Some of my favourite dividend shares to buy today are on sale. The recent market volatility has pushed down the valuations of high-quality dividend stocks across the market. I think it offers an excellent opportunity for me to snap up these investments at a discounted price. 

Dividend shares to buy today 

The first company on my list is the financial services group TP Icap (LSE: TCAP). 

At the time of writing, shares in this enterprise offer a dividend yield of 8.9%. According to City analysts, the yield could rise to 11% next year. 

This business specialises in trading financial instruments for clients around the world, a model that can reap significant rewards when volatility surges. Indeed, the company’s operating profits have bounced over the past couple of years as market volatility has jumped. 

Unfortunately, rising costs have weighed on the firm’s bottom line. This pressure is expected to dissipate over the next two years. As costs fall away, analysts are expecting profits to jump to £175m by 2023. That is up from £67m for 2019. 

With profit rising, the company should be able to afford to return lots of cash to investors. 

That being said, this is a highly competitive market. Plenty of firms are trying to edge in on TP Icap’s turf. As such, I cannot take its growth for granted. Higher costs and additional regulatory headwinds could also hit growth at the group. 

Despite these risks, I reckon this is one of the best dividend shares to buy today, and I would add it to my portfolio. 

Cash profits 

As well as TP Icap, I would also add homebuilder Bellway (LSE: BWY) to my portfolio. 

With a cash-rich balance sheet and a 4.6% dividend yield at the time of writing, the stock looks to me to be a great income play. 

However, in general, the UK homebuilding sector is facing growing headwinds. These include the fallout from the cladding scandal and rising costs. Both of these headwinds could hit Bellway’s growth and bottom line. And if costs rise substantially for the firm, it might have to reduce shareholder returns. 

That is something I will be keeping an eye on as we advance. Despite these challenges, I think the corporation has excellent prospects. Demand for new homes in the UK is only growing. Bellway is one of the largest builders in the sector, which means it has the capabilities to rise to meet this demand. 

With this tailwind behind the enterprise, I think the stock is one of the best dividend shares to buy now for income and growth. Even though the company might face challenges in the near term, over the next five to 10 years, I think the business can continue to build on recent earnings growth and strengthen its balance sheet. 

The post My favourite dividend shares to buy today appeared first on The Motley Fool UK.

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Rupert Hargreaves 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.

The Lloyds (LSE: LLOY) share price looks cheap to me compared to its trading history. Towards the end of last week, the stock was changing hands for around 50p, which is down from around 55p at the beginning of the year and from more than 64p before the coronavirus pandemic began.

If we go back to 2018, the stock was trading above 70p. However, a company’s share price does not really tell us much about the underlying fundamentals of the business.

It only shows us how market sentiment has changed over a short period.

That’s the past, but I prefer to look forward. And I think the stock looks cheap compared to its potential when analysing the company’s underlying fundamentals and growth outlook over the next few years.

Rising profits 

2021 turned out to be an excellent year for the lender. Thanks to booming demand for mortgages, it reported windfall profit growth. Net profit hit £5.8bn 2021, up from £1.3bn in 2020.

Unfortunately, analysts do not expect this trend to continue. They have pencilled in a near 30% decline in earnings for the current financial year.

But even after factoring in this decline, the Lloyds share price looks relatively undervalued to me. It is selling at a price-to-earnings (P/E) multiple of just 8.2. The current market average is 14. So on this basis, the shares could well be cheap. 

The stock is also selling at a price-to-book (P/B) value of 0.7. In theory, any company that is sustainably profitable should be selling at a P/B value of one or more.

Both of these numbers suggest that the shares are undervalued.

Risks to my investment case

Using the P/B value alone, it looks to me as if the shares are undervalued by around 42%.

That being said, I cannot take these numbers for granted. The cost of living crisis could have a significant impact on the bank’s profitability. If there is a housing market slowdown, the demand for mortgages could also fall. This would have a significant impact on profitability and interest income.

Rising interest rates may offset some of this decline. Still, if the economic situation deteriorates significantly, as one of the largest financial institutions in the UK, Lloyds will almost certainly suffer.

I think these potential headwinds are the main reasons why the market is placing such a low multiple on the stock. There is so much uncertainty surrounding the outlook for the business it is difficult for me to say whether or not the shares will trade up to a higher valuation any time soon.

However, even after taking these risks into account, I think over the next five to 10 years, the Lloyds share price will begin to reflect the company’s underlying fundamentals. That is why I would buy the stock for my portfolio today.

I think it is seriously undervalued compared to its long-term potential.

The post Is the Lloyds share price seriously undervalued? appeared first on The Motley Fool UK.

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. 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.

The Scottish Mortgage Investment Trust (LSE: SMT) has struggled over the past 12 months.

In that time, the company’s net asset value has declined by 16%. This marks a sharp turnaround from its performance over the past decade.

Indeed, over 10 years the trust has returned nearly 700% compared to a return of 220% for the FTSE All World Index, its benchmark.

Scottish Mortgage Investment Trust performance

This year, the trust has been hit particularly hard as investors have moved away from high-growth tech stocks. Investors have been rotating away from technology companies into businesses that may prosper in an inflationary environment, such as resources and commodities.

There has also been a change in investor sentiment in China. As regulators have started to clamp down on Chinese companies that are not adhering to certain rules and regulations, the market has given these businesses the cold shoulder.

With a significant percentage of the Scottish Mortgage Investment Trust’s portfolio invested in Chinese equities, it has suffered more than most. However, I think this trend could be about to come to an end.

And with that being the case, I feel there is an excellent argument to be made that the Scottish Mortgage share price could be about to take off.

Change in the wind

Over the past week or so, there has been a notable change in the comments from Chinese policymakers.

It looks as if the authorities in China are starting to ease up on their attack. They have also increased liquidity in the market to try to improve the performance of the country’s equity market. This could have a positive impact on a company like Tencent, which makes up a significant percentage of the trust’s portfolio.

According to the most recent investor update, the Chinese technology group made up just under 5% of total assets at the end of February. There has also been a significant shift in sentiment towards electric car manufacturer Tesla.

Earlier in the year, investors were selling shares in the company as they moved away from technology stocks. However, the current oil crisis has reignited interest in electric vehicle producers. Shares in Tesla have rallied as a result.

This stock accounted for more than 5% of the portfolio at the end of February. Other companies in the portfolio have also seen a change in investor sentiment. This could lead to an overall re-rating of Scottish Mortgage.

Risks ahead

That being said, this trend might not last forever. Market sentiment can be incredibly unpredictable. Any number of factors could cause a shift over the next few months, from the cost of living crisis to rising interest rates and the war in Ukraine. Therefore, I cannot take the recent performance for granted.

Still, as a long term investment, I believe the Scottish Mortgage Investment Trust remains an attractive buy. That is why I would add the fund to my portfolio today, although I cannot say for sure if the stock is about to take off.

The post Is the Scottish Mortgage Investment Trust about to take off? appeared first on The Motley Fool UK.

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Rupert Hargreaves 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.

Thanks to the tax benefits of Stocks and Shares ISAs, I think they are the perfect investment wrappers in which to own investments for passive income generation.

And there are a couple of stocks on the market right now I would buy for my portfolio with the overriding goal of producing an income for life.

Passive income stocks

I am a contrarian investor. That means I try to seek out companies that the rest of the market is ignoring, or selling, for one reason or another. By using this approach, I believe I can find undervalued opportunities with higher than average dividend yields and more potential for capital growth in the long term.

This is also a high-risk approach. More often than not, the market is avoiding a company because there is something wrong with the business. If there is something wrong with the corporation that I fail to understand, I could end up incurring significant losses on my capital.

However, despite this risk, it is a strategy that I have had success with in the past.

With that being the case, I would buy tobacco stocks Imperial Brands (LSE: IMB) and British American Tobacco (LSE: BATS) for my portfolio. Both of these companies look cheap compared to the rest of the market, although it is easy to understand why.

Tobacco sales around the world are in decline. Regulators are always bringing in new rules and regulations to try and control the industry. However, these companies have been able to navigate these challenges quite successfully over the past couple of decades.

Of course, there is no guarantee this trend will continue. Regulators could ban cigarette sales in a key market, which would gut their income overnight. This is a risk I will be keeping an eye on as we advance.

Stocks and Shares ISA credentials

Nevertheless, I think it would be silly to pass up these companies considering their income credentials.

The stocks yield between 7% and 10%, at the time of writing. They also trade at high single-digit price-to-earnings (P/E) multiples. That is around half the market average.

If they surpass profit expectations, the market could revisit the companies and push the shares up to higher valuations. This would be the best outcome for my investment.

Their dividends are also well covered by cash generated by operations, which suggests they have excellent passive income credentials. Their current valuations also suggest these stocks could generate capital growth. These are the key reasons I would buy the equities for my Stocks and Shares ISA today.

They have the potential for capital growth and income generation. When combined with the tax benefits of one of these rappers, I believe I could earn significant profits from these opportunities.

The post Stocks and Shares ISA investments I’d buy for passive income appeared first on The Motley Fool UK.

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Rupert Hargreaves owns British American Tobacco. The Motley Fool UK has recommended British American Tobacco and Imperial Brands. 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.

The Boohoo (LSE: BOO) share price has faced significant selling pressure over the past year. The stock is currently changing hands at just under 90p, slightly off the multi-year low of around 70p printed at the beginning of March.

Following this performance, the stock looks cheap, compared to its trading history. Indeed, back at the end of June 2020, shares in the online fast-fashion retailer were trading at more than 400p.

Considering this performance, I have been wondering if I should add the stock to my portfolio. As a contrarian value investor, I am always on the lookout for undervalued opportunities. The Boohoo share price looks like an undervalued opportunity, but do the fundamentals stack up?

Boohoo share price valuation

The company’s performance was nothing short of outstanding between fiscal 2016 and 2021. Group net profit increased at a compound annual rate of 50%. Considering this growth, it was no surprise that the market was willing to pay a high price to buy into the expansion.

Between 2016 and 2019, the stock traded at an average price-to-earnings (P/E) ratio of around 80. While this might look expensive, compared to the company’s overall growth, it was not that outlandish.

However, recently Boohoo’s growth has slowed. Even though sales continue to expand, rising costs will hit profitability in its current financial year. Analysts have pencilled in a decline of 35% for the group’s earnings this year. I think this is the main reason why the market has re-rated the Boohoo share price lower over the past couple of months.

At the time of writing, the stock is trading at a forward P/E multiple of 19. That looks quite expensive for a company that is expected to report a 35% decline in earnings. Put simply, it seems as if the story has changed here.

The story has changed

The company is no longer a fast-growing tech story. Instead, it has become a retailer struggling with rising costs.

It seems likely this trend will continue. Cost pressures across the retail industry are only becoming more pressing. The cost of living prices could also hammer consumer spending power. This could have a significant impact on the company’s sales. These are some of the biggest challenges the group is going to have to deal with over the next couple of years.

Considering these issues, I do not think that the Boohoo share price looks particularly undervalued at current levels.

I think the stock reflects all of the headwinds the corporation has to deal with. The value of the shares could remain depressed until growth returns. And with that being the case, I am not going to add the stock to my portfolio.

I would rather wait on the sidelines and see how the company’s growth story develops over the next couple of years.

The post Is the Boohoo share price seriously undervalued? appeared first on The Motley Fool UK.

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended boohoo group. 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.

Against this backdrop, I think BT (LSE: BT.A) shares look attractive, and today I am going to explain why.

Inflation protection from BT shares

It is never possible to hedge against rising prices entirely, but one of the best ways to navigate an inflationary environment is to own hard and tangible assets. These are assets like property and infrastructure. As prices rise, the cost of replacing these assets also increases, which essentially means they become worth more.

Telecommunications companies like BT rely heavily on infrastructure assets. The corporation owns tens of billions of pounds of infrastructure assets around the UK, many of which would be very challenging to replace. This is the main reason why I believe the BT share price could provide an excellent hedge against inflation.

The company can also increase the price it charges to consumers in line with rising costs. Indeed, that is just what the business is doing this year.

As many consumers are tied into long-term contracts, with inflation uplift written into the terms, the company does have a lot of flexibility in the current economic environment. So BT should benefit from both rising asset prices and rising income as inflation jumps.

Rising costs 

That being said, the company is not immune from rising prices altogether. It will have to pay out more in wages as it is likely many of its workers are also on inflation-linked contracts. The cost of servicing and maintaining equipment will also grow.

Some of these additional costs will be offset by higher prices charged to consumers.

But the telecommunications industry is incredibly competitive. There is no guarantee that customers will stay with the business if it puts up prices. If they can leave to a cheaper competitor, they may do at a moment’s notice.

I can see that several providers offer a much cheaper service than BT. This could become an issue for the corporation if it hikes prices too far too fast.

Rising costs across the group and the competitive environment are two factors I will be keeping an eye on as we advance.

The bottom line

Despite these risks, I think the BT share price is one of the best ways to protect my portfolio against inflation pressures. As such, I would buy the stock for my portfolio today.

It also offers a dividend yield of around 4.5%, at the time of writing. And this payout could increase in the years ahead as the company pushes forward with its transformation programme to reduce cost and increase profitability.

The post Why I’d buy BT shares to protect against inflation appeared first on The Motley Fool UK.

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Rupert Hargreaves 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.

Commodity trading is a vital but often overlooked part of the global economy. Every day, commodity trading houses such as Glencore (LSE: GLEN) shift tens of billions of dollars of goods around the world.

As the global economy has expanded, the role played by these trading giants has only grown. It does not look as if this trend will end any time soon. That is why I would buy this FTSE 100 stock for my portfolio to hold for the next decade. 

A global giant 

Glencore is one of the world’s largest traders, so it has a unique edge in this market. Not only is it the biggest, and therefore has stronger economies of scale than the competition, it also owns mines around the world. 

By directly owning the mines, the firm does not have to worry about buying commodities to sell. It already owns the resources. It just has to find buyers.

Many of the FTSE 100 company’s peers do not have the same advantages. Glencore also owns a vast portfolio of infrastructure assets, which help it fill orders and meet buyers’ requirements. 

Despite its competitive advantages, the corporation is still exposed to the uncertainties of the industry. Commodity prices can be highly volatile. This means the firm’s profitability is far from guaranteed.

At the same time, buying commodities and then selling them on requires a lot of debt and trust from both parties. If Glencore’s financing is cut off, it might struggle to fill orders. This could erode trust among clients. 

FTSE 100 growth 

Despite the risks outlined above, I think the future for the commodity sector is incredibly exciting. The global economy will only require more resources such as iron ore, copper and oil over the next decade. Companies like Glencore are usually the first place buyers turn when looking for new deals. 

With these tailwinds in place, I think the FTSE 100 should be able to continue to grow over the next decade. With its competitive advantages, the firm should be able to navigate the competitive and geopolitical landscape to meet buyers’ and sellers’ demands. 

What’s more, in the past, the enterprise has been willing to reward investors with substantial cash returns when profits rise. A couple of weeks ago, the group announced a bumper $4bn dividend, one of the highest payouts in the FTSE 100, as profits jumped. 

There is no guarantee this trend will continue. But considering Glencore’s track record of cash returns, I think the business will likely try to return more money to investors when it can. The stock currently supports a dividend yield of around 3%. 

As such, I would be happy to buy the FTSE 100 stock for my portfolio today to hold until 2032. I am excited about the firm’s dividend and growth potential over the medium to long term. 

The post My top FTSE 100 share to buy and hold until 2032 appeared first on The Motley Fool UK.

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Rupert Hargreaves 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.

When I am looking for income investments for my Stocks and Shares ISA, I tend to concentrate on blue-chip stocks. However, that does not mean that there are no attractive dividend shares outside of the FTSE 100. Indeed, I think plenty of UK shares look cheap compared to their income credentials right now.

Here are three equities I would buy for income today. 

Stocks and Shares ISA buy

A great example is the financial services company IG Group. At the time of writing, the stock supports a dividend yield of 5.1%. The corporation has a cash-rich balance sheet with no debt and is looking to increase its profits in the years ahead by expanding into different markets.

That said, the financial services industry is a highly regulated market. If there is a sudden change in the regulatory environment, the company’s profit margins could come under pressure, forcing it to cut the dividend.

Specialist financing provider

That is why I would also buy the specialist financing provider S&U (LSE: SUS) for my portfolio of UK shares. The company provides financial services, including car loans and property bridging finance, for customers around the country. 

At the time of writing, the stock supports a dividend yield of 5.1%.

Once again, the business has a robust balance sheet and is pursuing several growth initiatives that could lead to increased earnings in the years ahead.

Rising interest rates will also enable the corporation to charge more to borrowers. That could increase the income from its existing portfolio of loans. Despite these tailwinds, shares in the financial services company are trading at a forward price-to-earnings multiple of just 8.3. I think that looks cheap compared to its potential. One challenge the group could face as we advance is increased loan defaults.

The rising cost of living could cause some borrowers to fall behind on their payments.

This would have an impact on the company’s balance sheet, and it may have to reduce shareholder returns as a result.

UK shares for growth 

Inchcape (LSE: INCH) sells new and used vehicle parts and financial services for the automotive industry in 36 markets around the world.

This is a somewhat niche business, but that is no bad thing.

Sales and profits have increased gradually over the past couple of years as the company has expanded its footprint in the automotive industry around the world.

It suffered a small setback during the pandemic, but management expects growth to return over the next two years.

At the time of writing, the stock supports a dividend yield of 3.3%, and the distribution is covered 2.5 times by earnings per share. The company also has a cash-rich balance sheet.

Still, despite its strengths, I should acknowledge that the automotive industry is highly competitive. Just because Inchcape is growing today does not mean that it will be able to maintain its market share in this volatile market.

The post UK shares I’d buy for income in a Stocks and Shares ISA appeared first on The Motley Fool UK.

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended S & U. 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.

I firmly believe that investing in stocks and shares is one of the easiest ways to generate a passive income for life. I also think it is possible to start building a passive income stream with an investment of just £10,000.

With that in mind, here is the strategy I would use to invest a lump sum in equities today with the goal of generating income for life.

Generating a passive income

Buying equities for dividend income is a very straightforward way to generate a passive income stream. However, the strategy does come with some downsides.

Dividend income is paid out of profits. Therefore, if a company’s profitability suddenly declines, it may not be able to pay out as much income to shareholders as in previous years. Therefore, investors need to be prepared for a sudden dividend cut if an operating environment changes significantly.

I will be keeping an eye on this when it comes to all of the companies outlined below. These corporations might look like attractive dividend investments, but their prospects could change suddenly if the operating environment deteriorates.

Even after taking these risks into account, I am still convinced that equities are one of the best passive income assets to own.

Rather than focusing on the highest yielding stocks on the market, I would buy a mix of higher and lower yielding equities from my portfolio.

I think this could open the door to more capital growth as companies that are not paying out all of their profits to investors tend to invest more in their respective businesses.

This can lead to faster earnings growth rates in the long run.

Growth stocks 

This is why I would acquire pharmaceutical companies AstraZeneca and Hikma for my portfolio today. The latter yields just under 2%, while the former yields around 2.5%.

These are not the highest yields on the market. Still, both organisations are also investing significantly in developing their drugs pipelines. I think this should help underpin earnings growth and potentially dividend growth in the years ahead.

Both companies may have to overcome challenges, including competitive forces and regulatory factors, which could weigh on growth.

At the other end of the dividend spectrum, I would also look to acquire Direct Line and home builder Persimmon for my passive income portfolio. The former supports a dividend yield of around 8%, while the latter yields around 9%.

Cash returns 

These companies have a fantastic track record of returning lots of cash to investors. Their near double-digit dividend yields stand testament to these qualities. They also have strong balance sheets, which are stuffed full of cash. This should help support their dividend policies in the years ahead.

Still, their dividend credentials are far from guaranteed. A sudden drop in profitability could hit either outfit at a moment’s notice. In this scenario, they would have to reconsider their payouts.

That is why I would combine both lower-yielding and higher-yielding stocks in my passive income portfolio.

Buying the four companies outlined above would yield around 4% on my £10,000 lump sum. That could generate a passive income of about £400 a year for life.

I could then build this income stream by steadily depositing more into my investment account and acquiring a higher number of shares in the firm’s outlined above.

The post How I’d invest £10k to create a passive income for life appeared first on The Motley Fool UK.

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Rupert Hargreaves owns Direct Line Insurance. The Motley Fool UK has recommended Hikma Pharmaceuticals. 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.

Warren Buffett is one of the richest people on the planet. He has also earned a reputation for being one of the world’s greatest investors.

He did not get to where he is today by accident. Over the past seven decades, the billionaire has developed an investment strategy to help him find the best companies. And I believe that by following this investment strategy, I can also improve my returns.

With that in mind, here is one Buffett-style stock I would buy for my portfolio today, considering the company’s competitive advantages and growth potential over the next few years.

Supermarkets giant

The company I have picked for my portfolio is the retailer Tesco (LSE: TSCO). I think this is the sort of business the ‘Oracle of Omaha’ would like to include in his portfolio because he once bought the stock.

Several years ago, he owned a significant position in the retailer. But he sold after its accounting scandal broke in 2014.

While Buffett no longer owns the position, I think the competitive advantages that helped him build the conviction required to initiate the holding still exists.

That is why I would buy the stock for my portfolio today.

The company is the largest retailer in the UK and has substantial competitive advantages. Its size means it can agree on specialist deals with retailers to push down costs for its own consumers. The business has also invested significant sums in increasing the resilience of its supply chain.

It has invested in initiatives such as electric HGVs and a rail network to bring supplies over from Europe. These initiatives have helped reduce costs and improve efficiency across the enterprise.

It is also diversified with a presence in financial services and telecommunications. These alternative initiatives give the group a diversified income stream. This may help it overcome some of the current challenges in the retail industry.

Growing challenges

These challenges include the rising cost of living crisis, which will hit consumers’ buying power. A decline in consumers’ purchasing could have an impact on sales across the UK retail sector. I think Tesco is in a better position than most to navigate these challenges, due to its diversification due to its Tesco Clubcard customer loyalty scheme.

As well as these qualities, the group also has a strong balance sheet and the stock supports a dividend yield of around 4%, at the time of writing.

I think Buffett would be interested in all of these qualities. Still, as noted above, the business will face some challenges as we advance.

As such, I am not expecting it to be plain sailing for Tesco over the next few years. I think the company’s profit margins will come under pressure as costs grow and it invests more to overcome disruptions in the economy.

Despite these potential challenges, I think the group does have the qualities required to navigate uncertainty and come out on top. That is why I would buy the shares for my portfolio today as a long-term Buffett-style investment.

The post A Warren Buffett-style stock I’d buy today appeared first on The Motley Fool UK.

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesco. 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.