Following the recent stock market crash, I’ve been searching for the best shares to buy now for the next decade.
Research shows that buying stocks when they’re trading at low levels is the best way to generate high returns in the long run. That’s why I’ve been using the market decline to snap up bargains.
However, I don’t think that buying any old shares is a good strategy. Some stocks look cheap because they deserve to be. Many businesses that look cheap today had problems before the pandemic struck. It’s likely these problems will hold back their recovery in the long run.
BT is a good example. Before the crisis, the company was struggling with a weak balance sheet, high costs and increasing competition. These problems haven’t gone away.
On the other hand, some stocks are trading at depressed levels despite reporting an improved trading performance over the past 12 months. I think these are the best shares to buy now.
The best shares to buy now?
For example, I’ve been taking a closer look at banking giant Barclays over the past few months. The pandemic has impacted this banking group. Loan losses jumped significantly in the first half of the year. The good news is, it looks as if these losses have now been contained.
At the same time, the firm’s investment bank has benefited from an increase in activity from companies looking to raise money and sell assets. This has helped offset some of the impacts of the pandemic. However, despite this strong fundamental performance, shares in the bank continue to trade significantly below the level at which they began the year. It’s for this reason the group features on my list of the best shares to buy now.
Cash is king
Another firm I’ve got my eye on is PayPoint. The pandemic has accelerated the demise of cash but, for many people, cash remains an essential tool. This is where PayPoint can help retailers and customers. It offers retailers access to its payments network, which allows them to process credit card transactions.
Also, PayPoint’s systems allow customers who use cash to top up and pay utility bills, which would usually require a direct debit or bank account. The company takes a tiny sliver of each transaction. These small payments all add up and generate large profits for the group.
Management has been returning the majority of cash generated from operations back to investors. At present, the stock supports a dividend yield of 8.5%. What’s more, the stock is trading 50% below the level at which it began the year. As the country continues to move away from cash, I think PayPoint could be one of the best shares to buy now for the long term.
These are just two of the firm’s I’m watching right now. I think both should benefit from significant tailwinds in the years ahead that will power growth.
