The five UK stocks to consider holding post-Brexit

It’s no secret that UK shares have fallen out of fashion; uncertainty caused by the 2016 referendum has left many investors seeking markets perceived to be more stable than our own.

It means there are plenty of world-class multinational companies operating out of the UK that are available at bargain prices.

And now we know that we will leave the European Union some of the uncertainty that has plagued the UK market for the past three and a half years has gone.

While we still need to agree our future trading relationship with the EU, the truth is a good company is a good company.

We’ve picked out some UK firms we believe can thrive long-term in the post-Brexit world, regardless of the deal struck with our cousins on the continent.

Lloyds Banking Group

Banks have taken a battering since the referendum in 2016 – Lloyds included. In fact, since the vote, Lloyds’ share price is up barely 7.8%[1].

However, from an investment perspective, the bank still has got a lot of things going for it.

For a start, as our largest High Street bank, with more than £200 billion in savings deposits and dishing out more than one in every six mortgages[2] in the UK.

That means it is firmly entwined with the UK economy and, therefore, will benefit if Boris Johnson & co are able to strike a good deal with the EU.

However, even if that doesn’t happen, then Lloyds’ 5.6% dividend yield means it’s still an attractive long-term bet for investors who want to turn their savings into a regular income.

Unilever

You may or may not have heard of Unilever. But you will have surely heard of some of its world-famous brands, such as Hellmann’s mayonnaise, Marmite and Ben & Jerry’s ice cream. And that’s just to name a few.

In fact, the consumer goods giant is so big, it claims its products can be found in nine out of every 10[3] UK homes and reach 2.5 billion people worldwide.

But its dominant presence in the UK is not the reason why we believe it can thrive post-Brexit – the opposite, in fact.

Unilever makes a fraction of its revenue in the UK, meaning it makes the bulk of its money abroad.

For that reason, it doesn’t really matter much how the next phase of the Brexit negotiations go to Unilever as it is a truly global business selling its products in more than 190[4] markets around the world.

Further, it sells things that people need on a daily basis, such as soaps, cleaning products and food, meaning there is always demand for its products. This is proved by the fact its shares are up 25%[5] since the referendum.

AstraZeneca and GlaxoSmithKline

Much like people’s reliable need for Unilever’s kitchen and bathroom goods, the demand is similarly consistent for medicines created by pharmaceutical giants AstraZeneca and GlaxoSmithKline.

And again, like Unilever, these two are multinational firms, meaning they make most of their money in foreign markets. They are insulated somewhat when the UK economy goes through a tough patch.

If that isn’t enough, the share prices of Astra and Glaxo are up 40% and 24%[6], respectively, in the past year alone.

While the past is not an indicator of the future performance, the share price growth of the past year shows both firms can weather uncertainty in their home market.

Persimmon

People always need houses and the truth is we, as a nation, don’t build anywhere near enough of them to keep up with the growing population. That keeps prices high, which is good for the bottom line of housebuilders.

And now the path of the nation has become a little clearer, it may well tempt people back to the housing market.

With a strong pipeline and balance sheet, Persimmon, the UK’s second largest housebuilder, could well profit from any future thawing of the housing market. Plus its shares are up more than 25%[7] in the past year.

JD Wetherspoon

Surely, there is nothing more British than a pub?

Obviously, that’s not all that Wetherspoons has going for it; it has actually performed very well in recent years.

The 900-strong[8] pub chain’s shares are up more than 30%[9] in the past 12 months alone, while its most recent trading update revealed solid sales growth and plans to invest £80 million on new pubs and refurbishments.

On top of that, Wetherspoons has already looked to shelter itself from the worst of Brexit by swapping French champagne and German beers – which might be hit with levies if a trade deal cannot be hammered out – with alternatives from the UK and elsewhere.

Chief executive Tim Martin, himself a staunch Brexit supporter, is convinced this will help the pub chain maintain its operating margins and remain ultra-competitive on price after Brexit.