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Top shares for April 2019

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Paul Summers: Imperial Brands

With global markets continuing to wobble, I believe resilient income-generating stocks have a place in most portfolios. One that sticks out for me at the moment is Imperial Brands (LSE: IMB).

Although annual global cigarette volumes are falling, the tobacco giant’s focus on cutting costs and investing in new products over the last few years should allow it to get profits back on track in 2019.

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Trading on 9 times forecast earnings at the time of writing, Imperial’s price tag is hardly demanding. The vast amount of free cash flow the company generates also allows it to be generous with dividends. A cash return of 205.2p per share is expected in the current financial year, equivalent to a yield of 8%.

Paul Summers has no position in Imperial Brands.

Edward Sheldon: Hargreaves Lansdown

My top stock for April is Hargreaves Lansdown (LSE: HL), which runs the UK’s largest investment platform. The shares took a hit late last year as global equity markets wobbled, and I believe this share price weakness has created an attractive buying opportunity. It’s worth noting that top portfolio manager Nick Train has recently been adding to his position in the stock.

The long-term growth story here remains intact. Britons desperately need to save and invest for retirement and, as the market leader in the investment platform space, Hargreaves looks well placed to profit from this. Moreover, as markets rise over time, the group should benefit. The shares aren’t particularly cheap by traditional valuation measures… however, I believe this growth stock deserves a premium valuation.

Edward Sheldon owns shares in Hargreaves Lansdown.

Rupert Hargreaves:

You might have used (LSE: MONY) to help you save money on your car, home or travel insurance, but have you ever thought about using the site to help build your savings? 

I think it is worth considering this company as an investment. Over the past six years, net profit has nearly tripled, and analysts believe EPS will rise a further 19% during the next two years. This growth, coupled with the firm’s operating profit margin of 30%, more than justifies its current P/E of 19.3 in my opinion. The group is also on the lookout for select acquisition to boost earnings growth. 

As well as the growth, there’s also a 4% dividend yield on offer.

Rupert Hargreaves does not own shares of Moneysupermarket.Com.

Royston Wild: Diageo

Diageo (LSE: DGE) is the perfect stock for tricky times like these.

The bickering and stalemate in Westminster as to how Britain exits the European Union, and when withdrawal will actually take place, appears to be nailed on to persist for the next several weeks at least. There’s plenty of scope for sterling to sink again, then, and therefore firms like Diageo that report earnings in foreign currencies could see their share price gain some extra ground.

Regardless of Brexit, though, a host of other macroeconomic and geopolitical worries – like slowing Chinese and European growth – could turbocharge demand for classic defensive stocks like Diageo.

The FTSE 100 firm’s share price has detonated by double-digit percentages in 2019 already. And I reckon there’s room for plenty more strength in the weeks and months ahead.

Royston Wild owns shares in Diageo.

Manika Premsingh: Lloyds Banking Group

At the risk of being contrarian, I am sticking my neck out on Lloyds Banking Group (LSE: LLOY) for April. The share price might have underperformed in recent years, but the trend line is pointing steeply upwards in 2019 so far.

Strong earnings in 2018 and a positive outlook for 2019 despite the Brexit overhang have most likely contributed to this. But the reason I like it for April is because it’s made headway recently in advancing its wealth management joint venture with Schroders by announcing the management team, which further underlines its bullishness. Investing in this FTSE 100 company isn’t without risk of course, given that it’s a UK-focused bank in shaky economic times. But I believe this is a risk worth taking.

Manika Premsingh has no position in Lloyds Banking Group. 

Roland Head: Royal Dutch Shell

The UK’s largest listed company looks like a great buy to me at the moment. Oil and gas giant Royal Dutch Shell (LSE: RDSB) is pumping out surplus cash as it reaps the rewards of tough decisions made during the 2015 oil market crash.

Chief executive Ben van Beurden remains focused on building a sustainable long-term strategy. The company is starting to plan for a shift away from oil, towards renewables and gas.

In the meantime, the shares trade on a modest 12 times forecast earnings with a dividend yield of 5.9%. In my view, this is one of the safest dividends you’ll find.

Roland Head owns no share mentioned.

Kevin Godbold: Imperial Brands

Investor sentiment has floored Imperial Brands (LSE: IMB) since it peaked in August 2016. The company offers fast-moving consumer goods such as cigarettes, tobaccos, papers, cigars and next-generation smoking products.

I reckon the move down was driven by regulatory fears following noises from the US government and by the unwinding of the once-popular so-called ‘bond proxy’ trade, which affected most defensive-style shares. But the down move could be over, and the upside potential is large from today’s low valuation. I reckon the share price could creep up in April and beyond, adding to investor gains from that huge dividend yield.

Kevin Godbold owns no Imperial Brands shares.

G A Chester: BAE Systems

Defence giant BAE Systems (LSE: BA) has fallen out of favour with investors over the past nine months. The shares have lost around a third of their value. The killing of Saudi Arabian dissident Jamal Khashoggi seems to be a particular weight on investor sentiment. Political repercussions have created uncertainty around BAE’s trading relationship with Saudi Arabia, a significant customer.

However, these kinds of situation are typically resolved pragmatically. With BAE being a world-class business, and with its shares trading at little more than 10 times earnings (with a dividend yield of 5%), I believe now could be a great time to buy for the long term.

G A Chester has no position in BAE Systems.

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The Motley Fool UK has recommended Diageo, Hargreaves Lansdown, Imperial Brands, Lloyds Banking Group,, and Schroders (Non-Voting). 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.

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