A stock market crash is the ideal opportunity to go shopping for the best UK shares you can find. If you are looking to build a million-pound portfolio of shares, you need to use moments like these to pick up dirt-cheap bargain stocks.
Plenty of top FTSE 100 stocks are now available at reduced prices. But which are the best UK shares to buy today?
A handful of companies did well in the FTSE 100 crash, for example, food delivery specialist Ocado Group. With the nation locked in at home, grocery firms kept us fed. We’d starve without them. Tesco and Morrisons also held up.
I am wary of the big grocers though. They work to wafer-thin margins and face stiff competition from Aldi and Lidl. Ocado is expensive. It is priced for rapid growth and any slip-up would cost investors dear.
I’d say these are some of the best UK shares
FTSE 100 pharmaceutical companies AstraZeneca and GlaxoSmithKline suit me better. If I was investing to make a million, I would include at least one of them. Right now, that would be Glaxo. AstraZeneca looks expensive at 25 times earnings.
My list of best UK shares would also include an income-paying utility stock. National Grid currently yields 5.07% and is down around 12% on its pre-crisis high. I would also consider asset manager Standard Life Aberdeen, which currently yields more than 8%, and looks after its shareholders. It is one of the best UK stocks for income right now. As is Legal & General Group. It rejected pressure to dump its dividend as rival Aviva has done, and now yields more than 8%.
FTSE 100 bargains galore
So what is the best UK stock for those wanting growth as well as income? I’d start with household goods giant Unilever. After years of share price growth, it is down 7% over 12 months. You can now buy it for less than 20 times earnings, a bargain entry point.
Educational publisher Pearson and events specialist Informa are two FTSE 100 stocks flying under the radar right now. Both are bouncing back from the March slump, so you may still have a buying opportunity. Drinks giant Diageo would be on my list of the best UK shares at any time.
If you are happy to take on a bit more risk, I would consider stocks that took a big hit in the crisis. I’m thinking Cineworld Group and easyJet. Personally, I’d be more wary about cruise operator Carnival. I think that corner of the travel industry faces a rough passage to respectability.
These FTSE 100 stocks will not make you a millionaire overnight. You cannot do that on the stock market anyway. The way to get rich and retire early is to gradually build a balanced portfolio of the best UK shares. Hold them for the long term and keep reinvesting your dividends for growth. You can make that million, if you give it time.