Despite the stock market’s positive performance over the past few weeks, there are still plenty of cheap UK shares on offer for investors in the market.
Companies like the two profiled below could help investors grow their wealth and put them well on the way to making a million.
Cheap UK shares to buy
Legal & General Group (LSE: LGEN) is one of the top income investments in the FTSE 100. Shares in the financial services giant have risen steadily in value over the past few weeks. Despite this performance, the stock continues to look cheap.
As one of the world’s largest asset managers, Legal has been impacted by the coronavirus crisis. Nevertheless, of all the cheap UK shares, the stock may have been affected by the pandemic to a lesser degree. The corporation registered an impressive jump in new business during the first quarter of the year.
Management also came out to announce the company would be standing by its dividend commitments. This was highly impressive, considering the backdrop the organisation faced and suggests Legal’s business is stable. In its final dividend, the firm paid out around £750m to shareholders.
As one of the country’s largest pension managers, L&G should continue to see high demand for its services. That should support further dividend and earnings growth in the years ahead, which makes the company stand out as one of the top cheap UK shares.
As such, now could be the perfect time to snap up a share of this dividend champion while it trades around 25% below the level it started the year.
AstraZeneca
AstraZeneca (LSE: AZN) is another cheap stock I’d consider buying today. As one of the world’s largest pharmaceutical corporations, Astra operates a relatively defensive business model. It’s also in line to be one of the first pharmaceutical companies to produce a coronavirus vaccine. If successful, this could have a large impact on the organisation’s bottom line.
Cheap UK shares like AstraZeneca’s don’t come around that often. The company is currently trading at a forward price-to-earnings (P/E) multiple of 21. That’s compared to a P/E of more than 30 for some of the business’s US-listed peers.
These numbers suggest the stock may offer a margin of safety and the potential to produce substantial capital returns from current levels. On top of this capital gains potential, the stock also supports a dividend yield of 2.6%.
Unlike most cheap UK shares, Astra hasn’t cut its dividend recently. And it doesn’t look as if it’ll have to either. The payout is covered 1.5 times by earnings per share, which gives the group lots of headroom to maintain, or increase, the payout.
Therefore, if you’re looking for cheap UK shares that may be able to produce high total returns for your portfolio, it might be a good idea to consider buying Astra today.