The primary reason I think they are overlooked is that they operate in sectors that are generally considered ‘boring’. But when I look at returns over the last five years, they rank among the top 10 in the index. Both companies have excelled over the short, medium, and long term and I think they are top picks for my portfolio today. Here’s why.

Chemical powerhouse

British company Croda International has established itself as a top chemical manufacturer and supplier across many industries. It has a strong global presence and recently acquired its first manufacturing site in China. Croda also has 10 manufacturing sites in Europe, the Middle East, and Africa, and three in North America. This strong foothold has allowed the company to focus on a variety of businesses including adhesives, polymers, pharmaceuticals, and dietary supplements.

Despite Croda shares growing a whopping 59.5% last year, I still think there is room for growth. This is because of the impressive half-yearly (H1) 2021 results the company posted. Operating profits went up 42% to £218.5m (£154m in H1 2020) driven by a 39% growth in sales. Croda shares are currently trading at 9,880p, very close to its all-time high of 9,920p.

However, overvaluation is a concern. Croda shares are trading at a forward profit-to-earnings ratio of 54 times, which is well over the FTSE 100 average. Also, analysts predict significant expenditures for Croda due to new UN environmental sustainability standards to be met by 2030. Changes in the manufacturing chain and increased focus on R&D could increase operating costs significantly, which could cut down revenue growth.

But Croda is one company I would invest in at any given time, factoring in its strong sustained returns in the market. I am watching this FTSE 100 share closely to capitalise on any small dip in share price.

Global asset manager

Intermediate Capital Group’s recent surge in the market has been spectacular. One-year returns stand at 50% and returns over a five-year period stand at a whopping 238.3%, making it one of the top performers in the FTSE 100 index over the medium term.

Its shares are currently trading at their all-time high price of 2,360p. But, the company still looks undervalued when factoring in recent earnings. Its profit-to-earnings ratio of 15 times and steady revenue stream tell me there is room for growth. 

ICP manages $68.9bn in total assets. According to FY2021 (ending 30 September 2021) results, profit before tax was £509.5m (2020: £114.5m) with earnings per share of 162.3p. Fees from fund management was £333.7m. This is a huge plus because businesses don’t often switch asset managers. Also, the company announced a 56p dividend, up 10% from the previous year bringing yield at the current share price to 2.3%.

However, I don’t think global economies are still clear of turbulence. An event like a market crash could see businesses pull investments to generate liquidity, which could affect ICP’s earnings. But, I think the company has been posting strong results and returns. I would definitely consider a £1,000 investment in this FTSE 100 company today.

Best stocks to buy #1: Imperial Brands

The first of my best stocks to buy is Imperial Brands (LSE: IMB). Formerly known as Imperial Tobacco, it is a major producer of tobacco, cigarettes and vaping products. Its leading brands include Davidoff, Gauloises, JPS, Kool, West, and Winston cigarettes. Though smoking is harmful (and even fatal), global cigarette sales actually rose in Q1 this year. Hence, this Bristol-based business generates plenty of cash for buying back shares and paying dividends. At its current share price of 1,555.5p, Imperial is valued at £14.7bn. Its shares trade on a price-to-earnings ratio of 5.3 and an earnings yield of 18.9%. They also offer a dividend yield of 8.9% a year, versus the FTSE 100’s forecast 3.8%. Despite Imperial’s high debt levels that mean a certain amount of risk, this stock looks cheap to me.

September share #2: Persimmon

The second of my best stocks to buy is Persimmon (LSE: PSN). One of the UK’s biggest housebuilders, York-based Persimmon was founded in 1972. The UK housing market has boomed over the past 12 months, partly due to reduced stamp duty tax breaks. Hence, Persimmon has been making hay while the sun shines, yet its shares have eased off since June. On Friday, they closed at 2,870p, over £4 below their 52-week high of 3,272p, and valuing the group at £9.2bn. Today, Persimmon shares trade on a price-to-earnings ratio of 11.6 and an earnings yield of 8.6%. Their dividend yield of 8.1% a year is one of the FTSE 100’s highest. Also, the group has over £1.3bn in cash on its balance sheet. Although I think the UK housing market is overheating, Persimmon might actually gain from any bubble bursting, thanks to its superior capital strength. But a prolonged or steep fall in house prices could be bad news for this stock.

My #3 share: Intermediate Capital Group

The third of my best stocks to buy is Intermediate Capital Group (LSE: ICP). ICG is a global alternative asset manager in private debt, credit and equity. In other words, its funnels money to help private and public companies to grow. By mid-2021, ICG managed over $65.2bn in assets across multiple funds. And when stock market and other financial assets boom, so does ICG. Indeed, over the past five years, ICG shares have skyrocketed by 261.4%, making them one of the FTSE 100’s best performers. During 2020/21, it made bumper profits and earnings in the heightened market volatility. At its current share price of 2,219p, ICP is valued at £6.6bn. Currently, its shares trade on a price-to-earnings ratio of 14.3 and an earnings yield of 7.0%. They offer a modest dividend yield of 2.6%, but this is respectable for a go-go growth stock. But if financial markets go into reverse, this could depress ICG’s future earnings.

Investing £1,000 into great UK shares

Generally, I buy UK shares for two reasons. First, to generate passive income from regular cash dividends. I rely heavily on dividends to boost my passive income. Second, to generate capital gains (profits from selling shares in the future). Hence, armed with my £1,000, I choose one dividend darling and one growth stock — both members of the FTSE 100 index. I’d happily invest £500 into each of these two top UK stocks today. (At present, I don’t own either share.)

Top UK stocks: #1. Rio Tinto

Currently, I think several top UK stocks look cheap. For example, certain banks, insurers, consumer staples (tobacco), miners, and oil & gas producers. But for bumper dividends, mega-cap mining stocks look compelling to me. Take, for example, Rio Tinto (LSE: RIO), the huge Anglo-Australian global miner. At the current share price of 6,080p, Rio is valued at £101.2bn, making it a FTSE 100 super-heavyweight. Rio generates huge cash flows and profits from mining iron ore, copper, diamonds, gold and uranium around the globe.

After falling back from its 2021 peak of 10 May, Rio stock looks cheaper today. It trades on a price-to-earnings ratio of 7.3 and an earnings yield of 13.7%. Also, it offers an attractive dividend yield of 8.1% a year — well ahead of the Footsie’s prospective 3.7% yield. Furthermore, Rio’s dividend was the UK’s largest dividend by size last year. Despite mining stocks being historically volatile, I’m drawn to this colossal (but not guaranteed) pay-out.

Growth stock: #2. Intermediate Capital Group

In 18.5 years as a financial writer, I’ve rarely mentioned Intermediate Capital Group (LSE: ICP). That’s a shame, because this British success story has been one of the top UK stocks for years. Here’s how this champion stock has performed over seven different timescales:

As you can see, ICP has been a winner over all seven periods. What’s more, this top UK stock is up almost 273% over the past five years, ranking it at #4 among the FTSE 100’s biggest gainers since mid-2016. The extreme market volatility of 2020/21 delivered a terrific year for this alternative asset manager. It reported record operating income (+24%), pre-tax profit (+345%) and earnings per share (+320%). At the current share price of 2,219p, ICP’s market value is £6.5bn. Its shares trade on a price-to-earnings ratio of 13.9 and an earnings yield of 7.2%. ICP offers a dividend yield of 2.6%, which is fairly decent for a growth stock. 

Now for a wealth warning. Both dividend and growth stocks rely on continued economic recovery. If bad news arrives regarding new Covid-19 variants, inflation or future lockdowns, this could harm share prices. Conversely, rising vaccination rates and continued corporate earnings growth could be good for shares. Finally, as a long-term investor, I’m in no rush to get rich quick. Thirty-five years of experience has taught me that time is on my side. Hence, I’d buy and hold these two top UK stocks for, say, five years or more!

Best stocks to buy now for growth

Rising stock markets and the increasing wealth of the middle class is leading to increased demand for wealth management services. It’s also driving up demand for alternative assets, such as specialist bonds. 

With this being the case, I believe Intermediate Capital (LSE: ICP) is one of the best stocks to buy now. The specialist asset manager has seen steady growth in its assets under management over the past few years.

As these have expanded, so has fee income. Net profit has more than doubled over the past six years. This growth has also allowed the company to increase its dividend from 17.8p per share in 2016 to around 56p for 2021. 

Due to the tailwinds outlined above, I think the company’s growth can continue, although it may slow as the group becomes bigger. 

Demand for the alternative asset manager’s products and services may also decline if there’s a sudden increase in interest rates. Rising rates may reduce the appeal of specialist bond instruments among investors. 

This risk aside, I think this is one of the best growth shares to buy right now and I wouldn’t hesitate to add it to my portfolio. 

As a champion of growth shares

The other company I believe is one of the best stocks to buy now in the growth sector is Frasers Group (LSE: FRAS).  The owner of the Sports Direct brand, Frasers has been buying up other struggling high street brands over the past few years. It’s even begun buying retail parks.

This has helped build the group into a retail giant with substantial economies of scale. As the economy reopens and consumer confidence grows, I think Frasers’ efforts to consolidate the high street over the past few years will start to pay off. 

Unfortunately, its growth is far from guaranteed. The retail sector is incredibly competitive, and while Sports Direct might have been able to conquer the sports retail market over the past decade, there is no guarantee it’ll remain the top dog. It could face multiple challenges such as higher costs and cheaper products from competitors. 

Still, while the company might face some challenges as we advance, I am attracted to its low-cost offering and growth potential. 

The one downside to buying shares in the retailer today is its valuation. The stock is trading at a forward price-to-earnings (P/E) multiple of 27.5. I don’t think that leaves much room for error if Frasers’ growth doesn’t live up to expectations. 

Nonetheless, despite the above risks and current valuation of the equity, I’d buy the company for my portfolio of growth shares right now. 

The share has almost doubled in the past year. While the stock market rally of November 2020 definitely helped, it has also benefited from its own fantastic performance. 

I am tempted to buy the share, but I am also intimidated by the amount of share price increase it has already seen. What if I buy it and it stops rising, or worse, starts falling? 

Falling relative price

To understand what is most likely to happen, I looked at its relative price over time. Intermediate Capital Group’s price-to-earnings (P/E) ratio was at 11.3 times for its latest financial year, which ended on 31 March 2021. This is actually less than what it was for the year before, 23.6 times. This means that its price rise has not kept pace with its earnings. In other words, in relative terms it is actually cheaper than it was last year.

Further, at a P/E of 11.3 times, the share is far more reasonably priced than most other FTSE 100 stocks today. To me this is a clear indication that the Intermediate Capital Group share price can continue to gain from its current level. 

FTSE 100 stock with a bright future

The asset manager, with interests across asset classes like private equity and capital markets among others, is also positive about its performance in the current year. It says that the year has started well. But what I really like is that it appears confident that it can “navigate the evolving and dynamic market conditions”. This is an important remark, I think, as a time when markets are challenged because of Covid-19. 

Intermediate Capital Group also pays a dividend that can add to investors’ gains from the stock. At 2.6%, the dividend yield does not qualify it for an income stock, but it is not trivial either. 

Should I be careful?

That said, Intermediate Capital Group’s results have not always been buoyant. Its net income actually declined in the years leading up to the year ending March 2021. The same can happen in the future. And the share price reaction could be sharp after a year of stellar growth. 

If I’m feeling particularly cautious, I would wait until its next trading statement is released at the end of July. But going purely by its relative price, I think there is still scope for an increase in share price, even though it could be slower to rise. I’m putting this share on the ‘to buy’ list for my portfolio. 

These gains are quite mild compared to those being recorded by the Intermediate Capital Group (LSE: ICP) share price, however. The asset management giant is up 5% in Tuesday business following a positive market reaction to full-year numbers.

The FTSE 100 firm hit record peaks of £23.18 per share earlier in the session. While settling lower, the ICG share price is still up 77% over the past 12 months at £22.70.

ICG prints record profits across the business

In its update, ICG said that it had enjoyed record profits across both its divisions in its financial year to March 2021. As a result, pre-tax profit for the group soared to £507.7m from £110.8m in the prior period.

At ICG’s Fund Management Company unit, pre-tax profit rose 10% year-on-year to £202.3m. Revenues at the division grew 14% in the period to £388.5m.  

Meanwhile, ICG’s Investment Company arm swung to a pre-tax profit of £305.4m last year from a loss of £72.3m in financial 2020. The FTSE 100 firm said that revenues here increased to £426.3m last year from £27m in the previous period.

Following the results, ICG has elected to raise its full-year dividend 10% to 56p per share. This marks the 11th consecutive yearly raise at the financial services company.

FTSE 100 firm upgrades its fundraising target

In other news, ICG raised an impressive $10.6bn during the course of the last financial year, it said. This took total assets under management (AUM) to $56.2bn. And it was the third-largest yearly amount that the company has reported in its history.

“Client demand for our strategies in the year was materially higher than we had initially anticipated in an off-cycle year amid a challenging environment”, chief executive Benoît Durteste commented.

Fundraising has been so strong, in fact, that ICG has decided to raise its fundraising target to $40bn by 2025. The firm’s upgraded goal also stipulates a minimum annual raise of $7bn through to the middle of the decade.

“Excellent progress”

Commenting on the results, Durteste said, “It has been a year of excellent progress for ICG. We have delivered record profits and have continued to invest in our platform”.

He claimed that, “Our success this year was further underpinned by long term client relationships, the strength of our brand and platform, and our investment performance… We grew our client footprint and expanded our product offering with new strategies such as Life Sciences”.

Durteste added, “We have a business model and financial profile that enable us to thrive in dynamic market conditions, and I am confident in our prospects”.

UK growth stocks to buy

Intermediate Capital (LSE: ICP) is the first enterprise on my list of UK growth stocks to buy. This company is an asset manager that specialises in private debt, credit and equity investments. 

I think this could be a great way to invest in the UK and European economic recovery through a diversified basket of assets controlled by a professional manager. The stock also supports an attractive dividend yield of 2.6%. The payout has grown at an annualised rate of 7% over the past six years. 

The one significant risk of investing in businesses like Intermediate is there’s limited disclosure on what it owns. As such, it may not be suitable for all investors. There could be skeletons hiding in the closet, which may only appear in a financial crisis. 

However, I’m comfortable with this risk, which is why I’d buy the stock for my portfolio today as part of a basket of UK growth stocks.

Homebuilding growth 

The UK housing market is currently firing on all cylinders. That’s good news for homebuilder Bellway (LSE: BWY). 

Using forecasts presented by the company, City analysts believe group net income will rise to £408m this year, up from £193m in 2020. As the UK struggles to build enough houses to meet demand and home prices continue to increase, I think this figure will increase in the years ahead.

It seems as if all Bellway needs to do is keep building, and buyers will keep buying. 

Of course, this trend may not last. House prices can’t go up at 10% a year forever. An increase in interest rates could curb demand for mortgages and send home prices lower.

Higher costs may also prove to be a headache for the business. These could hurt profit margins, reducing profitability and limiting capital available for reinvestment in new dwellings. 

Even after taking these challenges into account, I think Bellway remains one of the best stocks to buy right now. That’s why I’d  add it to my portfolio. 

Tech sector growth 

The final company I’d buy for my portfolio of growth stocks is Softcat (LSE: SCT). The IT infrastructure solutions provider has reported explosive growth over the past five years. As technology continues to play an increasing part in our daily lives, I think the group will continue to report growth. 

As well as organic growth, it looks to me as if the business has the capacity for acquisitions. At the end of 2020, it had £70m of cash on its balance sheet.

That could provide firepower for deals, or a special dividend for investors. The stock already supports a yield of 1.9%, at the time of writing. This is why I think the stock is one of the best shares to buy now. 

Softcat has room for growth, but the firm could face challenges as well. These include competition, which is only growing in the tech sector, and the potential for higher costs. 

These challenges aside, I’d buy Softcat for my portfolio of growth stocks. 

Looking at FTSE 100 shares, for the most part stocks are still trading lower than they were 12 months ago, just as the pandemic was beginning to take hold in the UK.

There have been signs of a recovery in the last few months, however, with the index gaining 33% since its low of 4,993p in March 2020.

I still think there are some UK shares to buy today which I would add to my Stocks and Shares ISA. UK citizens have an allowance of £20,000 for the tax year in which they can receive with an ISA. 

While there is more risk involved than in a Cash ISA, I think a Stocks and Shares ISA can be a good way to get started in the stock market.

Here’s two shares I’d buy today for my Stocks and Shares ISA.

Rio Tinto

Mining giant Rio Tinto (LSE:RIO) is a company with a strong record of growth over the years. Its share price has gained more than 220% over the last five years.

In a recent trading update, Rio Tinto announced it would be paying out a record dividend of $3.09 per share in addition to a special dividend of 93 cents per share.

The company also said its full-year profits had climbed 22%, as strong demand for iron ore led to an increase in the price of the commodity. 

If the global economy is able to return to some sort of normality over the next 12 months, I think this demand could grow even faster and boost Rio Tinto’s profits and share price even further.

The major risk is that commodity markets such as iron ore can often be cyclical in nature. As Rio Tinto is experiencing significant growth right now based on soaring iron prices, a fall in these prices is certainly possible. 

Intermediate Capital Group

The Intermediate Capital Group (LSE:ICP) share price suffered a decline last week, but the shares have performed solidly in recent years. The stock has gained more than 10% over the last 12 months, while that figure is just short of 70% over the last two years.

The asset manager entered the FTSE 100 after a period of sustained growth, and has continued that form to see its market capitalisation edge over £5bn.

Assets under management, a key measure of growth for those in the sector, have consistently grown for the business. In a January trading update, the company reported total assets under management rose 2% in the three months to 31 December, to €47.2bn.

Intermediate Capital says it is “well positioned to continue this trajectory” and if that is the case I think its share price can also continue to grow. On that basis I would add it to my list of shares to buy today.

Like other financial services firms, the company is subject to economic weakness due to the ongoing Covid-19 pandemic. Its profits have been underwhelming at times over the last few years, so there is a risk to buying the shares right now.

More than one FTSE 100 share’s price doubled during the year from the levels hit during the stock market crash. Some of these shares look pretty attractive to me as an investor. 

But they also leave me asking how much further can these share prices go? 

#1. Intermediate Capital Group: making good investments

The FTSE 100-listed asset manager Intermediate Capital Group (LSE: ICP) distinguished itself from the broader financial services set in more than one way last year.

It had climbed its way up to the FTSE 100 list of constituents when I first wrote about it. Further, in its last set of results for the half-year ending 30 September 2020, it reported a 32% rise in earnings per share. It also pays a dividend and has a yield of 3.1%, which isn’t bad in my view, especially considering the many dividend cancellations that happened in 2020. 

Yet, there are downsides to ICP too. Its income has been inconsistent over the years. And its share price has run up a lot in the last year. This is especially so since its results were released soon after the November rally started, rewarding its performance more than would have been the case in more normal times. 

According to Financial Times data, analysts on average expect a 5.7% increase in the ICP share price over the next 12 months. Like all forecasts, this could change based on future developments and is not something to rely on. But I think it’s a valuable piece of information to consider.

This combined with the over 200% increase in price since the worst of the crash, suggests to me that I should wait and watch for now. An investment in ICP could continue to reap rewards, but I would think the process would be slow.  

#2. Glencore: commodity boom for this UK share

Like all other FTSE 100 miners, Glencore (LSE: GLEN) has benefited from the boom for industrial metals. In what could’ve been a time of crash and burn for miners, an upswing in Chinese demand saved the day. The vaccine discovery provided their share prices with further impetus. 

By August, Glencore’s share price was already close to double the levels seen during the stock market crash. Now it’s close to three times those levels.

If the Chinese fiscal stimulus continues to create infrastructure and the US’s fiscal spending takes off too, I reckon that Glencore will find itself in a good place this year. 

Which isn’t to say that it’s a firm without a flaw. Glencore reported weak financials for the first-half of calendar year 2020. It’s yet to report another set of numbers that could serve to wipe off that memory clean. It has other serious issues too, like corruption charges. The public reveal of these charges can be directly linked with its subsequent share price weakness.   

On balance, though, I think given the changed global situation we find ourselves in, the Glencore share price can make gains. 

Lloyds’ share price future is uncertain

But since we aren’t out of the woods yet, I doubt if the recent recovery in Lloyds share price can be sustained. Institutional investors, for instance, are losing confidence in the stock, which says something about its prospects. Hedge fund Marshall Wace shorted the stock in September according to an IG report. I think times are particularly tough for FTSE 100 banking stocks, making them underperformers at the stock market. But other finance companies, like asset managers, have been able to distinguish themselves the year. 

Asset managers perform better

One of them is Scottish Mortgage Investment Trust (LSE: SMT), whose share price is at all-time high right now. According to SMT’s own assessment, its share price rose by 86% in the one year up to 31 August this year. Its popularity and performance is tied to its investments in the coveted Tesla stock. Essentially, buying shares in SMT gives the investors a piece of Tesla, along with other global companies that have seen fast growth, like Alibaba and Netflix. 

I think SMT’s performance is particularly notable considering that more than 46% of its portfolio is in the consumer cyclicals’ sector, according to the Financial Times’ classification. And broadly speak, this hasn’t exactly been the year of cyclicals. They are always dragged down when consumer spending is at a low. But, with recovery expected in 2021, cyclicals should perform better, and relatedly, so should SMT. I think this is a stock to consider, despite its huge run-up in 2020. 

FTSE 100 entrant to note

Another is the Intermediate Capital Group (LSE: ICP), a private equity fund and other financial solutions provider, that got bumped up to the list of FTSE 100 companies this year. Unlike SMT, ICP hasn’t yet put the stock market crash behind it. But, its stock price has risen. In fact, since the time I first wrote about it at the end of March, its share price is up almost 55%. 

Now, we at the Motley Fool encourage investors to buy shares and hold them for at least a few years. But gains in relatively short time-periods are important to indicate if we are on the right path, or not. So far, it would appear that investing in ICP would have been a good decision at the time. Its last update, released in July, was optimistic about the company’s prospects as well. It also pays a dividend, which is an additional plus to the robust growth stock.