Investing money in UK shares after the recent stock market crash could deliver attractive returns in the long run. Many FTSE 100 and FTSE 250 stocks currently offer wide margins of safety that could allow them to produce impressive returns as the market recovers.
Certainly, short-term risks continue to be relatively high. But the stock market’s track record of successful turnarounds means that now could be an opportune time to buy undervalued shares.
With that in mind, here are two UK shares that could offer improving prospects for long-term investors. Buying them now could improve your financial situation in the coming years.
Investing money in Vodafone could be profitable
Investing money in Vodafone (LSE: VOD) after its 20% share price decline in 2020 could lead to market-beating returns in the long run. The company’s recent update showed that it has delivered a resilient financial performance despite being impacted by the coronavirus pandemic over recent months.
Notably, its investment in infrastructure seems to be delivering synergies that could improve its operational performance. It is also making progress with digital opportunities, while seeking to adopt a more efficient structure to boost its profitability. This could strengthen its market position, and help to improve its cash flow in the coming years.
Investing money in Vodafone could produce a healthy income return in the coming years. It currently yields around 6.7%, which could make it an attractive income investing opportunity while many other UK shares have cut their shareholder payouts after the 2020 market crash. Rising demand for the company’s shares may help to lift its price, which could lead to higher returns for investors.
Kingfisher: a retailer with recovery potential
Investing money in Kingfisher (LSE: KGF) at the start of the year would have produced a healthy return, despite the market crash. The DIY retailer’s share price has outperformed many UK shares, with it currently trading around 24% higher than it was at the start of the year.
The main reason for its strong performance has been rising sales. For example, Kingfisher reported a rise in its second quarter like-for-like sales of 21.8%. This was largely driven by e-commerce sales growth of over 200% in May and June 2020, with the business now expecting to deliver an improvement on its half-year pre-tax profit compared to the previous year.
Although the prospects for retailers such as Kingfisher are likely to remain uncertain in the short run due to coronavirus, investing money in the company could be a sound move. It has a growing online presence at a time when many consumers are quickly shifting towards e-commerce, and is implementing changes to its business that could reduce costs and make it more efficient. As such, it could generate further share price growth, and help to improve your financial prospects.
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Peter Stephens owns shares of Vodafone. 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.