The stock market crash of 2020 leaves an abundance of UK shares trading on rock-bottom valuations. Some of these can be bought at prices that are so cheap I consider them to be ‘once in a lifetime’ investing opportunities. It gives investors a chance to significantly improve their investment returns and set them on the path to make a million or more.
UK shares might be off their March lows, but today remains a great time to try and grab a bargain or two. Studies show that long-term share investors make average returns of up to 10% a year, and that those capitalise on falling markets tend to make the biggest profits.
Buying UK shares could certainly make you richer than investing in Bitcoin (where price movements remain wild and unpredictable) or buy-to-let property. In the latter case, mounting running costs and rising tax bills have crushed landlord profits. But here’s one top British stock I think is too good to miss today.
UK shares: one of my favourites
I own a number of UK shares and Bunzl (LSE: BNZL) is one of them from the FTSE 100. It’s a stock which, unlike much of the broader market, has risen 17% in value since mid-to-late February just before the stock market crash began. But this is a business that deserves to have outperformed the broader market following the Covid-19 outbreak, and recent news flow shows why.
This blue-chip supplies high-margin personal protective equipment (PPE) like gloves, masks and gowns that are helping the global economy to get back on its feet as the pandemic rages on. It also sells disinfectant, mops and buckets, hand sanitiser, waste management products and the like. These are goods for which demand is likely to be much stronger in the years ahead versus pre-coronavirus levels as the world tries to guard itself against future pandemics.
Bunzl is technically a cyclical share, sure. But thanks to the broad range of industries that it serves, allied with the broad range of essential products and services it provides, this is a FTSE 100 company that can be considered ‘recession proof’. It’s why the business has raised the annual dividend for 27 years on the spin.
A UK shares millionaire-maker?
A trading update of just a few weeks ago underlines that among all UK shares, this one has exceptional defensive qualities. Bunzl lauded “the breadth of the customer sectors and geographies the group operates in and the wide range of products supplied”. It said that revenues would rise 6% at actual rates (or 2% on an underlying basis) during the first half of 2020. Compare that to the swathes of FTSE 100 stocks that have seen sales plummet as the Covid-19 outbreak and consequent global lockdowns have weighed.
I consider Bunzl to be one of the best UK shares out there for those seeking ultimate peace of mind. City analysts expect the FTSE 100 share to endure a rare earnings reversal in 2020. But they expect the support services giant to get back on the front foot again from 2021 as the initial Covid-19 shock disappears. This is one blue-chip I plan to hold forever, and reckon it’s a particularly great buy in these uncertain times.
Royston Wild owns shares of Bunzl. 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.