Over the last 12 months of trading, the UK market has witnessed several large crashes. But, the FTSE 100 index is setting higher highs with every rebound and is currently hovering around the 7,500-mark. I see a nice upward trajectory despite recession warnings. And big global investors are better prepared to ride volatile markets than they were two years ago.
All this has put me on the lookout for some outstanding UK shares to buy on their way up. With £1,000 to invest in June, here are two companies I have identified for my portfolio showing signs of explosive growth over the next decade.
Top UK share to buy in the energy sector
Multinational energy firm SSE (LSE:SSE) has been on a solid run in the market. Since the Russian invasion of Ukraine, renewable energy sources in the EU have gained significant prominence. And the SSE share price has jumped nearly 20% since. One-year returns stand at 16.8% and the share has gone up nearly 10% in 2022 alone.
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After the recently released results, I think this UK share looks very attractive. For the financial year 2021-22 (ended 31 March 2022), the company recorded a 23% jump to £1.16bn in pre-tax profits from the year before. This jump allowed the board to roll out a £12.5bn investment plan to grow offshore wind assets by 2026.
SSE’s full-year dividend stands at 85.6p per share, which brings the current yield to 4.7%. And given the growing retail price of energy, the board expects a 5% year-on-year dividend until 2026.
While these are great indicators of financial strength, there are a few concerns to address as well. The company has a net debt of £8.59bn, which could affect future revenue. Also, given the increased interest in the field, better alternatives could become prominent over the next decade, which could force a restructure.
However, the energy sector is growing fast. And SSE’s impressive recent financials and above-average yield makes it one of the top UK shares to buy right now for my long-term growth portfolio. I’d be tempted to make a £1,000 investment if the share price falls below 1,750p in June.
Global consumer goods giant
Unilever (LSE:ULVR) is a fast-moving consumer goods company present in over 100 countries with 400 popular brands in its portfolio.
With a turnover of over €1bn in 2021, the company retained a lot of the customers it gained during the pandemic-driven hygiene products boom. Customer surveys show that the demand for anti-bacterial cleaning products will remain high across the next decade. The average consumer cares a lot more about personal hygiene after the pandemic, which is great news for Unilever.
Its significant debt of €25.5bn is a concern. And given the inflationary pressure in the UK right now, profit margins could take a hit affecting future revenue. But I think the company has a robust supply chain, product demand and pricing power to overcome this. And given the current volatile market conditions, I think my portfolio is screaming for a fundamentally strong company with a global presence right now. If Unilever’s share price falls below 3,500p, I would happily make a £1,000 investment this year.
