are fairly priced, but these five shares are plain cheap, despite being backed by good businesses with prospects.

| 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.

Number 5 foil balloon and gold confetti on black.

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.

Some UK shares just look too cheap. So here are five that look well worth deeper research and consideration right now.

A turnaround may be coming

In the lead FTSE 100 index, telecommunications giant BT (LSE: BT.A) is changing hands on a low rating. With the share price near 146p, the forward-looking price-to-earnings (P/E) ratio is just below 7.9 for the trading year to March 2026. That compares to the average rating for the FTSE 100 at about 13.6.

However, BT does have risks, one of which is the mountain of debt on the balance sheet. Another is its patchy earnings record, suggesting an uncertain path ahead. On top of those things, BT operates in competitive markets.

Should you invest £1,000 in Primary Health Properties right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Primary Health Properties made the list?

See the 6 stocks

Nevertheless, the company announced this year it had passed peak capital expenditure for its fibre broadband rollout programme. So perhaps more of the firm’s cash flow can be used for debt-reduction and shareholder dividends.

Meanwhile, the anticipated dividend yield for next year is running at about 5.5%, which offers shareholders a decent level of income now. But if the company’s cash flow can drive dividend progression in the coming years, the rising payment may help push the share price higher too.

Created with Highcharts 11.4.3Bt Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

BT may be on the cusp of an enduring turnaround. However, City analysts predict flat earnings next year after a decline this year. So there’s much for the firm to do. But that’s probably why the valuation looks undemanding.

The attractive financial sector

Meanwhile, some of the big financial companies are on low ratings, such as Legal & General and Aviva. As I write (17 October), both have forward P/E ratings below 10 and anticipated dividend yields well above 7%.

In each case, City analysts anticipate robust earnings increases this year and next with positive dividend progression too.

However, the financial sector is cyclical and that can lead to some wide swings for earnings and share prices. So it would be easy to mis-time an investment in the shares and end up losing money.

Capital gains from rising long-term share prices may prove elusive. Nevertheless, both have impressive valuation and trading figures now.

In the wider financial sector, TP ICAP looks like good value and could provide useful diversification in a portfolio of stocks. The firm is a UK-based liquidity and data solutions company. But, once again, the business is exposed to cyclical risks and may never attract a higher valuation than it has.

An adventurous oiler

Another to consider is oil and gas company Serica Energy. City analysts’ earnings estimates are robust, and all four brokers following the firm have the stock as either a Buy or a Strong Buy.

That’s no reason in itself to buy the shares, but it makes the company worth further investigation. Meanwhile, the forward-looking P/E is just below three.

Of course, the oil sector is another that’s cyclical, adding risk. On top of that, smaller oil companies like this can see big swings in their fortunes.

Nevertheless, the trading numbers look good and that rating is low!

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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.

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Tp Icap Group 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.

More on Investing Articles

Investing Articles

Here’s the dividend forecast for Rolls-Royce shares as Trump rocks the markets

Rolls-Royce shares have joined in the volatility over the past week. However, with the direction being largely downwards, the dividend…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Dividend yields of up to 11%! Here are 3 UK passive income stocks to consider

Searching for ways to supercharge your passive income with UK dividend stocks? Here are three that have grabbed our writer's…

Read more »

Young Caucasian woman at the street withdrawing money at the ATM
Investing Articles

£10,000 invested in NatWest shares at the start of 2025 is now worth…

NatWest shares surged into 2025, but things have become a little more complicated in recent weeks. Dr James Fox explores.

Read more »

Investing For Beginners

Why the FTSE 250 could outperform the FTSE 100 for the rest of the year

Jon Smith explains why the FTSE 250 could do better than its big brother when factoring in domestic exposure and…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Tariff fears send the Lloyds share price tumbling, but the dividend yield is climbing

Just when the Lloyds Banking Group share price had been rising steadily, along comes a global upheaval to knock it…

Read more »

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

Here’s how a stock market crash could help an investor retire years early

A stock market crash can be alarming -- but for the well-prepared investor, it can also be an exceptional opportunity…

Read more »

Investing Articles

1 key fact to remember in this stock market correction

This writer takes a look at a FTSE 100 investment trust that is catching his eye after the recent massive…

Read more »

Investing Articles

I was wrong about the Tesla stock price!

Tesla stock's been affected more than most by ‘Liberation Day’. But our writer has other concerns about Elon Musk’s company.

Read more »