The Motley Fool

3 UK shares I’d buy now

Image source: Getty Images

Like many investors, I have a watch list of shares I’d like to buy but haven’t (yet). Today I want to look at three of these UK shares that I’d like to buy now.

A UK industrial heavyweight

IMI (LSE: IMI) may not be a company you’re familiar with. This £3bn FTSE 250 engineering firm specialises in “products that control the precise movement of fluids” and has clients in most major industrial sectors.

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...

Trading has been good this year, with weakness in sectors such as oil and gas being offset by gains from the group’s medical division, whose products include ventilators. I’d guess this will be a one-off boost, but even so, I’m pleased to see that profits are expected to rise slightly this year and be stable in 2021.

I don’t know what the future holds for the world economy. But IMI has a track record of double-digit profit margins and strong cash generation. With the stock trading on 15 times earnings and offering a forecast dividend yield of 2.1%, I would feel confident buying this UK share today.

An overlooked FTSE 100 star?

FTSE 100 firm DCC (LSE: DCC) is an Irish energy group. It owns a range of businesses, including LPG and heating oil suppliers and fuel stations in a number of countries. DCC also has businesses distributing technology and healthcare products to trade customers.

DCC looks well run to me, with stable profit margins and comfortable levels of debt. One attraction for me is the dividend, which has doubled since 2013. Although the current dividend yield is only 2.7%, I’m happy to accept a lower upfront yield when buying shares with a strong track record of income growth.

The shares currently trade on about 16 times forecast earnings. I think this could be a useful addition to my portfolio. I’d be happy to buy the stock today.

A UK share I’d buy for income

My final pick is Telecom Plus (LSE: TEP). This is a utility share with a much stronger record of growth than most its rivals. The reason for this is that the group is a reseller that bulk-buys gas, electric, mobile, and broadband then resells these services through its Utility Warehouse business.

Telecom Plus is still chaired by Charles Wigoder, who joined the company in 1998 and has built it into a £1.1bn FTSE 250 business. Mr Wigoder owns about 12% of the group’s shares. This suggests to me that his interests should be well-aligned with those of shareholders.

I like to see owner-management at companies, because in my experience it often results in reliable long-term returns. That’s the case here, in my view. The Telecom Plus share price has risen by 270% over the last 10 years. The dividend has doubled since 2012.

Last week’s half-year results showed profits up slightly, despite the disruption caused by the spring lockdown. CEO Andrew Lindsay expects the number of customers and services sold to increase modestly over the full year.

This UK share is up by more than 50% from the lows seen during the March stock market crash. Despite this, Telecom Plus still looks reasonably valued to me, with a forecast dividend yield of 3.9%. Given the group’s track record of growth, I’d be happy to buy the shares at this level.

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!

Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended IMI. 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. 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.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.