2 cheap UK shares I’d buy today for the stock market recovery

first_img Image source: Getty Images Roland Head | Sunday, 7th February, 2021 | More on: BEZ BT-A Our 6 ‘Best Buys Now’ Shares I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Simply click below to discover how you can take advantage of this. 2 cheap UK shares I’d buy today for the stock market recovery Enter Your Email Address Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.center_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! The FTSE 100 is up by 30% from the lows seen in March 2020. But the market is still down nearly 15% on a year ago. Today, I want to look at two UK shares I’d considering buying now for my long-term portfolio.6% dividend promiseOne stock that’s caught my eye after a solid trading update last week is BT Group (LSE: BT-A). Boss Philip Jansen shocked investors by cancelling the group’s dividend earlier this year, but I think this experienced manager is making the right moves.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Jansen plans to reinstate BT’s dividend during the next tax year, which starts in April. In the meantime, he’s using the extra cash to make much-needed investments in modernising BT and accelerating the group’s network upgrades.Progress is being made. BT says the rollout of its fibre-to-the-premises (FTTP) network is now passing 42,000 units per week. The end goal is to retire copper telephone lines in many areas and provide fibre-only internet access. This process will open the door to much higher internet speeds.The 5G mobile rollout is also continuing. BT says its EE network offers coverage in more places than any other operator.Meanwhile, management’s guidance suggests the shares should offer a 6% dividend yield when the payout restarts later this year. That’s tempting, in my view. But should I buy this UK share?It’s a tough marketThe Covid-19 pandemic has stopped people travelling, hitting income from mobile roaming charges. That should pass, but I can see other more permanent risks.One problem is that competition is tough. Most network operators offer similar services, so price matters. BT says average revenue per customer fell by around 6% last year, in both mobile and broadband. Returning to growth might not be easy.However, this popular UK share now trades on just six times forecast earnings, with a potential yield of 6%. At this level, I see BT as a recovery play I’d be happy to consider.This UK share looks too cheap to meShares in commercial insurer Beazley (LSE: BEZ) rose by 15% on Friday morning after the company’s 2020 results came in ahead of expectations.Covid-related claims pushed Beazley to a loss of $50.4m last year. However, this was smaller than the $100m loss forecast by analysts.Results this year are expected to improve significantly. Beazley’s management says it’s pricing insurance renewals at 15% above last year’s levels. Rate rises are normal after a disaster and should support 2021 profits. But I can still see a couple of potential risks.The first is that the group still has some “longer tail liability classes” which will see Covid-related claims “from 2021 onwards.” We don’t yet know how big these claims will be.A second concern is that, like most insurers, Beazley invests its premium cash to try and boost returns. The firm achieved an impressive investment return of 3% last year by profiting from the rapid market recovery.Market conditions might be tougher in 2021 and investment returns could be lower. That could make a big difference to future profits.Would I buy Beazley? Yes. The company had a good track record of growth before 2020. And I expect a strong result in 2021. Even after Friday’s gain, this UK share is trading on just 12 times forecast earnings. A dividend is expected in 2021 too. “This Stock Could Be Like Buying Amazon in 1997” I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. See all posts by Roland Headlast_img

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