With the deadline approaching for this year’s ISA allowance, I’m on the hunt for some of the best –and cheapest — UK shares to buy.
Here are four top British stocks on my Stocks and Shares ISA shopping list today.
An intoxicating UK share
Broker forecasts for a UK share can be blown off course if trading conditions worsen. And for the likes of Stock Spirits Group the chances of this happening are a real possibility. If global Covid-19 cases continue rising and mass lockdowns stay in place, drinks sales at bars and restaurants will inevitably take a whack. But based on current estimates, I still think the beverages giant is too cheap to miss.
City analysts reckon earnings here will more than double in 2021, leaving Stock Spirits trading on a forward price-to-earnings growth (PEG) ratio of 0.2. Any reading below 1 can suggest that a stock is being undervalued. I particularly like this UK share as I think its focus on fast-growing European emerging markets should deliver long-term earnings growth.
7%+ dividend yields
An environment of low interest rates threatens the profitability of banks in the short-to-medium term. This hits profits as it reduces the difference between what they get from borrowers and offer to savers and Bank of Georgia isn’t exempt. But I’d still invest as I expect foreign investment in its country to balloon again once the Covid-19 crisis passes. Huge capital inflows have made the Eurasian nation one of the fastest-growing economies in the region over the past couple of decades.
At today’s prices, Bank of Georgia offers good value for money. City analysts think annual earnings will rise around three-quarters year on year in 2021, leaving it with a forward PEG ratio of just 0.1. The UK banking share sports a gigantic 7.4% dividend yield too.
A FTSE 100 firecracker
I think Vodafone Group is another great all-round share for value investors. City brokers reckon annual earnings here will rise by more than 30% in the next two fiscal years. This leaves the FTSE 100 firm dealing on a forward PEG multiple of 0.6. And the telecoms titan carries big dividend yields of 6.5% through the medium term.
I don’t think things will all be plain sailing for Vodafone though. The problem of rising competition and tough economic conditions in Europe could derail earnings estimates. Yet I’d still buy this UK share on its emerging markets exposure and its excellent progress on 5G.
Good to go
I believe that Bakkavor Group’s another tasty value stock at current prices. Not only does the food-to-go manufacturer boast a near-5% forward dividend yield. The City thinks annual profits here will rise 15% in 2021, resulting in a rock-bottom PEG ratio of 0.7.
The rise of homeworking following the Covid-19 crisis will inevitably affect growth rates across the food-to-go sector. The number of office workers and commuters seeking a quick bite looks set to fall. But I think that this UK food share should still have the strength to thrive, helped by steps to improve its footprint in the fast-growing US and Chinese markets. It recently opened three new factories in its Asian territory.