The Motley Fool

Top British shares for April 2020

We asked our freelance writers to share their top British shares for April. Here’s what they chose:


Andy Ross: National Grid

In this bear market I’m focusing on defensive, value shares. One example is National Grid (LSE: NG) which, as a utility with regulated earnings, ought to be attractive to investors in these turbulent times. Demand for electricity isn’t going to wane with everyone working from home.

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The shares are one of the better FTSE 100 performers in the last month or so, and I expect with coronavirus still impacting businesses it’ll continue to be a good investment in April. The dividend yield is also around 5.5%, which is an added bonus, providing income when many share prices are temporarily falling. 

Andy Ross owns shares in National Grid.


Matthew Dumigan: Aviva

Multinational insurance company Aviva (LSE: AV) recently posted record full-year profits for 2019. Return on equity reached 14.3% and there was a 6% rise in operating profit to £3.2bn.

Despite the uneasy situation in financial markets, Aviva’s strong and resilient balance sheet, which is designed to withstand volatility, should significantly reduce the impact of Covid-19 on long-term performance.

Overall, an impressive set of results combined with a price-to-earnings ratio of around 3.43 indicates that the company could be massively undervalued. With that in mind, I believe Aviva presents a great buying opportunity for April and beyond.

Matthew Dumigan has no position in Aviva.


T Sligo: Rightmove

The Rightmove (LSE: RMV) share price has taken a hammering lately, due to uncertainty in the property market. Brexit has contributed to this, and now the coronavirus outbreak is making many would-be buyers anxious.

Despite this, I believe Rightmove is well placed should the market turn. Its business model requires little capital outlay and earns the company big margins. It is also debt-free.

Whilst competitors like Purplebricks are causing some disruption by attaining customers at a much lower price, Rightmove has been targeting new home builders. However, with attention focused elsewhere at the moment, will the building of new homes be affected?

I think now could be a great opportunity to pick up shares in Rightmove, whilst they are trading at a lower price.

T Sligo has no position in any of the shares mentioned.


Edward Sheldon: Diageo

Picking a top British share for April is certainly not easy. There are a lot of unknowns right now. I am going to go with alcoholic beverages champion Diageo (LSE: DGE), however. Its share price has fallen significantly in the last few months and at current levels, I think the medium-to long-term risk/reward proposition is attractive.

Diageo is not going to be immune from coronavirus disruption. With pubs and bars around the world closing, demand for its products, which include Johnnie Walker whisky, Tanqueray gin, and Smirnoff vodka, is likely to soften. Yet I do not expect sales to fall off a cliff, as people will continue to drink at home. So, all things considered, I see the recent share price dip as a buying opportunity.  

Edward Sheldon owns shares in Diageo.


Rupert Hargreaves: Tritax Big Box REIT

At this stage, it is impossible to tell which companies will survive the coronavirus outbreak. However, Tritax Big Box REIT (LSE: BBOX) looks better positioned than most. 

As the outbreak has engulfed the global economy, the demand for online delivery services has exploded. Tritax owns an extensive portfolio of modern Big Box logistics assets, typically greater than 500,000 square feet, which are essential for companies’ online delivery infrastructure. 

This suggests the business should be able to weather the storm. Management seems to agree. Over the past few weeks, executives have spent £500k increasing their holdings in the business. 

With the stock now offering a yield of nearly 7%, it could be worth following these insiders.

Rupert Hargreaves does not own shares in Tritax Big Box REIT.


Tezcan Gecgil: GlaxoSmithKline

One of my top British shares for April is GlaxoSmithKline (LSE: GSK). I believe it may prove to be a defensive portfolio holding if we find ourselves in a global recession. The company reports revenue by three segments: pharmaceuticals, vaccines, and consumer products. Global demand for most of its products are likely to stay stable despite a potential decline in economic conditions.

Year-to-date the stock is down about 20%. While the share price has declined to about 1,415p, GSK’s dividend yield has increased — it currently sits at 5.7%. The group pays dividends quarterly and the shares will go ex-dividend on 14 May. I’d consider buying the dip, especially in a Stocks and Shares ISA.

Finally, our readers may be interested to know that the group is working on a potential cure (i.e., vaccine) for the novel coronavirus.

Tezcan Gecgil does not own shares in GlaxoSmithKline.


Kirsteen Mackay: Pearson

I think learning resources company Pearson (LSE: PSON) is a FTSE 100 stock to keep an eye on in April. Although it has forecast a fall in profits for the coming year, it is also benefiting from the onslaught of home-schooling created by country lockdowns. Pearson provides individuals with online learning resources, as well as supporting the educational requirements of governments and institutions.

Pearson is a £3.7bn company with a close to 4% dividend yield and earnings per share of 34p.

Kirsteen does not own shares in Pearson.


Kevin Godbold: Unilever

We find ourselves in extraordinary times. But I’m following my colleague Harvey Jones’s advice to not waste the stock market crash. Many companies are almost impossible to value right now because the economic future is uncertain. So, my top British share for April focuses on a company with defensive, cash-generating credentials that scores well against quality metrics.

I’ve wanted it in my portfolio for years and now’s an opportunity for me to pull the trigger. I’m going for the FTSE 100’s Unilever (LSE: ULVR), because I believe its fast-moving consumer goods business will help the firm survive and thrive after the crisis.

Kevin Godbold does not own shares in Unilever.


Paul Summers: Strix

With markets likely to remain choppy for the foreseeable future, it feels more important than ever to seek out companies with defensive characteristics. My pick for April, therefore, is kettle safety control manufacturer Strix (LSE: KETL).

Something of an anomaly, Strix recently reported that there had been “minimal impact to date” from the coronavirus and that its manufacturing operations in China had now fully recovered. At a time when most companies are shelving their payouts, the minnow chose to raise its total dividend by 10% — a very positive sign.  

Strix currently trades on a little under 10 times forecast earnings. Taking into account its high margins and ability to generate great returns on the capital it invests, I’m likely to continue holding for many years to come. 

Paul Summers owns shares in Strix.


Tom Rodgers: Games Workshop

The long-term prospects for Games Workshop (LSE: GAW) are the best of any stock on the UK market right now, in my opinion.

The FTSE 250 toy giant will take a short-term hit from the coronavirus closures, that’s for sure. But it has bounced back 15% in the last week and I’m thinking 10 or 20 years ahead. That makes the share price wildly undervalued.

For a good quality, hugely profitable company at knock-down price, there is no competition – it’s my top British share for April.

Tom Rodgers owns shares in Games Workshop.


Royston Wild: Begbies Traynor Group

Amid the global coronavirus crisis it probably pays to bulk up your exposure to counter-cyclical stocks. One such share I expect to thrive over the short-to-medium term at least is Begbies Traynor Group (LSE: BEG).

The British economy is shrinking at an alarming pace. Boffins at Morgan Stanley predict that domestic GDP will contract 10% during the three months to June as the country locks down. It looks, then, as if demand for insolvency specialist Begbies Traynor’s services is set to boom.

I think the AIM share is a particularly brilliant buy today. At current prices it trades on forward P/E ratio of below 10 times and carries a near-5% dividend yield. I expect a sunny trading update at the end of the month (Thursday, April 2020), too.

Royston Wild does not own shares in Begbies Traynor.


Roland Head: Tate & Lyle

FTSE 250 firm Tate & Lyle (LSE: TATE) produces a wide range of sweeteners and specialist ingredients used by the food industry. I think the shares have been unfairly hit by the recent market crash.

The firm’s ingredients are used in many popular foods, including soups, biscuits and yoghurts. Given the sales trends reported by the supermarkets recently, I’m pretty sure that Tate & Lyle is still performing well.

The group’s dividend hasn’t been cut for 20 years. With TATE stock now trading on 11 times earnings and a yield of more than 5%, I rate the stock as a buy.

Roland Head does not own shares in Tate & Lyle.


Manika Premsingh: The Sage Group

FTSE 100 accounting software and technology services provider, The Sage Group (LSE: SGE), has seen a sharp share price drop in the stock market crash. This makes it an opportune time to buy this otherwise attractive company.

It’s financially strong and carries low debt, which is a plus in an economic slowdown. If the Covid-19 crisis continues much longer, companies on shaky financial grounds will come under pressure, even the large multinationals.

Further, demand pull-back for SGE’s products and services could be muted going forward because they are a business requirement. Lastly, it’s seen continued share price increases over the past decade, making it a dependable growth investment.

Manika Premsingh has no position in The Sage Group.


 

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The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended Diageo, Pearson, Rightmove, and Tritax Big Box REIT. 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.