We asked our freelance writers to share the top British stocks they’d buy in the month of December. Here’s what they chose:
Edward Sheldon: Reckitt Benckiser
My top British stock for December is consumer goods company Reckitt Benckiser (LSE: RB).
There are a few reasons I’m bullish on RB right now. Firstly, the company is benefiting from the increased focus on hygiene across the world. Recent Q3 results showed like-for-like growth of 19.5% in the group’s hygiene division.
Secondly, top-level insiders, including the CEO and the Chairman, have bought stock recently. This suggests they’re confident about the future and that they see the stock as undervalued at present.
Reckitt shares have pulled back recently, and I think this pullback has created a brilliant buying opportunity. I bought more shares in the company myself in November.
Edward Sheldon owns shares in Reckitt Benckiser.
Tom Rodgers: MTI Wireless Edge
With the prospect of a Santa rally buoying UK buying interest I’m looking very closely at adding to my holdings in MTI Wireless Edge (LSE:MWE). The wireless antenna builder has hit all time highs by signing its biggest 5G contracts to date. Selling into new markets for its defence and irrigation products also bodes well. And a 3.6% forward dividend yield is pretty high for an AIM share. Fair warning: at a £53m market cap it’s at the lower end for shares I’d buy, but I’m less concerned than normal because MTI has been running since 1972.
Tom Rodgers owns shares in MTI Wireless Edge.
Rupert Hargreaves: Reckitt Benckiser
Shares in Reckitt Benckiser (LSE: RB) jumped at the beginning of 2020. Unfortunately, in recent weeks, the stock has lost value. I think this could be a fantastic opportunity to buy shares in the business for the long term.
Indeed, while shares in the maker of brands such as Dettol and Air Wick have slumped recently, I reckon the demand for these products will only rise in the long run. This suggests the firm has many years of growth ahead of it.
The potential for sales growth, coupled with Reckitt’s dividend track record implies one will see high total returns from the stock in the years ahead.
Rupert Hargreaves does not own shares in Reckitt Benckiser.
G A Chester: Sage
The FTSE 100 isn’t noted for global giants in the technology sector. Sage (LSE: SGE), the world leader in accounting technology for small- and medium-sized businesses, is an exception.
The market responded negatively to Sage’s recent annual results. I’m convinced this has provided long-term investors with a great opportunity to buy into a top-quality company at an attractive price.
The results were ahead of expectations, but the market had a hissy fit about Sage’s plans for its current financial year. Management intends to divert up to 3% of profit margin into investing for future growth. I think the market’s response is myopic!
G A Chester has no position in Sage.
Matthew Dumigan: AO World
After a stellar first half financial performance, AO World (LSE: AO.) shares slid towards the end of November as investors cashed in some profits after a strong run. In the sixth months ending 30 September, revenues rose by a whopping 53% to £717m, with the company making an impressive pre-tax profit of £18.3m.
Company CEO John Roberts believes AO’s market has changed forever and I’m inclined to agree. The pandemic has exacerbated the shift towards the dominance of online retail and e-commerce, meaning that in my opinion, the company is well situated to profit from this long-term trend.
Matthew Dumigan does not own shares in AO World.
Royston Wild: Clipper Logistics
I already own shares in Clipper Logistics (LSE: CLG). But I’d happily buy more for my Stocks and Shares ISA before half-year results are unpacked on Thursday, December 3.
Clipper provides “value-added logistics solutions and e-fulfilment to the retail sector.” As a consequence its profits are booming as online shopping activity takes off. The UK share declared in mid-November that it had continued to enjoy “strong trading” since its financial year began in March. I’m expecting it to announce that business has remained robust at the start of the second half in that upcoming release.
Clipper’s share price has soared 70% since the start of 2020. And I think it’s just getting going as it steadily racks up new contracts with retailers and other organisations. It’s why I bought the stock for my own ISA back in August.
Royston Wild owns shares in Clipper Logistics.
Kevin Godbold: SSE
FTSE 100 energy company SSE (LSE: SSE) is a big player in renewable energy. And I reckon the strategy targets an accelerating macro trend. Recent progress in SSE’s 50:50 joint venture with Equinor towards building the Dogger Bank offshore wind farm is exciting because it will be “the largest in the world.”
SSE is also building Scotland’s largest offshore wind farm, Seagreen. And the company owns “the UK’s most productive onshore wind farm,” Viking.
Meanwhile, the forward-looking dividend yield for the year to March 2022 is 6%, which I see as good value given the firm’s forward prospects. I’d buy some shares in this top British stock in December and beyond.
Kevin Godbold has no position in SSE shares.
Roland Head: Morgan Sindall Group
I expect construction and infrastructure firm Morgan Sindall Group (LSE: MGNS) to do well in 2021. Broker forecasts suggest the group’s profits will return to 2019 levels in 2021, but the firm’s shares still trade well below the levels seen before the pandemic.
Another attraction of this business is that CEO John Morgan has a 9% shareholding in the firm. This should ensure his interests are aligned with those of shareholders.
Morgan Sindall stock currently trades on less than 10 times 2021 forecast earnings, with an expected dividend yield of 4.1%. I think the shares have further to go and continue to hold.
Roland Head owns shares of Morgan Sindall Group.
Paul Summers: Aviva
Market sentiment may improve further in December if (and that’s a sizeable ‘if’) we get news of promising coronavirus vaccines receiving regulatory approval. As such, I think shares in still-cheap-as-chips FTSE 100 insurance giant Aviva (LSE: AV) could offer a lot of potential upside.
Recent new business wins in the UK and North America should inspire confidence and the dividends are worth grabbing. Aviva now expects to return 21p per share in this financial year. That’s a stonking yield of 6.6% based on the current share price. Good luck trying to generate that kind of return from a Cash ISA!
Paul Summers has no position in Aviva.
Manika Premsingh: Ashtead Group
FTSE 100 multinational construction and rental equipment company Ashtead (LSE: AHT) has been on my investing radar because the US contributes a substantial part to its revenue. The US economy growth forecast is somewhat optimistic for 2021.
Moreover, fiscal stimulus to support infrastructure creation is also likely. These developments should hold AHT in good stead I think.
For now, we’ll know more about its present performance when it releases second quarter numbers in December. Its first quarter (ending July 31) numbers were quite resilient already. I reckon they would have improved from there, convincing me more that I should buy the stock. For this reason, I look forward to its update, making it my top British stock for December.
Manika Premsingh has no position in Ashtead.
Jonathan Smith: HSBC
HSBC (LSE: HSBA) has been a stock out of favour with many investors this year. As a result, a share price of around 400p represents a discount of 33% from where we started the year.
It’s my favoured stock of the month due to positive recent news. Q3 net profit came in $1.4bn, higher than the $882m expected. Provisions for doubtful debt have been reduced, and the company is even hopeful of paying a dividend of some form next year.
Add all of this together, and I think the business could be turning a corner from a difficult year.
Jonathan Smith has no position in HSBC.
Don’t miss our special stock presentation.
It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.
They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.
That’s why they’re referring to it as the FTSE’s ‘double agent’.
Because they believe it’s working both with the market… And against it.
To find out why we think you should add it to your portfolio today…
The Motley Fool UK has recommended Clipper Logistics, HSBC Holdings, and Sage Group. 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.