Some UK shares on the FTSE stand out to me as no-brainer buys for my holdings. I have identified two picks I would add to my portfolio right now with as little as £100 to invest.
UK share #1
Evraz (LSE:EVR) is one of the largest steel producers in the world. Since reopening, the demand for steel has outstripped supply.
As I write, Evraz shares are trading for 559p. At this time last year, shares were trading for 519p, which is a 7% return over a 12-month period. This UK share is best known for its monster dividend yield. Evraz shares currently yield over 15%! Sometimes, a rapidly falling share price can push up a dividend yield, however, this is not the case for Evraz.
Evraz’s recently released Q3 trading update showed a slow down in production on most fronts compared to Q2 but this is not a worry for me. Global supply chain issues as well as the fact supply cannot meet demand right now, which is generally good news for Evraz and its share price, account for this dip. Half-year results released in August were excellent, however.
The skyrocketing demand for steel has helped boost Evraz. If supply and demand converge, this could affect Evraz’s performance. Evraz doesn’t control the price of the commodities it mines and produces. This is controlled by the market and other geopolitical factors. Any volatility could affect performance.
Overall, Evraz is a no-brainer UK share for me that I would add to my holdings right now for three reasons. It is a powerhouse in its market, with a diversified range of operations, not just steel. It consistently pays a handsome dividend to make me a passive income. Finally, it has a consistent record of performance too.
Pick #2
My next pick is BP (LSE:BP). It is among the seven largest oil and gas companies in the world. Having a prominent oil and gas UK share in my portfolio is a no brainer as global economies run on energy stocks such as these.
As I write, shares in BP are trading for 387p per share, whereas at this time last year, they were trading for 293p. A 32% return over 12 months is excellent.
As the world economy reopened, demand for oil and gas, especially the former, has increased exponentially. The price of oil is currently at seven-year highs. This can only be beneficial for BP. The shares are on an upward trajectory right now and look cheap to me with a current price-to-earnings ratio of just 16.
BP has an above average dividend yield of over 4% and has a decent track record of performance. More importantly, BP is investing in the future and keeping up with the changing world. It is expanding its green energy production.
The pandemic is a major risk to BP and its shares in my opinion. Energy prices fluctuated, mainly downwards with few positive upward spikes, when restrictions were in force. If this were to occur again, financials, performance, and shares could be negatively affected.
I would buy BP shares for my holdings at current levels. The new green energy initiative, current oil prices, and healthy fundamentals including a solid balance sheet make it an attractive UK share for my portfolio.