Owning shares during a stock market crash isn’t easy, especially if you’re new to investing. But some stocks are easier to live with than others. Today, I want to look at four companies I think could be the best UK shares to buy for beginner investors.
Great healthcare brands
There’s been a rush of money into speculative pharma firms hoping to discover a Covid-19 cure. I’d stay well away from that kind of business, as valuations look too high to me.
However, one healthcare company I’m happy to buy is FTSE 100 pharmaceutical business GlaxoSmithKline (LSE: GSK). In addition to a large portfolio of medicines and vaccines, this £84bn group owns an impressive collection of consumer healthcare brands such as Sensodyne, Voltarol and Nicorette. The company is also involved in efforts to produce a coronavirus vaccine.
In a recent article, I explained why I think the planned spin-out of this consumer business could make money for existing shareholders. In the meantime, I think Glaxo’s long-term prospects remain strong and expect the 4.8% dividend yield to be safe.
Glaxo may seem an obvious choice but, in my view, this FTSE 100 firm is one of the best UK shares for beginners to buy.
This should be safer than houses
The outlook for the housing market maybe uncertain. But I’d guess that properties such as military bases, motorways, wind farms, and hospitals will continue to be reliable investments.
These are the kind of assets owned by HICL Infrastructure (LSE: HICL), which is a FTSE 250 investment company with a market-cap of about £3bn. It’s been listed on the London market since 2006 and has grown to become a very reliable income stock.
Many of the company’s investments are in the UK, but HICL also operates in Canada, France, Ireland, the Netherlands and the US. This provides some useful geographic diversification.
HICL’s share price has risen by 40% over the last 10 years, comfortably outperforming the wider market. The group’s 5% dividend yield is backed by very stable income streams, many of which are paid by public sector tenants. I see this as a safe share to buy in today’s market.
The best UK share to buy today?
FTSE 250 group Tate & Lyle (LSE: TATE) hasn’t cut its dividend payout since at least 1988, which was the earliest I could find records. I don’t expect the dividend to be cut anytime soon.
Tate’s operations produce a wide range of specialist ingredients for food producers. These are used to improve the taste, feel and shelf life of a wide range of packaged foods. Alongside this, the company also produces a more traditional range of bulk sweeteners used by the food industry.
Tate & Lyle’s increasingly scientific focus is helping to keep the business growing and also supports higher profit margins. Sales rose by 5% to £2,882m last year, while adjusted pre-tax profits were 4% higher, at £331m.
Chief executive Nick Hampton takes a pleasingly conservative approach to the company’s finances and Tate & Lyle has very little debt. This provides added protection for the 4% dividend yield, which was covered a sensible 1.7 times by earnings last year.
Tate & Lyle shares have beaten the market by around 8% over the last year. I rate them as a top share to buy for long-term investors who want a reliable income.
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Roland Head owns shares of GlaxoSmithKline. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. 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.