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August 16, 2018updated 31 Jan 2022 10:23am

Income stocks top the UK’s 2018 most-bought list

By Priya Kantaria

Lloyds Banking Group leads the top 20 bought stocks in the first half of 2018, as income stocks dominate among investors, according to independent UK retail stockbroker The Share Centre.

The Lloyds group is putting in place plans to improve profitability over the next three years. These involve investing £3bn in digital banking services and improving its insurance, pensions and lending business.

Lloyds also has a share buyback scheme of £1bn, which should reassure investors.

Ian Forrest, investment research analyst at The Share Centre, said it was unsurprising that Lloyds topped the list, “given the group’s long term recovery journey it’s currently embarking on and the accompanying media attention”.

Income stocks a primary concern

Income stocks also lead on the broker’s list, as income remains a primary concern for investors.

“This strategy is common amongst the wider investment community as those approaching retirement age can benefit from income boosting returns and those starting off their investment journey likely include them for the possible effects of compounding,” explained Forrest.

The first five companies on the list come under the top FTSE 100 Dividend Paying Stocks, and Centrica, Imperial Brands and BT also feature because of their good dividend yield.

Investors are adding some risk to their portfolios too, by including smaller AIM companies such as  Sirius Minerals, Amerisur Resources, UK Oil and Gas Investments and Greatland Gold.

“All of these companies continue to be somewhat volatile suggesting that shorter-term investors are being attracted with the hope for quick gains,” said Forrest.

Brexit advice for investors

In the second half of the year, Brexit negotiations are expected to influence investors more.

Forrest said this could lead to a greater need among investors to review and adapt their holdings, to protect themselves from any market correction.

In a survey of 2000 personal investors in June 2018, The Share Centre found that two thirds believe that the lead up to the UK leaving the European Union will have a negative impact on their investments.

Forrest advises investors “not to be too discouraged as a number of opportunities may present themselves over the coming months”.

“As always, we’d encourage investors to diversify and look for a mixture of growth and income across a number of large, mid and small cap companies,” he said.

“Moreover, longer term investors could consider which sectors and which companies may benefit from rising rates given the Bank of England’s base rate rise earlier this month. Assuming a smooth Brexit is agreed then the latest increase should be considered the first step on a gradually rising path to rates around 2%.”

Verdict deals analysis methodology

This analysis considers only announced and completed artificial intelligence deals from the GlobalData financial deals database and excludes all terminated and rumoured deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage.

GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

More in-depth reports and analysis on all reported deals are available for subscribers to GlobalData’s deals database.

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