2 UK shares I’d buy for a retirement portfolio

When buying UK shares to serve her retirement, this Fool believes these two FTSE 100 giants could come in handy.

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Some UK shares look like no-brainer buys to help me build wealth and retire later in life. Two picks I’d love to buy when I next have some spare cash are Unilever (LSE: ULVR) and Taylor Wimpey (LSE: TW.).

Here’s why!

Consumer goods king

There’s a high likelihood you’ve used one of Unilever’s popular products across food, cleaning, and personal care products. For context, some of its brands include Comfort, CIF, Domestos, Ben & Jerrys, and more.

Should you invest £1,000 in Taylor Wimpey right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Taylor Wimpey made the list?

See the 6 stocks

With roots stretching back nearly 100 years, the business has grown into a giant, serving 190 countries and millions of consumers. It has an excellent track record of performance and shareholder return to fall back on. However, it’s worth noting that the past isn’t necessarily a guarantee of the future.

From a bearish view, the price tag that comes with Unilever’s premium branded goods is a concern. This is because during times of economic difficulty, consumers may move towards cheaper essential ranges to help conserve cash. This could dent performance and payouts, and something I’ll keep an eye on.

With such a storied track record, the business knows a thing or two about navigating tough times and emerging at the other side better off. What I currently like is the fact Unilever is now streamlining its brand portfolio. It’s decided to ditch lesser-performing brands, and invest more money into the ones serving it better. This could boost profitability and returns.

From a returns view, the shares offer a dividend yield of 3%. However, it’s worth remembering that dividends are never guaranteed. Nevertheless, I can see this level of return growing.

Overall, Unilever’s market power, vast presence, track record, and defensive ability through its varied product range make it an attractive prospect for me.

Building homes

Being one of the largest residential developers in the UK makes Taylor Wimpey look a great stock to help me build wealth.

The fact it builds houses offers it a certain amount of defensive ability. This is because everyone needs somewhere to live.

Despite this, when economic conditions are tricky, like now, due to higher interest rates and inflation, house builders can come under pressure. Mortgages are harder to come by for consumers, which impacts sales. Completions and profits come under pressure from inflation. So there are bearish aspects I’m aware of that could hurt Taylor’s performance and returns.

Speaking of returns, a dividend yield of close to 6% is significantly higher than the FTSE 100 average of 3.6%. Furthermore, the shares trade on a price-to-earnings ratio of 15, which isn’t the cheapest, but there’s room for the shares to grow, meaning the shares could become more expensive down the line.

Finally, Taylor Wimpey is in a great position to benefit from the housing imbalance in the UK. At present, demand is outstripping supply. The UK government recognises this, including the newly elected Labour government. Initiatives to boost house building could help Taylor’s performance and returns grow for many years to come.

Like buying £1 for 31p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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