I often wonder what other people think are the best UK shares to buy right now. So I’ve been casting around to see what folks like the look of at the moment, and it brings up some common themes.
BP figures high in many lists. Investors once saw BP as a top long-term dividend payer. Through all sorts of crises, the dividend didn’t flinch. But the 2020 oil price crash, after the Covid-19 pandemic shut down so much business, was too much. BP slashed its dividend by 35%.
The shares fell heavily, and we’ve seen little sign of recovery. We’re looking at a 43% loss over the past two years, a period in which the FTSE 100 dropped just 2.5%. BP did choose to announce its net-zero plans during the 2020 crash, and that’s awakened investors to what a post-carbon BP might look like. Is it one of the best UK shares to buy now? It might be, but I also rate it as very risky — something I would never have said about it five years ago.
All set for recovery?
Rolls-Royce figures in a lot of lists. We’re looking at an even worse performance from Rolls than from BP. The Rolls-Royce share price is down 66% over the past two years. And, like BP, it’s not all due to the pandemic. No, Rolls’ shares were in a decline from the middle of 2018.
The grounding of the world’s aeroplane fleets is the big problem now. It means greatly reduced maintenance demand, and a big hit to Rolls-Royce’s income. But there’s surely a good company behind the current troubles, and it must be on for a good recovery, mustn’t it? The thing keeping it off my personal best UK shares list is the risk of Rolls running short of cash and having to hit up the markets again.
Always among my best UK shares?
I’m seeing a few analysts tipping housebuilder shares for 2021 and beyond. Specifically, Taylor Wimpey and Barratt Developments are getting the nod, and I like both. Both were climbing before the pandemic arrived, but both were hit hard. Yet after recoveries, Taylor Wimpey is about level over two years, with Barratt up 32%. I own Persimmon, which has done even better with a 55% gain.
The risk here is that we really have no idea what our post-Brexit housing market will look like. Yes, remember Brexit, that big bad thing that was overshadowed by the bigger badder thing called Covid? Still, I reckon our chronic housing shortage puts housebuilders among my best UK shares for the long haul. They can be volatile in the short term, mind.
One possibility, one bargepole
Cineworld and Argo Blockchain are attracting attention too. Cineworld has finally opened its doors again to paying customers after a lengthy shutdown. I see a possible recovery, but I’ll want to see how things go before I decide whether I might want to buy. And as for Argo, it might fly, it might crash. But no cryptocurrency company is ever going to make it onto my list of the best UK shares.