The Motley Fool

2 of my best UK shares to buy now

Image source: Getty Images.

The best UK shares to buy right now, in my opinion, are companies that are either doing well in spite of the pandemic, or doing well because of it. Some provide essential goods and services that are in demand whatever the economic or social situations. Others provide services that have become more popular since lockdown began

As things stand, I think two of the best UK shares to buy now are IG Group (LSE: IGG) and Warpaint (LSE: W7L).

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Possibly the best UK share to buy now

IG Group provides traders and investors with online access to financial markets. Its clients can trade anything from the FTSE 100 index to Bitcoin. Recent pandemic-induced stock market volatility has brought the group thousands of new customers. In the quarter ending 31 May, revenue more than doubled from the same time a year earlier. Meanwhile, average daily trade volume was more than three times higher.

While management don’t expect this growth to continue at the current rate, they do think there’ll be some long-term uplift from the sheer number of new customers. Even before the events of spring, revenue was already running 9% ahead of the same period the year before. This helped propel the group to record profitability. FY 2020 saw the group report net profit of £240m, up 51% from the year before. Revenue was up 36%.

Its strong performance and prospects for the future are centred around its ambitious growth plans. IG Group is focused on growing its global business, particularly in Japan, China, and the US. These are the world’s largest markets for online trading. The group currently only serves a small fraction of these markets, so the potential for future growth is huge.

Rather than merely surviving Covid-19, IG Group is in fact thriving. This is demonstrated by its huge dividend yield of over 5%. Right now, this has to be one of the highest yields on offer anywhere across the FTSE 100 and FTSE 250. When that’s combined with a P/E (price-to-earnings) multiple of just 11 times last year’s earnings, I think these shares are a no brainer. For me, they’re definitely one of the best UK shares to buy now.

Well poised for post-Covid growth

Warpaint is a different kettle of fish entirely. The group sells cosmetics across the UK and Europe. As well as owning its own brands, Warpaint also produces white label cosmetics for major high street retailers.

While sales have inevitably suffered from the temporary closure of many of its clients’ stores, online sales have grown, to at least fill some of the gap. Encouragingly, the group has still managed to achieve an operating profit for the first half of the year. Prior to Covid-19, sales performance was at the upper end of expectations. Despite Covid-19, the group remains well placed to continue its recent growth.

So far in 2020, Warpaint has signed agreements with two major clients, Tesco and Wilko. The agreements mean Warpaint’s cosmetics will be stocked in a further 400 stores. This should be revenue enhancing immediately. I think people will always want to look good, even in this strange Covid-19 world.

With a market capitalisation of just £55m, I think these shares are too cheap to ignore. Especially when its growth prospects are taken into consideration.

Speaking of growth shares...

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

Thomas 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.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.