Searching for the top UK stocks can be quite a challenging task. But with the pandemic slowly coming to an end, there seem to be several growth opportunities.  

The Bank of England has estimated the UK’s economy to have a strong growth in 2021. According to its forecasts, the economy is bouncing back from the lows experienced during the pandemic. I think this is why the performance of the London stock market has been impressive this year. All the major indices are up since the start of 2021. Year to date, the FTSE 100 is up about 6%, FTSE 250 is sitting at around 11%, while the FTSE All-Share stands at 8%. But among all the UK stocks in these indices, there are two which are my top picks for my portfolio. Let’s take a look.

Top UK Stock #1: Aviva Plc

The Aviva (LSE:AV) share price has had a good run over the past year. If I had invested in Aviva a year ago, I would have made a return of about 40%. This year alone, it has made a return of about 19%. This is quite impressive when comparing to the previously mentioned performance of the FTSE 100.  

Aviva is a leading savings, retirement and insurance business, with about 31.6 million customer base. The company claims to be the number one provider for general insurance and Workplace Pensions. And it’s in the top three for annuities, equity release, as well as protection & health insurance within the UK. 

Based on today’s share price, Aviva has a market capitalisation of around £15.14bn. And when comparing that to its £16.9bn in cash on the balance sheet, its shares look pretty cheap in my eyes. That’s one of the reasons why it’s on my top UK stocks list. However, there are some risks to consider.

Aviva is far from the only player in its space. And the firm has to contend with fierce competition from the likes of Virgin Money, Aegon and Prudential. It’s also worth noting that running an insurance business can be quite tricky. Suppose it doesn’t correctly assess its customers or fails to retain a workforce with the right know-how. In that case, profitability may begin to suffer.

Top UK Stock #2: Reach Plc

The Reach (LSE:RCH) share price is up about 437% over the past year. That makes it one of the best-performing stocks on the London Stock Exchange. Since the start of 2021, it’s up about 139%. Needless to say, If I had invested this top UK stock a year ago, I would be significantly wealthier today. So what is this business?

Reach is a leading commercial national and regional news publisher. The media company produces and distributes content through newspapers and other associated digital platforms. 

In its recently released 2021 half-year results, the company’s group revenue was only up by 2.6%. That’s hardly worthy of the stellar performance achieved by its stock price. So what happened? While its printed newspaper sales continued to decline by 5.2%, the firm’s digital revenue stream grew by 42.7%. This, in turn, enabled its operating profits to increase by 25.5% to £68.9m (ignoring the effects of one-time expenses).  

That’s not a bad performance at all, in my opinion. Hence why it’s my second top UK stock. But like all businesses, Reach has some risks to consider. Newspapers continue to be a significant source of income for this business. But with the world receiving all their news through smartphones, computers and tablets, this part of the industry is getting smaller and smaller each year. The management team have done a decent job to migrate its reader base onto its digital offerings so far. However, there is no guarantee that this success will continue moving forward. And with so many other online media companies to deal with, like Newsquest Media Group and Future, its prominent position may begin to waiver. 

Is now the time to buy?

Aviva and Reach have both had impressive performances over the past year. Past performance is not an indicator of future performance. And both firms have threats to overcome moving forward. However, despite these risks, I feel that these businesses can keep growing. Therefore, I would consider adding them to my portfolio today.