With the FTSE 100 and the FTSE 250 largely trading sideways last month, I think March looks like a really good time to invest in UK stocks. I have a couple on my radar.
Both are shares that I’ve been buying for my portfolio recently. But prices staying at attractive levels means an opportunity to keep adding to my investments.
J.D. Wetherspoon
Top of my list is J.D. Wetherspoon (LSE:JDW). The stock fell almost 5% in February, which caused me to buy it, and the next few months looks like an interesting time for the business and the sector.
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The UK Budget is on the way this month and it could be a significant one for the hospitality industry. But I think Wetherspoon’s might fare better than the rest of the sector.
Across the sector, one of the biggest expenses is staffing. A rising national living wage is increasing costs and putting pressure on margins.
This is a risk for Wetherspoon’s. But there’s an important reason I think it’s likely to be able to handle this better than its rivals.
Wetherspoon’s is known for its value to customers. And despite a recent set of increases, the gap between the company and its competitors in terms of prices seems to be widening over time.
That means the firm has scope to offset higher costs without compromising its low-cost status. I think there’s an enduring advantage here, which is why I’m looking to buy the stock in March.
Primary Health Properties
Shares in Primary Health Properties (LSE:PHP) declined almost 8% last month. As a result, the dividend yield is above 7%, which has me looking seriously at it as a passive income opportunity.
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The company is a real estate investment trust (REIT). I think that means its falling share price is more of a risk than it would be for a different type of business.
In general, REITs can have significant debt that needs paying off over time. And a requirement to distribute their cash as dividends can make this a challenge.
One way of raising cash to repay loans is by raising equity, but this is less effective when a company’s share price is low. So a low share price is actually a nuisance for Primary Health Properties.
On average, though, the firm’s loans still have some way to go before they come due and I expect lower interest rates to make refinancing viable before then. This makes me think the risk is limited.
A stabilising property market should also help boost the value of the firm’s assets, helping its debt situation. That’s why I see the share price as an opportunity in a stable dividend stock.
More of the same
At the start of March, the stocks I’m looking to buy for my portfolio are largely the same ones I had my eye on in February. Not much has happened to change my view of things.
With both J.D. Wetherspoon and Primary Health Properties, share prices have come down slightly. To me, though, that just means better opportunities to buy stocks I’d like to own for the long term.
