The stock market has been weak for so long now that’s it’s time for me to search for top UK shares to buy and hold for August and beyond. There’s a good chance valuations have been driven down leading to some stocks looking attractive.
Fast-moving consumer goods
Right now, for example, I like the look of smoking products maker Imperial Brands (LSE: IMB). In May, with the half-year report, chief executive Stefan Bomhard was upbeat. He said the company was 18 months through its five-year strategy aimed at creating “consistent” growth. And he is “pleased” with the company’s progress
And now, with the share price near 1,850p, the forward-looking dividend yield is almost 7.8% for the trading year to September 2023. Of course, a company can always miss its estimates. And it’s worth me remembering that tobacco and cigarette volumes are in long-term decline. On top of that, the industry faces intense regulatory scrutiny at times.
However, Imperial is working hard to develop its business in new generation products that are less harmful to health. And I think the dividend yield is attractive.
Telecommunications
I also like telecommunications and mobile money services provider Airtel Africa. As the name suggests, the company’s operations are in Africa. In July, the quarterly update trumpeted “double-digit revenue growth, margin and earnings progression, and further strengthening of our balance sheet”.
Chief executive Segun Ogunsanya said the company is targeting growth “ahead of the market” this year. He reckons the business has “attractive” opportunities for sustainable and profitable long-term growth. And that’s because the market is “underpenetrated” for mobile voice, data, and mobile money services.
Earnings appear to be growing by double-digit percentages each year. However, the business was loss-making as recently as 2018. And there’s always the risk that operational challenges could derail the pace of growth in the years ahead.
Nevertheless, City analysts predict some generous hikes in the dividend ahead. And with the share price near 153p, the forward-looking yield for the trading year to March 2024 is a chunky 4.9%.
Mining industry services
Finally, I like mining services company Capital (LSE: CAPD). In July, the company delivered a robust second-quarter trading update. The directors said the business had seen “extremely strong” demand and the outlook is “supportive”.
It’s worth me remembering that Capital serves a cyclical industry. And in any downturn, volumes and profits could plunge. However, there’s no sign of weakness at the moment. City analysts predict a rebound in earnings of around 35% in 2023. And they think the dividend will rise by double-digit percentages this year and next.
Meanwhile, with the share price near 94p, the forward-looking yield for 2023 is just above 5%. I see that as attractive and feel the recovery in the business may have much further to go. I’m prepared to hold on to my Capital shares until well beyond any near-term recession that may affect the world’s economies.
