Investment in the stock market is always a risky business. The value of your shares can go up or down, and you can never be sure about the market’s future. However, certain UK stocks have been doing well in recent years and are expected to continue to do well in the future.
If you’re wondering about investing in the UK stock market, you have come to the right place. This post will tell you about the 10 best stocks to buy now in the UK.
However, before we suggest specific UK shares to buy, it’s essential to know how you should evaluate and find the top-performing stocks. There are specific indicators and elements that you need to keep in mind, including both fundamental and technical ones.
While it is impossible to predict a stock price or trend accurately, analysis and background research will help you make an informed investment decision. Keeping that in mind, we will also provide relevant information regarding our top 10 best stocks to buy now in the UK.
Table of Contents
How Should You Pick the Top 10 UK Shares to Buy?
Top industry analysts combine two techniques when they assess any stock performance – Fundamental Analysis and Technical Analysis.
Fundamental analysis tells you about a company’s financials from both quantitative and qualitative perspectives. The analysts look into various aspects of the company, including its earning power, profitability, solvency, and growth prospects. They also compare the company’s financials with its competitors.
Remember that share prices can be influenced by other factors, such as global economic conditions, company news, etc.
Some factors and indicators which you should consider when doing fundamental analysis are as follows:
- Financial ratios
There are quite a few financial ratios you should consider while doing a fundamental analysis of a company. The most important ones are:
- Price to earnings (P/E) ratio
- Earnings per share (EPS)
- Price to book (P/B) ratio
- Return on equity (ROE)
Make sure you compare the financial ratios with the same industry, relevant industry, and key competitors. In some cases, you may also compare them with the index the company belongs to.
- History and management
The management of the company and its history are two fundamental aspects you must look into. You need to find out how the company has been performing in the past and how its management has handled different situations. A robust and dynamic management can help a company navigate difficult business situations.
A company’s earnings give you an insight into its profitability and prospects. Look for companies that have been reporting consistent growth in their earnings.
- Products and services
You need to ensure that the products and services are in demand and that the company has a competitive edge.
Look at their ongoing projects and R&D activities to determine whether the company’s products and services align with the future business climate.
- Competitive position in the industry
You should also look at the company’s position in its respective industry. Is it a market leader or a laggard? A market leader usually has a first-mover advantage, which gives it an edge over its competitors. A business needs to outplay the competition either in terms of quality or in terms of price.
- Share price performance
This is where technical analysis comes in. Look at the company’s share price performance over the past year or two. Look for companies that have shown consistent growth in their share prices. This indicates that the company is doing well and is expected to do well in the future.
To understand and evaluate share price performance further, proceed to technical analysis.
Technical analysis is the study of past market data to identify trends and predict future market behaviour. Technical analysts believe that the collective actions of all the participants in the market, such as buyers and sellers, influence the market’s direction.
Technical analysis includes the following factors and indicators:
- Support and resistance levels
A support level is the price level at which demand is thought to be strong enough to prevent the price from falling further. This is because buyers become more willing to buy the stock as the price falls, and this increased buying activity prevents the price from falling below a certain level.
A resistance level is the opposite of a support level. The price level at which selling is thought to be strong enough to prevent the price from rising further. This is because sellers become more willing to sell the stock as the price rises, and this increased selling activity prevents the price from rising above a certain level.
- Trend lines
A trend line is a straight line that connects two or more price points on a chart. Trend lines identify whether a stock is in an uptrend or a downtrend. Uptrends are defined as a series of higher highs and higher lows. Conversely, downtrends are defined as a series of lower highs and lower lows.
- Moving averages
A moving average is used to smooth out price action and to identify the direction of the underlying trend. Moving averages are calculated by taking the average of a given set of prices over a certain period of time. The most common time periods are 10, 20, 50, 100, and 200 days.
- Candlestick patterns
Candlestick patterns are used to identify potential reversals in the market. The most common candlestick patterns are the hammer, the inverted hammer, the shooting star, and the doji.
As technical analysis requires solid in-depth technical understanding, it is often a good idea to follow analysts’s ratings of buy, sell or hold signals.
Should You Follow Analysts’ Rating?
Some people believe that analysts are biassed as they work for banks or other financial institutions that could benefit from people buying or selling a particular stock. However, analysts’ ratings actually matter and are often quite accurate.
When considering analysts rating, keep a few things in mind:
- The rating system is usually based on a scale of 1-5, with 1 being a strong buy and 5 being a strong sell.
- Analysts’ rating does not guarantee any specific price or trend. It can only serve you as an estimation.
- If most of the analysts rate a particular stock as a buy or hold, then it is likely that the stock is a good investment.
- However, if there is a wide range of ratings for the same stock, then it is best to do your own research before making a decision.
Some excellent sources of analysts’ ratings where you can get updated recommendations on UK shares to buy include investing.com, Motley Fool, Capital.com, and HL.
Top 10 Best Stocks To Buy Now UK
We have researched extensively based on fundamental and technical analysis to recommend the best stocks to buy now in the UK. We have included several industries in our list to help you diversify your portfolio and mitigate risks.
|Company Name||LSE Code||Industry||Market Cap||P/E Ratio||Analysts’ Rating||Indices|
|Shell plc||SHEL||Oil & Gas||£167.5 billion||5.91||Buy||FTSE 100|
|Bridgepoint Group||BPTB||Manufacturing||£2.46 billion||32.55||Strong Buy||FTSE 100|
|AstraZeneca||AZN||Medical||£161.40 billion||-159.09||Buy||FTSE 100|
|Barclays plc||BARC||Finance||£26.65 billion||5.62||Hold||FTSE 250|
|BP plc||BP||Oil & Gas||£82 billion||-8.76||Strong Buy||FTSE 100|
|Avast plc||AVST||Information Technology||£7.54 billion||31.34||Buy||FTSE 100|
|BAE Systems plc||BAES||Industrials||£24.29 billion||17.58||Strong Buy||FTSE 250|
|British American Tobacco plc||BATS||Tobacco||£78.05 billion||14.63||Strong Buy||FTSE 350|
|Reckitt Benckiser Group plc||RKT||Household Products||£46.43 billion||15.05||Strong Buy||FTSE 100|
|FRASERS plc||FRAS||Specialty Retail||£3.73 billion||13.54||Buy||FTSE 250|
Shell plc, a British-Dutch oil and gas company has over 110 years of rich business experience globally. Headquartered in London, Shell is listed in stock exchanges of the UK, the USA and Europe.
Product and services:
- Upstream: Extraction of natural gas, natural gas liquids, and crude oil.
- Integrated gas: Production of Liquefied Natural Gas (LNG), Gas to Liquids (GTL)
- New energies: Production of hydrogen, renewable energies (solar and wind). Exploring decarbonization options.
- Downstream: 46,000 retail sites to serve over 32 million customers. Distribution of natural gas resources, biofuels, lubricants, bitumen, sulphur and various petrochemicals.
- Earnings reported: Shell has reported that they surpassed the forecasted earnings during the second quarter of 2022.
- Natural gas price: Natural gas prices have been rising for several months due to the Russia-Ukraine war, which may affect Shell’s revenue.
- Environmental sustainability: Shell recently announced that they aim to become a net-zero emission business by 2050.
Considering Shell’s continued innovation and focus on green energy and global sustained energy demands, we believe Shell is one of the best UK shares to buy.
Bridgepoint Group plc
Bridgepoint Group is a British multinational private equity firm. It is one of the largest private equity firms in Europe, with over £28 billion of funds under management. The pension fund is the largest portion of Bridgepoint’s managed fund at 54%.
Product and services:
- Bridgepoint Europe VI
- BDC IV
- Bridgepoint Growth I
- Bridgepoint Syndicated Debt
- Bridgepoint Direct Lending
- Bridgepoint Credit Opportunities
- Partnership: Bridgepoint has partnered with Analysis Mason, a top global management consultancy firm, to work together for business development and growth.
- Majority stakes: Bridgepoint has acquired majority stakes of the Inspired Thinking Group (ITG), a high-tech business activation consultant with over 1,000 employees globally.
- Exit deal: Bridgepoint signed a £1.7 billion exit deal with BlackFin Capital Partners to exit the investment project in Groupe CIR, a French real-estate financing company.
Bridgepoint has been making innovations to their funding portfolio. Based on our fundamental and technical analysis, we can tell that BPTB is one of the best UK shares to buy now.
Tremendous success with the Covid-19 vaccination project has made AstraZeneca, a research-based biopharmaceutical company, a global household name. It is now one of the world’s largest pharmaceutical companies and one of the UK’s top 10 companies.
Product and services:
- Cardiovascular, Renal, and Metabolism
- Respiratory and immunology
- Rare diseases
- Miscellaneous: autoimmunity, infection, vaccines, neuroscience gastroenterology.
- Pipeline: AstraZeneca currently has 184 active projects in their pipelines with 17 new molecular entities and three entities under review.
- Changed focus: AstraZeneca has reported that from now on they will emphasise more oncology, cardiovascular and renal metabolism, respiratory and immunology, as those segments have been showing a rising demand for pharmaceutical products compared to other areas.
- FDA approval: AstraZeneca has received FDA approval for Infinzi combo as a medication for biliary tract cancer.
AstraZeneca has been progressing well to carry their success of Covid-19 vaccines to other programs, making it one of the top shares to buy now in the UK.
Barclays plc is a British multinational bank, one of the world’s largest banks with over 20 million clients personal banking and card services. The client base includes over a million business banking clients and entrepreneurs.
Product and services:
- Personal banking
- Premier banking (for high-value clients)
- Business banking
- Corporate banking
- Wealth management
Individual services include digital banking, borrowing, insurance, credit cards, savings, and investments.
- Leadership renovation: Barclays has boarded the former head of sustainable finances of Standard Chartered as their new global head of sustainable finance.
- Successful exit: Barclays has sold off their 7.4% stake in Absa, a lender from South Africa, and gained £538 million as proceeds.
- Oil price prediction: Barclays has updated their price forecast for Brent crude oil as they foresee a Brent surplus due to Russian supplies.
Considering the solid industry reputation of Barclays plc, it is one of the good UK shares to buy.
BP plc is a British multinational oil and gas company and one of the world’s seven oil and gas “supermajors”. BP has been working hard to make the UK energy-independent by increasing home-grown energy production and efficiency.
Product and services:
BP’s current product line-up includes air fuel, bioenergy, global energy trading, mid-market partnership business, marine, shipping, solar warranty, target neutral renovations, retail brands (ampm), gas stations (Aral), lubricants, fuel cards, and credit cards.
- New operation: BP has 50:50 JV partnerships with Angola’s Azule Energy, which has started oil and gas production.
- Rebranding: BP has announced rebranding and expansion for its EV charging station business AMPLY Power to bp Pulse.
- New investment: BP has announced £50 million of new investment for R&D in the UK to improve battery technology.
BP’s sustainable business practices have made it one of the best UK sharey.
Avast plc is a British multinational cybersecurity software company, the world’s largest cybersecurity business with over 435 million global users.
Product and services:
- Home users: Security, privacy, and performance products
- Business users: Home office, small business, patch management, cloud backup, remote control, and Linux antivirus
- Partners: Mobile security, VPN, threat intelligence
- Digital trust: Avast has expressed its commitment to work toward establishing industry standards for global-scale digital trust.
- Product update: Avast has revamped its flagship product, Avast One, to handle next-gen online scams.
- Acquisition: Avast has acquired SecureKey to strengthen its online security services portfolio further.
Avast is among the top 10 UK stocks to buy, considering the sustained demand for online security products in the coming years.
BAE Systems plc
BAE Systems plc specialises in defence, security, and aerospace technology. They focus on improving the security of national, infrastructure, and business properties.
Product and services:
- Military radio system
- Armoured MPV
- Data Link
- Machine Gun System
- Naval guns
- Electric bus and vehicles
- Aircraft electrification
- Combat ship
- Doppler radars
- Flight control and navigation systems
- Operational update: BAE Systems has started working with the US Navy to manufacture network tactical common data links.
- Awards: BAE Systems has won the CATV competition of the US Navy and received a contract worth £240 million.
- Financial update: BAE Systems has reported a 2.8% increased sales volume in the first half-yearly report of 2022.
Close collaboration with the US armed forces and continuous R&D have made BAE Systems one of the top UK stocks.
British American Tobacco plc
British American Tobacco (BAT) plc is a leading UK-based global consumer goods manufacturer with a great emphasis on tobacco products. They have also been producing vapour-based electronic cigarettes for several years, which do not create any smoke.
Product and services:
- Tobacco heating
- Modern Oral
- Traditional Oral
- Combustible tobacco
- Partnership: BAT has announced a partnership with McLaren to promote new technologies and innovations in business.
- Solid revenue: BAT has surpassed analysts’ forecasted revenue in the second quarter of 2022. The share saw a jump of 26.18% from its value at the year’s beginning.
- Russian exit: BAT has announced its planned exit from Russia in support of the economic sanction imposed by the EU and the UK government.
Given its business fundamentals, BAT is one of the top UK shares to consider.
Reckitt Benckiser Group plc
Reckitt Benckiser Group plc is a global household name for consumer products. The British multinational company has over 50,000 employees globally.
Product and services:
Reckitt’s most popular brands are Clearasil, Enfa, Finish, Lysol, Veet, Dettol, Air Wick, Durex, Calgon, Mortein, Nurofen, Strepsils, Vanish, Harpic, Airborne, Move Free, Neuriva. The company primarily focuses on hygiene, health, and nutrition products.
- Financials: Reckitt reported a 4.4% increase in net sales during the first half of 2022, resulting in a 25.2% increase in total EPS. The company forecasts 5-8% revenue growth for 2022.
- Social program: Reckitt has launched its Fight for Access Accelerator program to support social enterprises globally.
- Scaling up import: Reckitt has announced that they will scale up an import through air freight to meet increased demand for formula globally.
Reckitt has been one of the few global companies that have been successful during the difficult Covid-19 years. Their strong fundamentals and high-in-demand product line up has made them a top choice as UK share.
FRASERS plc is a top UK-based sporting goods retailer maintaining a diversified portfolio of lifestyle, sports, and lifestyle products in over 20 countries globally. They have distribution centres, retail stores, and eCommerce websites throughout the US, Europe, and Asia.
Product and services:
Some of the ruptured Frasers brands are 18montrose, Evans Cycles, Flannels, Frasers, Game, House of Fraser, Jack Wills, Sofa.com, Sports Direct, and USC.
- Acquisition: Frasers has acquired I Saw It First, a popular online fashion retailer that has served over 5 million customers since 2017.
- New leadership: Fraser has announced a change in its top leadership position, and the board of directors has unanimously agreed upon an executive bonus scheme for the new CEO.
- Profit in difficult times: Fraser reported £377.8 million in operating profits during 2021 despite a difficult business climate due to Covid-19 and subsequent lockdowns in major cities.
Industry analysts forecast rising demand for fashion apparel in the post-Covid time, which is good news for Frasers plc.
What are the best stocks to buy now UK?
The top stocks vary depending on the industry. Typically, you should always invest in companies with great fundamentals and solid business history. Some of the best shares to buy now UK include Shell, AstraZeneca, Barclays, BP, and Reckitt Benckiser.
What is a good company to invest in in the UK?
Some good companies to invest in the UK include Royal Dutch Shell, AstraZeneca, Barclays, British American Tobacco, Avast, BP, and Reckitt Benckiser.
What should I consider before buying UK shares?
Before buying shares, you should always consider the company's fundamentals and business history. In addition, you should also keep an eye on the company's share price and whether it is undervalued or overvalued.
What stocks will go up in 2022?
It is difficult to predict which stocks will go up in the future. However, some stocks that are expected to do well in the future include Royal Dutch Shell, AstraZeneca, Barclays, British American Tobacco, and Reckitt Benckiser.
What are the safest stocks to invest in?
There is no such thing as a "safe" stock. All stocks are risky, and the value of your shares can go up or down. However, some stocks are less risky than others. For example, shares of large companies with solid fundamentals and a long history of profitability are typically less risky than shares of small companies with no history of profitability.