When I think about the best UK shares to make a million with, the same two pop up every time.
With a stock market recovery on the cards, now could be the perfect time to buy a diversified selection of the best UK shares at attractive valuations. And they could offer better returns than gold or Bitcoin in the long run.
As we head deeper into winter 2020 I’m looking at two of the best UK shares. Each appears to offer high profits, growing sales and attractive entry points following price falls in 2020. I think with a combination of capital gains and dividends they could supercharge my returns and help me to make a million.
Make a million-aire
Rightmove (LSE:RMV) should be towards the top of anyone’s best buy list, in my opinion.
The FTSE 100 shares have regained nearly everything they lost in the March 2020 stock market crash.
But they are still 10% cheaper than six months ago after a small dip. So I think now is a decent entry point into the FTSE 100 housebuying comparison website.
Yes, Rightmove’s price-to-earnings ratio appears rather high at 32 times earnings.
But P/E ratios aren’t a perfect measurement of value. And it’s for one good reason. This metric doesn’t take into account growth! So fast-growing companies will have a higher P/E ratio than slower growing rivals.
Rightmove is expected to grow its earnings per share by 46% next year. That’s a lot, and an investment now could help me make a million in my Stocks and Shares ISA.
Rightmove is also way ahead of its competition. In fact, it retains a crushing 88% of market share among people researching homes to buy. While it’s not a total monopoly, it’s not far off. This would appear to offer Rightmove shares a good margin of safety.
And while buying and selling activity fell away during lockdown, the release of restrictions could see pent-up demand explode. I see a strong long-term outlook here, which means investors could generate impressive returns from buying and holding.
The second share I’d look at to make a million is GlaxoSmithKline (LSE:GSK). The FTSE 100 pharmaceutical giant’s shares have crashed by 15% across 2020. To me that seems like a sound entry point to buy and possibly make big gains long term.
That’s because at today’s prices GSK shares offer a 5.7% yield. This is the largest dividend yield on the FTSE 100 from the shares that I consider to have a wide economic moat. Moats, by the way are a way of describing a company’s ability to fend off its competitors.
It’s Warren Buffett’s favourite metric for choosing the best shares to buy and hold long term. Buffett’s current net worth means he can make a million quid in less than an hour, by one calculation. We might have to wait a little longer, but still.
Pharmaceutical companies tend to have wide economic moats because the competition is not allowed to sell the same product, even if they wanted to. GSK, for example, puts patent protection and trademarks on its drugs to stop this from happening. And the higher a dividend yield, the more likely I am able to compound my wealth year after year to make serious gains.
The post Forget gold and Bitcoin. I’d buy these 2 UK shares today to make a million appeared first on The Motley Fool UK.
TomRodgers has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline and Rightmove. 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.
Motley Fool UK 2020