If greener pastures for global markets are around the corner, I want to prepare now. Could these be great stocks to buy for returns and growth in the long term? Let’s take a look.
Construction equipment rental
FTSE 100 giant Ashtead (LSE: AHT) has risen from a humble penny stock to a mammoth beast with a deserving place on the UK’s premier index, in my opinion.
However, a couple of weeks ago, a profit warning caused the shares to dip. At present, the shares are trading for 5,076p, which is a 4% rise over a 12-month period. They were trading for 4,870p at this time last year.
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Ashtead shares look good value for money on a price-to-earnings ratio of 15 currently. This may not be the cheapest. However, when thinking of future growth prospects as well its market position and reach, I reckon there’s an opportunity here.
Construction is a key component for governments to boost economies. Plus, as the global population increases, infrastructure spending should increase too. A new infrastructure bill in the US – Ashtead’s key market – could help take the shares to new heights in the longer term.
The biggest risk for Ashtead is continued volatility and external events such as the Hollywood writers strike dampening demand for its products. These types of issues can hurt performance and payouts.
I’d be willing to buy some Ashtead shares if I had some spare cash to invest.
House builder
My next pick is Taylor Wimpey (LSE: TW.). The house building market has been struggling this year due to macroeconomic events. Soaring costs have made it costlier to build and impacted completions. Plus, higher interest rates have made mortgages less obtainable, therefore sales have slowed. I’ll keep an eye on both these aspects as ongoing risks.
Despite issues, Taylor shares are up 34% over a 12-month period from 102p at this time last year to current levels of 137p.
From a bullish aspect, the housing market in general should help Taylor shares soar when macroeconomic issues subside. Data shows demand for housing is outstripping supply. Plus, the shares look good value for money on a price-to-earnings ratio of eight. Furthermore, a dividend yield of 7% makes the shares appear a great passive income play. However, dividends are never guaranteed.
I’d also be willing to buy Taylor shares for my holdings when I can.
Properties for healthcare
My final pick is Primary Health Properties (LSE: PHP). Set up as a real estate investment trust (REIT) the business must return 90% of its profit to shareholders that it makes from rental income.
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The shares have dipped 11% over a year. Currently trading for 97p, they were trading for 107p at this time last year.
Demand for healthcare in the UK is at all-time highs as migration increases and the general population is ageing. This should help the firm’s performance grow and increase payouts.
One risk to consider – as well as the reason I reckon the shares have fallen – is higher interest rates have hindered the property market. With borrowing costs higher, growth could be trickier for Primary, at least in the shorter term.
An enticing passive income opportunity with a dividend yield close to 7% is a good reason for me to plan buying more shares when I next can.
