So far, 2020 has been a turbulent year for investors. The coronavirus crisis has had a significant impact on the global economy, and many UK shares are still trading below the level at which they began the year.
However, growth is expected to return in 2021. And with that in mind, I think now could be an excellent time for long-term investors to snap up a basket of cheap blue-chip stocks. Here are two companies I’d consider buying today.
UK shares to buy right now
The coronavirus crisis has had a significant impact on luxury retailer Burberry (LSE: BRBY). The group was forced to close the majority of its stores at the height of the pandemic, and sales slumped as a result.
The company could also continue to struggle in the near term. In an economic downturn, sales of luxury goods and services tend to decline. Nevertheless, Burberry’s most significant advantage is its brand. The group’s worldwide brand recognition, coupled with its global footprint, suggests to me the business is one of the best UK shares to buy to profit from the global economic recovery.
What’s more, Burberry’s strong balance sheet and robust profit margins should help the business weather the storm in the near term. As such, I think this stock could be worth buying as part of a diversified basket of cheap UK shares. It could rise in value significantly as the global economic recovery starts to gain traction.
InterContinental Hotels
The crisis has also severely impacted InterContinental Hotels (LSE: IHG). Lockdowns forced the company’s hotels around the world to close, and they’re only just starting to reopen. It could be some time before occupancy returns to pre-Covid levels.
This suggests the company faces a lot of near-term uncertainty. Still, as one of the largest hotel companies in the world, I think InterContinental can make it through this uncertainty. It’s also well-positioned to profit from an economic recovery on the other side as global travel resumes.
A healthy balance sheet and global diversification only add to my belief that this business is one of the best UK shares to own for 2021.
There has also been some speculation that InterContinental may merge with its European peer, Accor, as it tries to recover from the crisis.
Such a deal would catapult the enlarged company to the top of the hotel industry. It would be the largest operator of hotels in the world. This could be a huge positive for investors. By combining, the two groups would be able to lower costs through economies of scale and increase their appeal to potential franchisees. That may also mean more substantial returns for investors.
InterContinental has returned a considerable amount of cash to investors in the past with special dividends. I expect this trend to continue when sales return to 2019 levels, even if the company doesn’t merge with Accor.