With £1000 To Invest, These 3 Top UK Shares Are Best To Buy In September
While August tends to be relatively uneventful for the FTSE 100, this time around the market seems to be on an upswing.
This has a lot to do with the fact that the economy is just emerging from a period of major uncertainty.
The optimism in the markets also means that this is a perfect time to invest in top UK stocks.
One thing that comes to mind when choosing to invest in stocks is investable capital. While the more one invests the more they stand to make, there really is no limit to how much one can invest. What matters is the choice of stocks to buy.
For instance, if one has £1000 to invest, it would be best to spread it across three stocks. It lowers risks, while at the same time increasing the potential for gains.
That said, which are the best UK shares to invest £1000 today?
Investing £1000 Into Top Stocks
There are many ways to allocate a stock portfolio. However, the best way would be to allocate it between a dividend stock, a growth stock, and a high-risk high-return play.
The idea is to balance between passive income, capital appreciation, and the potential to grow wealth fast if things go right.
Top UK dividend stock #1. Vodafone (VOD)
There are many top UK dividend stocks that look pretty undervalued at the moment. Everything from tobacco companies to banks looks attractive at the moment.
However, for top dividends and stability, telecommunications companies are most attractive at the moment.
For instance, Vodafone (VOD), one of the largest telecommunication companies in the world has a lot going for it at the moment. Besides consistency in its revenues in the UK, the company’s subsidiaries globally are doing pretty well.
For instance, M-Pesa, a mobile payments system developed by one of its subsidiaries in Africa is now one of the fastest-growing in the world. It is growing so fast that Vodafone has been considering spinning it off.
Besides its success with its current technologies, Vodafone is also heavily invested in one of the next biggest technologies in communication, and that’s 5G.
The company has committed substantial investments in this tech and is now positioned to compete with other top global players on this front.
All this points to a company that has the capacity to keep paying dividends consistently going into the future.
Its current dividend rate is 6.34%, and that’s one of the best of all top FTSE 100 stocks. Its dividend yield has also been on a consistent uptrend since 2015 and only dipped slightly in 2019.
Vodafone’s stock price is at an interesting price level too. It dipped in late July and is yet to make a full recovery to pre-dip levels.
This makes it a top stock to watch now that the FTSE 100 is on a rebound. The rebound increases the potential for gains in the short to medium term.
It is definitely a top dividend stock to keep an eye on this month, and beyond.
UK Growth stock: #2. Flutter (FLTR)
There are many growth stocks in the FTSE 100, but Flutter (FLTR) looks most appealing at the moment.
That’s because of the return of the European Football season. The season has kicked off and for sports betting companies like Flutter, this means a higher revenue potential.
Besides the European sporting season, this company is recording massive growth in its US business.
Flutter has recorded massive growth from a gamble it made by purchasing a controlling stake in FanDuel two years ago.
FanDuel is a U.S online fantasy sports company that has seen profits rally quite strongly over the last couple of years. The growth rate is so strong that Flutter expects a huge jump in profitability in 2023.
This coupled with the expected revenue growth this year makes it quite a strong growth stock to keep an eye on at the moment.
The company’s balance sheet looks very attractive for a growth stock too. Its cash flows are net positive and stand at over GBP 1 billion.
This means it has enough money to handle its operations, a key factor to the sustainability of any company.
The technical indicators paint a picture of growth too. All through August, the stock has been on an upward trajectory.
The momentum has been so strong that in just a few weeks, FLTR has pushed through two key moving average resistance levels, the 50-day, and 100-day moving averages.
Currently, it is facing some strong resistance at the 200-day moving average. If it pushes through this resistance, then it has lots of room for growth in the short to medium term.
High risk, high return play: #3. Glencore (GLEN)
Commodity prices have been rallying for a while now. This has largely been driven by the disruptions to supply chains that started in 2020.
Since things are yet to return to normal in most parts of the world, and demand for commodities is still at peak levels, their prices are likely to stay high.
This places Glencore (GLEN) in a unique position to deliver exceptional growth in the short to medium term.
The stock is already one of the top performers in the past year, an indicator of how responsive it is to rising commodity prices.
The big risk to this stock comes from the fact that commodity prices tend to fluctuate heavily.
For instance, over the last few days, copper prices have dropped due to reports that demand has slowed down in China.
Such factors could lead to a steep drop in the price of this stock. It’s what makes it a high-risk play to include in a stock portfolio for September.
The choice for it is also influenced by the fact that it deals in multiple commodities. Unlike some companies that derive the bulk of their revenues from a single commodity such as oil, Glencore is quite diversified.
Its revenues are derived from iron ore, tin, vanadium, lead, zinc, and nickel among other commodities. This means while risky, it has a lower price risk, than other commodity stocks.
While these stocks can give value growth, it is important to note that they are pegged on the broader economy. The world is still dealing with the COVID-19 pandemic, and there is no clear breakthrough from it, yet. This means that in the short term, these stocks can go either way. However, when looking at the long term, the short-term risk factors are insignificant.
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