Some people buy and sell UK shares like they are allergic to owning them for more than a few days at a time! By contrast, I am a long-term investor.
Having learned by watching the stock market success of billionaires like Warren Buffett, I aim to buy shares in British companies that I would gladly own for years or even decades, as long as the investment case did not unexpectedly change along the way (as happened to Buffett some years ago when he owned Tesco shares).
Here are three UK shares I think investors should consider this December for their long-term potential.
Cranswick
Meat, sandwiches and supermarket snacks might not seem like the money-spinning stuff of investor dreams. In fact though, that basic business has propelled Cranwsick (LSE: CWK) to a 50% share price gain over the past five years alone.
Success in this business area has also allowed the firm to be one of the few UK shares to grow its dividend annually for decades.
As Cranswick has become more successful, that has reinforced its success. It has developed economies of scale, deepened relationships with large customers and grown its expertise. Those bode well for the future.
That formula could keep delivering. There is a risk from any reputational damage caused by the company’s meat-rearing methods though. Treating animals well could be important for the health not just of those creatures but of the business too.
M&G
While asset manager M&G (LSE: MNG) does not have Cranswick’s decades-long streak of annual dividend growth, the FTSE 100 asset manager does aim to raise its payout share each year.
Given that its dividend yield already stands at a juicy 7.4%, that could potentially be very lucrative for long-term investors.
As well as dividends, M&G has been rewarding in terms of share price growth too. The share has moved up 46% over the past five years.
Past performance is no guarantee of what may happen in future, of course. One risk I see is investors pulling more out of the company’s funds than they put in, hurting fee income.
Still, with its large, multinational client base and strong brand, I regard M&G as a share for investors to consider.
J Sainsbury
People will keep buying groceries year after year in coming decades, whether in shops or online.
That could be good news for J Sainsbury (LSE: SBRY). The grocer has proven its business model over many decades, but has not stood still. As well as a large network of shops, it has developed an extensive online shopping operation.
Over the past five years, the Sainsbury share price has increased by 46%. The grocer also offers a dividend yield of 4.6%, well above the 3.1% offered by the FTSE 100 index of leading UK shares.
The UK grocery market is highly competitive and I see that as a risk for Sainsbury. It lacks the market dominance of rival Tesco — but also the reputation for keen pricing of German discounters such as Aldi.
However, if Sainsbury can keep striking the right balance between delivering quality products and competitive pricing instore while also developing its digital business further, I think it could potentially do well for many years or perhaps decades to come.
