3 Top UK Stocks You Can Buy And Hold For The Next Decade
Your portfolio should include companies that can deliver growth sustainably
- A top pharmaceutical company that has the resources to invest in research
- A beverages company that commands a huge share of the global alcohol market
- A telecoms company that is investing in the latest communications technologies
When choosing a UK stock to hold for a decade, your primary focus should be the strength of the underlying business. The company you are buying should have a clear revenue model, a history of consistency in its performance, and growth. It should also have a competitive edge in its core market.
Such a company should also have the capacity to survive and thrive through tough times. For instance, the COVID-19 pandemic has hit the world economy hard, but there are companies that are still doing pretty well. These are companies that have market leadership in their industries and have the resources to keep innovating regardless of the business environment.
Whatever direction the COVID-19 pandemic takes the world economy, these three British companies are well-positioned to thrive. This makes them top candidates to have in your equities portfolio for the next decade, or even several decades ahead.
Top UK Stocks To Buy And Hold For The Next Decade
GlaxoSmithKline PLC (GSK)
GlaxoSmithKline is one of the largest pharmaceutical companies, not just in the UK, but in the world. It is one of the companies that are pretty guaranteed to be around and performing well for decades to come.
One thing that makes GSK a pretty good stock to buy and hold is its deep pockets. In the pharmaceutical industry, growth is usually pegged on the ability to invest in research, and come up with breakthrough medical solutions.
Over the years, the company has come up with pharmaceutical solutions that have been a positive addition to its bottom line. Presently, the company is carrying out research on RSV, an unmet need in older adults. According to the company’s Chief Scientific Officer and President of R&D, Hal Barron, this is a big market as RSV affects over 180k people in the U.S. Out of these about 14,000 of them die.
The company’s revenues are also quite consistent regardless of the circumstances. This is evident in its strong revenue growth in Q2 of 2021. While announcing these results, the company stated that its total revenues grew by 12% in the quarter. It attributed this growth to new and specialty medicines among other areas of its operations.
GSK is also a company that is always innovating, a key ingredient to look for when investing in any company with a long-term perspective. Besides its heavy investments in R&D, this company has seen its share of revenues that come from e-commerce grow by 7%.
According to CEO Brian McNamara, the company expects to see this grow over the years. Such innovations are likely to see this company grow revenues over the next decade.
It is one of the safest stocks you can hold, with the expectation of growth in the next couple of decades.
Diageo PLC (DGE)
Technology can change, and render many industries obsolete. However, when it comes to betting on the next few decades, then the beverage industry is one of the safest you can bet on.
The industry has been growing for centuries and has withstood tough times over the decades. Diageo happens to be one of the biggest players in the world on this front, and this gives it a competitive edge long-term.
The company was resilient all through 2020 when COVID-19 hit most companies, and it is doing quite well in 2021. Towards the end of July, the company reported that it expected better-than-expected full-year results.
The company has attributed this to the reopening of bars and restaurants in North America, a factor that pushed up its sales for its major brands like Tequila, and Johnnie Walker.
Diageo has also reported that sales of its products in the UK rose during the pandemic. It reported that sales of its spirits in the retail market shot up during the pandemic, and led to an increase in sales by 16%.
Such metrics make it a pretty predictable growth stock, for an investor who wants to buy and hold for decades.
Given its consistent revenue growth and its stability, it is not surprising that a number of analysts have raised their projections for this stock.
Back in 2020, two market analysts upgraded their outlook for the stock. Jeffries upgraded it from underperform to buy. Morgan Stanley too upgraded the stock from equal weight to overweight.
This year, analysts are indicating their bullish view of this stock going forward. In April, Argus research upgraded it from hold to buy.
All these are pointers to the confidence that investors have in this stock going into the future.
Vodafone Group PLC (VOD)
Vodafone PLC is another UK stock that makes for a good buy if you want to hold for decades.
One of the key factors that make it a good stock is its dominance in telecommunications in the UK, Europe, and many other jurisdictions globally.
The company has recorded pretty consistent returns throughout its history, and that’s a good predictor of its future potential. In its most recent financial results, the company announced growth in its Q1 revenues.
It cited the growth of revenues in its European business as the key contributing factor to this revenue increase. It specifically noted that revenues in Germany, its biggest market in Europe, grew by 1.4%. This was higher than the 1.2% growth recorded in quarter four of 2020 in the same market.
The company is also recording strong growth in emerging markets, especially in Africa. In its Q1 2021 results, the company announced that its M-Pesa money transfer platform in Africa recorded an increase of 45% compared to the previous year.
Besides its solid revenue base, the company is also quite receptive to new technologies, and that’s a good thing for any investor looking to buy a stock for decades.
One of the technologies reshaping the world today is 5G. This technology could impact not just communication but could also be the backbone of emerging technologies such as IoT.
Vodafone is a massive investor in this technology and has the largest 5G network in Europe. It is also looking to expand on its existing network and recently announced that it had bought a 2X10 MHz spectrum in Spain. It is using this to expand its network coverage in the country, which is good for long-term value appreciation.
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