Trying to find the best UK shares to buy can be a daunting process. There are thousands of stocks to choose from on the market.
However, there are a couple of businesses that stand out as being well run, with internationally diversified operations and large profit margins.
While some of these UK shares are currently struggling, their long-term outlook is exciting. As such, now could be a great time to snap up a share of these stocks for the long haul while they’re trading at a depressed level.
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UK shares on offer
GlaxoSmithKline may be one of the most underappreciated UK shares. The company is one of the largest pharmaceutical businesses in the world. It’s a global leader in the production of vaccines, HIV treatments and consumer healthcare products.
But despite these advantages, investor sentiment towards the business seems depressed. It’s trading at a discount of around 25% to the rest of the global pharma sector. With a dividend yield of 5.2% on offer as well, investors who buy the stock today may see high total returns in the long run.
UK shares Aviva and ITV also look cheap at the time of writing.
Shares in ITV have fallen by around 50% over the past few months. Investor sentiment towards the broadcaster has plunged as advertisers have pulled revenue in the coronavirus pandemic.
Still, the latest trading update from the group was positive, with the company reporting an improvement in operating conditions in July. It could be worth buying the undervalued business as a play on the UK economic recovery.
Meanwhile, Aviva has recently become one of the few UK shares to restore its dividend. Like ITV, the stock also looks cheap. It’s selling at a price-to-book value of just 0.6, which implies the stock offers a wide margin of safety at current levels. The resumption of the dividend will also provide investors with a steady income stream as growth returns.
Defensive investment
For investors looking for defensive UK shares, National Grid could be a good option. The pandemic has impacted the utility business, but its position in the industry has shielded it from the worst.
The demand for electricity is unlikely to fall in the UK over the next few decades. Therefore this business, which operates the majority of the country’s grid infrastructure, should continue to see rising profits.
Finally, if you’re looking for the best UK shares to buy today, Unilever certainly deserves a closer look. The international consumer goods giant has been able to ride out the pandemic with relative ease.
Sales have been steady as rising demand for cleaning products has offset declines in other areas. This trend seems likely to continue. As well as sales growth, the company also offers a 3%+ dividend yield. That seems highly attractive in the current interest rate environment.
