In my view, there will never be a better time to start investing than right now. And if I were starting an investment portfolio today, there are a few UK stocks I’d buy.
Investing
For me, investing is about giving myself the ability to make money that I don’t have to work for. I can’t work all the time (and I don’t want to).
Businesses, however, can do this. So by buying shares in a business, I can own something that will make money for me even when I’m not working.
According to its website, Coca Cola sells over 1.9bn servings of its drinks each day. That’s just under 22,000 every second of the day.
If I owned stock in Coca Cola, as Warren Buffett does, I’d have an asset that can make money for me 24 hours a day, 7 days a week, 365 days a year.
That’s what investing is about to me. It’s about owning assets that generate cash continuously without me having to work for it.
Consistent earners
The two stocks on my list are Greggs (LSE:GRG) and Premier Foods (LSE:PFD). I think that both of these are companies that can consistently make money for me.
Greggs is listed on the FTSE 100 and has fallen by more than 44% since the beginning of January.
The company makes and sells more than two million sausage rolls every week. That’s more than three every second.
I think that this qualifies it as a business that can earn money for me even when I’m too tired to work. So I’d buy the shares today if I were looking to start building an asset base.
Premier Foods is listed on the FTSE 250. Since the start of the year, the stock is down 15%.
A few years ago I wouldn’t have gone anywhere near this stock. Its debt was too high and the company wasn’t in a good financial position.
Today, though, things look quite different. Total debt has reduced from £498m in 2019, to £339 today.
As a result, I would buy shares in Premier Foods if I were starting to invest today. The company produces packaged foods that have been popular with customers recently.
Economic conditions
In my view, Greggs and Premier Foods both can fare well in a recession. Their products are cheap and I think that this means that demand will remain steady even as household budgets come under pressure.
The risk with these companies comes from inflation. Having a low price point to customers means that neither Greggs nor Premier Foods has much scope to pass on higher input costs.
I think, however, that both businesses are demonstrating a degree of resilience. Both are maintaining operating margins above 10%, which I think is good for these types of businesses.
The macroeconomic situation in the UK will influence how well these businesses do. But if I were starting to invest in companies that can generate money for me consistently, I’d buy these UK stocks.
