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Paul Summers: Burberry

For those willing to stick with stocks through tough times, I think FTSE 100 luxury goods firm Burberry (LSE: BRBY) is worthy of consideration. Its shares have inevitably dipped on fears surrounding the impact of the coronavirus on trading in China following management’s decision to close a third of its stores in the country.

While the stock could certainly have further to fall, I don’t see anything to suggest the long-term outlook has changed. Burberry remains a high-quality business that, aside from its highly coveted brand and growth potential in developing markets, generates consistently excellent returns on capital employed (a metric favoured by Warren Buffett) and boasts a strong balance sheet.

Given ongoing consolidation in this part of the market, I think it’s also a potential bid candidate. 

Paul Summers owns shares in Burberry

Kevin Godbold: Britvic

At the end of January, soft drinks producer Britvic (LSE: BVIC) said it had enjoyed a “robust” start to the year and was “confident” of achieving expectations for the full year. City analysts expect earnings to slip by around 10% in 2020, but the dividend should rise by a single-digit percentage with backing from the firm’s steady cash flow.

I reckon Britvic is a defensive stalwart with an enduring business bolstered by strong brands. As such, I see the recent bout of weakness in the share price as an opportunity to pick up some of the shares. The stock has been recovering since January and I’d hop aboard the rising trend for March and beyond.

Kevin Godbold does not own any shares in Britvic.

Royston Wild: The Gym Group

Fitness centre operator The Gym Group (LSE: GYM) put out a strong set of trading numbers back in January. Then it advised that, thanks to near-15% rise in membership numbers, revenues in 2019 boomed by almost a quarter from a year earlier to £153.1m.

The personal fitness market is increasingly big business. And the low-cost segment — one in which The Gym Group is a major player — is the most explosive part. I’m expecting the business to report a strong start to 2020 when it releases its preliminaries on Thursday, March 19, which in turn could drive fresh share price gains.

City analysts expect earnings at the firm to balloon 24% in 2020. I wouldn’t be shocked to see its record of annual double-digit-percentage increases persist well into the new decade, either.

Royston Wild does not own shares in The Gym Group.

Edward Sheldon: Hargreaves Lansdown

My top stock for March is online broker Hargreaves Lansdown (LSE: HL).

Hargreaves Lansdown shares are a little out of favour right now due to the role the company played in the Woodford Equity Income fund debacle. The fact that co-founder Peter Hargreaves sold £550m worth of shares last month won’t have helped investor sentiment.

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However, the long-term investment case here remains attractive, to my mind. Britons desperately need to save and invest more for retirement in the years ahead, and as the market leader in the investment space, Hargreaves looks well placed to prosper. With the stock down around 30% from its 2019 highs, I believe now is a good time to be building a position.

Edward Sheldon owns shares in Hargreaves Lansdown.

G A Chester: Capital Gearing Trust

The experiment of persistent stimulative monetary policy since the financial crisis has undoubtedly distorted asset prices. I think it’s become difficult to be confident about which ‘cheap’ but structurally or cyclically challenged companies are truly cheap. Equally, which ‘expensive’ but quality businesses are really worth their premium valuations.

I view Capital Gearing Trust (LSE: CGT) as a good sleep-easy buy. It’s currently defensively positioned, with 34% exposure to equities, and substantial holdings in cash and index-linked government bonds.

Over two decades, it’s achieved more than double the annualised return of the UK equity market. And it’s done this with a worst-case fall in value of 9% versus the market’s 41%.

G A Chester has no position in Capital Gearing Trust.

Tezcan Gecgil: Royal Mail

My top choice for March is Royal Mail (LSE: RMG), a contrarian investment that may take several months to pay off.  In May 2018 the share price peaked out at over 630p. As a series of problems have dragged on the company’s performance, RMG stock is now hovering around 178p.

Although there are plenty of negative headlines on the group, I believe a large amount of bad news has already been priced in. So now may indeed be a good time to buy while sentiment is so poor towards the business.

‘Passive income’-seeking investors might be interested to know that in May 2019, management cut the annual dividend from 25p to 15p per share. Thus, I deem this as largely a growth opportunity for contrarians.

Tezcan Gecgil does not own shares in Royal Mail.

Roland Head: British American Tobacco

Tobacco stocks have been through a rocky patch over the last couple of years. But I think it’s fair to say that British American Tobacco (LSE: BATS) is coming out of the other side of this difficult period in fairly good shape.

The group’s most recent trading update confirmed market share gains and “a strong financial performance on an adjusted basis”. This suggests to me that profits for 2019 should be comfortably in line with City forecasts.

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BAT has a strong portfolio of cigarette brands and continues to generate plenty of surplus cash. The forecast dividend yield of 6.3% looks safe to me. I see the shares as a buy.

Roland Head does not own shares in British American Tobacco.

Rupert Hargreaves: Rightmove 

Rightmove (LSE: RMV) is one of the UK’s top tech stocks. And no matter how badly the global economy is affected by the coronavirus outbreak, the firm should continue to provide a haven for investors in stormy waters.

Property prices across the UK have jumped since the general election in December, and this has inspired a wave of buying and selling activity. As the most visited property website in the country, Rightmove should benefit disproportionately from this movement.  

As such, now could be an excellent time for investors to snap up shares in this tech giant. A rising dividend payout, as well as share buybacks, only sweeten the appeal. 

Rupert Hargreaves does not own shares in Rightmove.

Tom Rodgers: Direct Line

Direct Line Insurance (LSE: DLG) now boasts a huge 6.5% yield at the time of writing. The FTSE 250 giant has a solid track record of improving dividend payouts in five of the last 10 years, and with CEO Penny James being allowed to make her mark, I think the future looks bright for the business with the iconic red telephone. Investors will pay a very cheap 10 times future earnings multiple, putting it right at the top of my list for long-term buys. 

Tom Rodgers has no position in Direct Line.

Matthew Dumigan: Bellway

In December, house prices rose for the first time in two years! The prospect of a settled economic outlook has calmed buyer’s nerves and caused prices to increase by 2.2% in December, up from 1.3% in November.

This signals great news for all UK house builders, but I specifically like the look of Bellway (LSE: BWY). As one of the UK’s largest property developers, Bellway’s share price has continually increased in tandem with its profits.

The company boasted an 8.6% increase in revenue and a 3.4% increase in profit before taxation for the year 2019. Combine this with the positive outlook in the property market for the UK, and I think the share price will continue to rise.

Matthew Dumigan does not own shares in Bellway.

Kirsteen Mackay: Primary Health Properties

With the coronavirus outbreak (COVID-19) unsettling financial markets around the world, I expect this trend to continue into March. My stock of choice for the coming month is Primary Health Properties (LSE:PHP) a FTSE 250 stock with no obvious reliance on China.  

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Primary Health Properties invests in healthcare real estate and has a property portfolio of over 480 primary healthcare facilities with 99.5% occupancy.

The PHP share price is up almost 35% in the past year and it offers investors a 3.7% dividend yield. With its close ties to NHS organisations, pharmacies and dentists, I think this stock will continue to move in the right direction.

Kirsteen does not own shares in Primary Health Properties.

Jonathan Smith: Rio Tinto

Whilst the frequent volatility with the Rio Tinto (LSE: RIO) share price may scare away some investors, I believe it is a ride worth staying on for the foreseeable future. 

With a dividend yield of just over 6%, the income coming from dividends is enough to encourage buying in at current levels

I’m expecting full year results to be strong given the massive beat in mid-year results, which showed the largest profit since 2014. 

High iron ore prices are enabling the business to perform well – after all, 50% of the firm’s revenue comes from this source. 

Jonathan Smith does not hold any shares in Rio Tinto.

Manika Premsingh: Diageo

When the overall market is weak, the best performing stocks are available at a discount. A case in point is the FTSE 100 alcohol producer Diageo (LSE: DGE). There’s little not to like about it. 

As a consumer defensive stock, its demand remains stable irrespective of economic conditions. It’s seen an enviable upward pointing price graph in the past decade. Further, DGE’s financials are healthy and its price-to-earnings (P/E) ratio at 23.6x makes it relatively affordable. With uncertainty in global markets likely to persist in the foreseeable future, I reckon there will be opportunities to buy DGE in March as well.

Manika Premsingh has no position in Diageo.

The post Top UK shares for March appeared first on The Motley Fool UK.

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The Motley Fool UK owns shares of and has recommended Britvic. The Motley Fool UK has recommended Burberry, Diageo, Hargreaves Lansdown, Primary Health Properties, Rightmove, and The Gym Group. 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