I’d buy these 2 cheap UK shares today to make a million

There are plenty of cheap UK shares on the market at the moment, but there are two companies in particular that stand out right now.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Despite the stock market’s positive performance over the past few weeks, there are still plenty of cheap UK shares on offer for investors in the market.

Companies like the two profiled below could help investors grow their wealth and put them well on the way to making a million.

Cheap UK shares to buy

Legal & General Group (LSE: LGEN) is one of the top income investments in the FTSE 100. Shares in the financial services giant have risen steadily in value over the past few weeks. Despite this performance, the stock continues to look cheap.

As one of the world’s largest asset managers, Legal has been impacted by the coronavirus crisis. Nevertheless, of all the cheap UK shares, the stock may have been affected by the pandemic to a lesser degree. The corporation registered an impressive jump in new business during the first quarter of the year.

Management also came out to announce the company would be standing by its dividend commitments. This was highly impressive, considering the backdrop the organisation faced and suggests Legal’s business is stable. In its final dividend, the firm paid out around £750m to shareholders.

As one of the country’s largest pension managers, L&G should continue to see high demand for its services. That should support further dividend and earnings growth in the years ahead, which makes the company stand out as one of the top cheap UK shares.

As such, now could be the perfect time to snap up a share of this dividend champion while it trades around 25% below the level it started the year.

AstraZeneca

AstraZeneca (LSE: AZN) is another cheap stock I’d consider buying today. As one of the world’s largest pharmaceutical corporations, Astra operates a relatively defensive business model. It’s also in line to be one of the first pharmaceutical companies to produce a coronavirus vaccine. If successful, this could have a large impact on the organisation’s bottom line.

Cheap UK shares like AstraZeneca’s don’t come around that often. The company is currently trading at a forward price-to-earnings (P/E) multiple of 21. That’s compared to a P/E of more than 30 for some of the business’s US-listed peers.

These numbers suggest the stock may offer a margin of safety and the potential to produce substantial capital returns from current levels. On top of this capital gains potential, the stock also supports a dividend yield of 2.6%.

Unlike most cheap UK shares, Astra hasn’t cut its dividend recently. And it doesn’t look as if it’ll have to either. The payout is covered 1.5 times by earnings per share, which gives the group lots of headroom to maintain, or increase, the payout.

Therefore, if you’re looking for cheap UK shares that may be able to produce high total returns for your portfolio, it might be a good idea to consider buying Astra today.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »