The stock market crash earlier this year caught many investors by surprise. However, it was also an opportunity for long-term investors to buy high-quality stocks at low prices. And while some shares have recovered lost ground over the past few months, others continue to languish. With that in mind, I think these could be the five best shares to buy right now.
Best shares to buy
One stock I’ve been buying this year is drinks giant Diageo. The coronavirus pandemic has impacted the company’s sales but, in the long run, I reckon consumer demand for products such as Guinness and Smirnoff vodka will remain robust.
The business has an impressive track record of above-inflation dividend increases, and the stock currently supports a dividend yield of around 3%. As such, I think this could be one of the best shares to buy now after the stock market crash.
Another group I have my eye on is Mr Kipling owner, Premier Foods. This company has been struggling since the financial crisis. It borrowed too much money before the downturn and has been working on getting its balance sheet under control ever since.
Thanks to a surge in sales earlier this year, the group has been able to pay off a chunk of its debt. An agreement with pension trustees also significantly reduced the risk of investing in the business. Thanks to these twin tailwinds, I believe this could be one of the best shares to buy now ahead of future growth.
Pubs have been at the eye of the coronavirus storm this year, and JD Wetherspoon has suffered significantly. It reported its first loss since 1984 this year as the Covid crisis lead to reduced sales and higher costs.
Still, I think this could be an excellent opportunity to buy the stock. The company’s primary competitive advantage is cost, which could help it gain an edge over competitors in the economic recovery. The organisation also has a relatively robust balance sheet compared to other competitors in the pub sector, another advantage that I believe should help the business outperform in the recovery.
Stock market crash profits
CMC Markets has seen activity on its trading platforms jump this year. This should result in a bumper profit performance for the business in 2020. Analysts are expecting net profit to hit a multi-year high, and earnings per share to surge nearly 60%. Investors could also be in line for a special dividend, equivalent to a yield of 7%, according to current projections.
CMC seems to be one of the handful of businesses that profited from the stock market crash. This could make it one of the best shares to buy right now, in my opinion.
Finally, I’d consider taking a position in Secure Trust Bank. The consumer finance specialist has seen the value of its shares fall by more than 50% this year. This reflects analysts’ outlook that the group could report a loss in 2020.
But profitability is expected to rebound in 2021, and the company could also benefit from the economic recovery. The organisation should be able to leverage its size and relationships with customers to turbocharge growth in the years ahead.
The post Stock market crash: are these the 5 best shares to buy now? appeared first on The Motley Fool UK.
Rupert Hargreaves owns shares in Diageo. The Motley Fool UK has recommended Diageo. 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