The emergence of Covid-19 triggered a global market meltdown, causing many stocks to lose their intrinsic worth. Many investors saw it as an opportunity to buy in inexpensive, cheap stocks and earn long-term profits, even if it was concerning for the companies.
Investing in low-cost stocks isn’t a new concept. Many legendary investors employ this method to diversify their portfolios with these investments.
The best and promising cheap stocks to buy now UK are discussed in this article. We’ll also show you how to acquire your chosen stocks without paying a commission!
10 Promising Best Cheap Stocks to Buy Now UK
Let’s have a look at our list of the best cheap stocks to buy now UK. The firms listed below are the finest cheap stocks to buy currently in the United Kingdom. We selected some of the best cheap stocks to buy in UK with appealing P/E ratios.
- Aviva plc LON: AV
- Vodafone Group plc LON: VOD
- Taylor Wimpey plc LON: TW
- PayPoint plc LON: PAY
- Sportech plc LON: SPO
- easyJet plc LON: EZJ
- ITV plc LON: ITV
- BP plc LON: BP
- British American Tobacco PLC LON: BATS
- Sage Group PLC LON: SGE
Best Promising Cheap Stocks UK Reviewed
Here is a full review of the promising cheap stocks to buy now UK.
1. Aviva plc
On our selection of the best cheap stocks to buy now in the UK, Aviva plc comes in #1. Barclays increased its price objective on Aviva plc to GBX 505 in September, while maintaining an ‘Overweight’ rating on the stock. The company’s development potential was noticed by the firm’s analyst, who feels it is well-positioned to gain from the UK’s developing insurance market.
Aviva plc is a multinational insurance firm based in the United Kingdom that offers savings, retirement, and insurance services. Due to the global market freeze in 2020, Aviva plc shares plummeted, reaching an all-time low of GBX 231. As a result, the corporation had to reduce its dividend distribution. In 2021, though, it recovered. Aviva plc now pays a 5.20 percent annual dividend of GBX 21 per share.
The trailing-twelve-month P/E ratio of Aviva plc is currently 9.09. The stock has returned 22.55 percent to owners since the beginning of the year, and it has increased by 39.4 percent in the last year.
Also Read About: Best Dividend Stock UK – Guide
2. Vodafone Group plc
Vodafone, like Just Group, is a cheap company to buy when you consider that the stock is now trading at just over 130p per share. Once again, this allows you to establish a big stake and a value investment in the company without having to invest a large sum of money.
Unlike Just Group, however, Vodafone is a well-established firm with a market capitalization of over £35 billion. Vodafone shares have been moving in a flat, sideways trend for the previous few years. The strong rivalry from low-cost telecommunication carriers is to blame for a lot of this.
However, there are multiple reasons why Vodafone is one of the best cheap stocks to buy now UK at current pricing. To begin with, Vodafone is one of the most reliable dividend payers on the London Stock Exchange. In fact, the company’s current yield is little over 6%.The trailing–twelve-month P/E ratio of Vodafone Group plc is currently 7.85.
When you consider the amount of FTSE 100 stocks that have lowered or suspended their dividends as a result of COVID-19’s uncertainty, this is quite significant. Furthermore, and perhaps most importantly, Vodafone is likely to play a key role in the development of 5G technology in the future.
This includes not only the United Kingdom but also a number of European countries. Furthermore, Vodafone has a considerably broader reach than just the UK/EU, thus the benefits of 5g to its bottom line are enormous. The fact that Vodafone still has a little amount of debt on its books is maybe the biggest disadvantage of this cheap stock.
3. Taylor Wimpey plc
Taylor Wimpey plc is a house building firm located in Blackpool that constructs roughly 15,000 homes in the UK each year. On our selection of the best cheap stocks to buy now UK, the company comes in third.
Taylor Wimpey plc had a profitable year in 2020, with revenue of £2.79 billion. Furthermore, after reaching an all-time low of GBX 101.5 in March 2020, the stock has risen 24.9 percent in the last year and is now trading at GBX 149.4. Taylor Wimpey plc pays a GBX 8 per share annual dividend, yielding 5.35 percent and having a dividend payout ratio of 60.15 percent.
Barclays increased its price objective on Taylor Wimpey plc to GBX 205 in August, while keeping its Overweight rating on the stock. The trailing-twelve-month PE ratio for the company is 11.68.
4. Paypoint plc
Paypoint is perhaps one of the best cheap stocks to buy now UK right now in terms of value. For those unfamiliar, the corporation is responsible for the payment system used in thousands of UK retail outlets. Consider supermarkets, convenience stores, gas stations, and shopping malls.
Paypoint makes money by allowing merchants to utilize its technology to process payments. It goes without saying that Paypoint’s lengthy lockout in the United Kingdom has been terrible.
This, in turn, has a direct impact on the company’s stock price. Paypoint stocks were flying high at 965p per share by the end of February 2020. The same stocks were traded at barely 389p just a few weeks later. That’s a massive capitulation of nearly 60%.
Since then, there has been a minor rebound, with the shares currently trading at 580p in February 2021. Paypoint stocks, on the other hand, have a long way to go before returning to pre-pandemic levels. In fact, if and when Paypoint reaches its previous highs of 965p, it will require a 66 percent increase.
Paypoint has no reason to assume it won’t get there, especially since the vaccine deployment in the UK is already in full force. Finally, Paypoint is one of the cheap and best stocks to buy now UK at current levels.
The trailing–twelve-month P/E ratio of Paypoint is currently 7.92.
5. Sportech plc
On our list of the best cheap stocks to buy now UK, Sportech PLC is ranked fifth. A British gaming and entertainment corporation is most recognized for its widely used internet channels, with its tech solutions being used across Europe, North America, and South America. In its interim 2021 report, Sportech PLC claimed a 16 percent increase in its digital platform compared to the same period last year.
Sportech PLC has returned 39.3 percent to shareholders since the beginning of the year, with the stock up 103.3 percent in the last year. The company reported revenue of £13.4 million in the first half of 2021, up from £7.8 million the previous year. The company’s service revenue accounted for £1.9 million of its total revenue. The trailing-twelve-month P/E ratio for Sportech PLC is 3.28.
6. easyJet plc
This low-cost airline from the United Kingdom is a nice cheap stock to examine. Sure, the airline industry as a whole is in bad shape right now, and there’s no way of predicting when global passenger numbers will recover to pre-pandemic levels.
EasyJet appears to be too cheap to pass up at present rates. Before the epidemic, this low-cost carrier was having a tremendous run and was a high yield stock on the London Stock Exchange. Between August 2019 and February 2020, for example, the stocks rose from 887p to 1,500p.
It’s reasonable to believe that, based on the underlying fundamentals, EasyJet’s rising trend would have continued if the pandemic hadn’t occurred. EasyJet shares, like the rest of the airline industry, took a dramatic turn for the worse in March 2020, hitting 52-week lows of barely 410p.
EasyJet stock has rebounded since then, with a price of a little under 900p in February 2021. On the one hand, that’s a staggering return of more than 120 percent in just under a year, which is great news for individuals who bought the stocks during the drip.
EasyJet stocks, on the other hand, still have a long way to go before returning to pre-pandemic levels of 1,500p. This would necessitate a further stock price gain of more than 65 percent. As a result, when you examine the upside possibilities, EasyJet appears to be a bargain.
7. ITV plc
ITV plc a British international media business is seventh on our list of the best cheap stocks to buy now UK. Due to the Covid-related market stifling, the company’s shares plummeted in April 2020, reaching GBX 54.42. The stock, on the other hand, has returned 36.90 percent in the last year and is anticipated to expand by 24.3 percent in the following years.
Morgan Stanley has boosted its price target on ITV plc to GBP 190 while maintaining an Overweight rating. ITV plc announced sales of £2.78 billion in 2020, down 16% from the previous quarter.
ITV plc, which owns 13 of the UK’s 15 regional television licenses, is one of the country’s largest media corporations. The company currently pays a 4.64 percent annual dividend of GBX 5.40 per share. The trailing-twelve-month P/E ratio for ITV plc is 11.47.
8. BP plc
Oil stocks, like airline stocks, took a severe hit during the epidemic last year. This was due to the fact that oil demand in Q2 2020 was practically non-existent. As a result, the price of oil has plummeted to a little under $20 per barrel.
As a result, large oil trading companies like BP have seen their stock prices plummet. BP, for instance, is thought to have a break-even oil price of $35 to $40 per barrel. In other words, BP cannot earn a profit while world prices are below this level.
The good news is that worldwide demand for oil is once again increasing, with prices exceeding $60 per barrel in February 2021. This is good news for oil corporations like BP, who rely on rising pricing to survive. In terms of stock prices, BP fell from 580p to 188p in March 2020, a drop of more than 60% in just a few weeks.
The recovery has been slow, with BP equities trading at over 270p at the time of writing, up 43% from a year ago. However, BP still has a long way to go before returning to its 52-week highs of 580p. In fact, this would necessitate a 114 percent gain.
It’s important to note that BP isn’t the only low-cost stock benefiting from rising oil prices. Rather, the industry frequently moves in lockstep. With this in mind, a basket of oil stocks may be a good way to reduce your risk. Diversifying is straightforward and cost-effective at eToro’s commission-free trading platform, where you only need to spend $50 (about £40) per stock.
The trailing–twelve-month P/E ratio of BP plc is currently 13.99.
9. British American Tobacco PLC
Despite some speculation about the tobacco industry’s demise in the United Kingdom, British American Tobacco plc produced £12.8 billion in revenue in the first half of 2021, outperforming predictions by £40 million. The company’s EPS of £1.58 outperformed the market by £0.01. It is ranked ninth on our list of the top cheap stocks to purchase right now in the United Kingdom.
British American Tobacco plc is a British cigarette maker that sells nicotine products as well as cigarettes and tobacco. With roughly 19.3 million shares worth $759 million, Orbis Investment Management is the company’s largest stakeholder. Furthermore, 12 hedge funds tracked by Insider Monkey own shares in British American Tobacco plc, down from 14 in the previous quarter. These interests are worth more than $1 billion.
Morgan Stanley raised its price objective on British American Tobacco plc to £3,210 in August, with an Overweight rating on the stock, citing the company’s core products in the face of rising consumer demand. The corporation provides a £2.12 per share yearly dividend, yielding 0.08 percent. The trailing-twelve-month P/E ratio for British American Tobacco plc is 9.69.
10. Sage Group PLC
Sage Group is the second-largest technology company in the United Kingdom, providing accounting and salary-management software to businesses across the country. With Amazon Web Services and other cloud computing providers vying for Sage’s business, much of the company’s activities are now hosted in the cloud. Despite the recent drop in the stock price, there are still reasons to remain positive.
To begin, Sage has a subscription-based business model with strong customer retention, ensuring that the company maintains a stable income level month after month. Between January and September 2021, recurrent revenue climbed by 5%, with a 7% growth in recurring revenue from the United States. Sage’s development goals are highlighted by the fact that the company has traditionally dealt with British and European clients.
Furthermore, the stock price of Sage does not appear to be very volatile, possibly because the company’s products are always in demand, regardless of economic situations. Finally, Sage delivers a 2.36 percent dividend yield, which is paid twice a year. Overall, if you’re searching for a low-volatility stock that pays a stable dividend, Sage is a good choice.
The trailing–twelve-month P/E ratio of Aviva plc is currently 29.07.
Best brokers to buy cheap stocks in UK
You’ll need to select a good stockbroker once you’ve decided which cheap stocks you want to buy. The broker must not only offer your preferred shares but also at a reasonable commission.
You should also consider criteria such as legislation, supported payment methods, and the needed minimum investment.
To guide you on the right path, we’ve listed the top two trading platforms that provide some of the best cheap stocks to buy now UK.
eToro is a well-known online stock broker that offers over 2,400 shares from 17 different exchanges. In fact, the platform enables you to purchase all of the greatest low-cost stocks featured on this page.
eToro, as we briefly said previously, is a commission-free broker. This implies you won’t have to pay any share dealing costs to buy the equities you want. This is true not only for stocks listed in the United Kingdom but also for those listed elsewhere. This means you won’t have to pay a foreign exchange fee whether you buy Verizon or Goodyear.
Additionally, if your cheap stocks are listed on the London Stock Exchange, you will avoid paying the regular stamp duty tax of 0.5 percent. Because eToro pays the tax, the site is undoubtedly the cheapest broker for accessing the best cheap stocks to buy now UK. eToro is popular because it allows you to buy fractional shares in addition to providing a low-cost entry into the global stock markets.
This implies you can acquire a portion of a share of stock as long as you spend at least $50. For instance, if a stock is valued at $200 and you invest $50, you will own 25% of one share. You may copy an experienced eToro investor like-for-like with its Copy Trading tool. There are no commissions or fees, and a $50 minimum investment is required.
You shouldn’t be worried about safety if you’re unfamiliar with eToro. The FCA, ASIC, and CySEC all regulate this broker, which today has over 17 million investors. The FSCS scheme also protects your funds. You can finance your account with eToro with a UK debit/credit card, e-wallet, or bank wire. The process can be completed online or using the eToro investment app, which is accessible for iOS and Android smartphones.
- Online trading platform that is extremely user-friendly
- Invest in equities without having to pay a commission or share dealing fees.
- Trade CFDs on stocks, indices, commodities, currency, and other assets.
- There are almost 2,400 stocks listed on the UK and worldwide stock exchanges.
- There are more than 250 ETFs available.
- Copying other users’ deals are possible.
- Protections under the FCA and the FSCS
- Not recommended for advanced traders who enjoy performing technical analysis.
Capital.com is a CFD broker that trades over 3,000 stocks from the United States, the United Kingdom, and Europe. Capital.com does not charge any commissions, and the site has some of the lowest spreads we’ve observed in the UK. There are no fees for deposits, withdrawals, or inactivity, so you won’t be surprised by charges in your account.
Beyond stock CFDs, Capital.com offers a wide range of assets to trade. Over 140 currency pairings, 84 cryptocurrencies, and dozens of commodities, ETFs, and stock indices are available to trade.
Capital.com’s proprietary trading platform, which is available on the web and on mobile devices, is a key part of what sets it distinct. You have access to dozens of technical indicators as well as charts that are extremely user-friendly. Capital.com also has a TradingView integration, which allows you to set custom indicators to analyze market movements. Better yet, Capital.com’s technology uses artificial intelligence to track patterns in your trades and recommend strategies to enhance your win rate.
There are dozens of videos and tutorials available that will lead you through the fundamentals of CFD trading and explain common trading methods. The platform even offers a specialized education mobile app that includes quizzes to assess your trading expertise.
The FCA and CySEC oversee Capital.com (the Cyprus Securities and Exchange Commission). The brokerage provides customer service via phone, email, and live chat 24 hours a day, seven days a week, making it simple to fix any concerns you may have with your account. Capital.com requires only a £20 deposit to start an account, and you can fund your account using a credit card, debit card, or bank transfer.
- CFD trading is completely free of commissions.
- Over 3,000 shares from the United States, the United Kingdom, and Europe
- Trade forex, commodities, cryptocurrencies, and other financial instruments.
- Technical analysis trading platform with a lot of power
- Customer service is provided 24 hours a day, 7 days a week and is regulated by the FCA and CySEC.
- Only CFDs are allowed.
- For stock trading, there is a limit to the amount of leverage you can use.
How to Buy Cheap Stocks in UK
Are you ready to buy low-cost stocks in the United Kingdom from the comfort of your own home? If so, top-rated FCA broker eToro can help you complete the process in just 10 minutes. Plus, you won’t have to pay any commissions, whether the cheap goods are from the UK or from another country.
To acquire shares with eToro right now, follow these steps:
Step 1: Open an Account
To get started, click on the eToro website and create an account. Personal information is required, as it is for any other FCA-regulated share dealing platform. Your name, address, birth date, and contact information will all be included. Your social security number will also be required.
You will next be prompted to upload a copy of your passport/license driver’s as well as proof of address. You can either upload the document from your computer or take a clean image with your phone.
eToro should be able to validate the documents within a minute, which means all deposit/withdrawal limits will be lifted!
Step 2: Make a Deposit
It’s easy to make a deposit at eToro. With your UK debit/credit card or an e-wallet like Paypal, Skrill, or Neteller, you can accomplish this instantaneously.
Step 3: Search for Cheap Stocks
If you’ve read our guide to the best cheap stocks to buy now UK, you’ve probably already decided which stocks to buy. If that’s the case, simply look for the stock at the top of the page. In the example below, we’re looking for cheap Aviva plc stock.
If you want to see what cheap stocks eToro supports, go to the left side of the dashboard and click the ‘Trade Markets’ button. You can narrow down the results by selecting the appropriate exchange or sector after clicking the ‘Stocks’ button.
Step 4: Buy Cheap Stocks
The final step in the procedure is to fill out an order form. The ‘Trade’ button next to the cheap stock you want to buy will automatically populate on-screen as soon as you click it.
Then, in the ‘Amount’ box, enter the amount of your investment. The minimum investment is $50, but you can invest as much as you like.
Finally, click the ‘Open Trade’ button to acquire a cheap stock without paying a commission!
When a company’s share price is lower than its perceived, inherent value, you can invest in it. Finding the greatest cheap stocks for your financial goals is, of course, the most difficult aspect.
Because of COVID-19’s impact on the industry, the stock in question may be undervalued. Alternatively, the stock may have a low P/E ratio, indicating that the company is undervalued.
In any case, you must find a reputable and low-cost UK broker to enable your low-cost stock investing.
We discovered that eToro is the greatest platform for this, as the broker gives a 0% fee on all of the cheap stocks discussed on this page, as well as no UK stamp duty tax.