I’m searching for the best cheap UK shares to buy for my shares portfolio. Here are two bargains I’m thinking of buying right now.
Playing the online retail boom
The spread of Omicron poses a threat to stacks of UK shares as we move into 2022. Urban Logistics REIT (LSE: SHED), on the other hand, is a stock that could benefit as e-commerce growth rates might receive an additional boost. Analysts at courier Parcel Hero reckon online Christmas spending by Britons will likely match last year’s £35.3bn as people grow more cautious about visiting shops. It’s even possible that new restrictions (or even lockdowns) in the weeks ahead could propel expenditure well past these levels.
Urban Logistics provides the essential warehouse and distribution properties that keep e-commerce moving. So it’s well placed to benefit from any rise to online shopping activity. Rents are soaring in this part of the property market as supply fails to keep up with demand. I’d buy Urban Logistics even though weak consumer spending levels could pose a threat to profits growth.
At a current price of 172p per share, Urban Logistics trades on a forward price-to-earnings (P/E) ratio of 22.2 times. I don’t think this is an excessive valuation as rapid e-commerce growth appears to be here to stay. Besides, a chunky 4.4% dividend yield for this financial year (to March 2022) helps to take the sting out.
6.4% dividend yields
I haven’t stopped championing the wisdom of buying housebuilding stocks like Taylor Wimpey (LSE: TW). Fresh housing data this week revealed how strong trading conditions remain for such businesses.
According to Nationwide, average property prices in the UK rose 0.9% in November from the prior month. This was up from growth of 0.7% reported in October. A perfect blend of low interest rates, massive competition in the mortgage market and financial support from Help to Buy is keeping housebuyer activity ticking along nicely. And I see no end to this trend either. It’s why I already own shares in this particular homebuilder (along with Barratt Developments).
Indeed, Taylor Wimpey has continued hiking its profits forecasts in recent months in light of this bright industry outlook.Demand for homes in the UK continues to outstrip supply by a wide margin, a phenomenon I think will take many years and much hard work by government to solve.
City analysts think Taylor Wimpey’s earnings will rise 7% next year. This leaves the builder trading on a P/E ratio of just 8.5 times. Furthermore, at current prices of 162p Taylor Wimpey carries a mighty 6.4% dividend yield.
There are risks. Concerns over the strength of the housing market have grown following the full restoration of Stamp Duty. Shocking HMRC data, for example, showed home sales more than halved month-on-month in October as people’s tax liabilities rose. But I feel Taylor Wimpey’s value is hard to ignore. It’s why I’m thinking of increasing my holdings in the business today.
5 Stocks For Trying To Build Wealth After 50
Markets around the world are reeling from the coronavirus pandemic…
And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.
But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.
Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…
You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.
That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.
Click here to claim your free copy of this special investing report now!
Royston Wild owns shares of Barratt Developments and Taylor Wimpey. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
This post was originally published on Motley Fool
