2 top UK stocks to buy and hold for the next decade

September 15, 2021 0 Comments

Hunting for the top UK stocks is a mission not everyone wins. But there always are some extraordinary players who have their facts straight and reap the benefits. Following the footsteps of Warren Buffett, I hunt for companies with long term growth at reasonable prices.

Personally, I believe the UK stock market offers some exciting long-term investment opportunities. And I’ve used these to assemble a shortlist of my picks for the top UK stocks to buy and hold for the next decade. Let’s take a look.

A top UK stock in the pharmaceutical industry

Covid-19 has given a huge boost to the medical industry. Due to the increased demand for vaccines and the introduction of new drugs, AstraZeneca (LSE:AZN) is one of my top UK stocks today.

Unlike other leading drug makers, AstraZeneca’s revenues mainly originate from its cancer treatments. In fact, according to the latest earnings report, these drugs contributed 41% of revenues. By comparison, their Covid-19 vaccine only contributed 7.5%. Why does this matter? Because it confirms that the company is not dependent on pandemic-related drugs that will see reduced demand over the long term. At least, that’s how I interpret these numbers.

Having said that, the firm has been a prolific distributor of its Covid-19 vaccine. Around one billion vaccines have been distributed, with more expected throughout 2022. 

What’s more, the acquisition of Alexion is expected to lead the company towards industry-leading growth. Alexion is known for developing life-transforming therapeutic products. Not just this, with the expansion in immunology and rare diseases, the expected long-term growth of AstraZeneca is an encouraging sight in my eyes.

Needless to say, this is all quite positive. But the business from risk-free. Drug development is filled with uncertainty and challenges due to the complex process of bringing a new drug to the market. Even large pharmaceutical companies can spend vast resources on a new treatment that never receives regulatory approval. Or even if it does, there is always the possibility that health insurance companies refuse to cover the patient’s cost making the drug economically unviable.

Despite these risks, analyst’s have forecast the earnings-per-share to rise to $5.40. And with its rising presence within the pharmaceutical industry, AstraZeneca looks like it will continue leading the charge over the next 10 years. That’s why it’s one of my top UK stocks.

The soaring tobacco industry

Imperial Brands (LSE:IMB) made the news after boosting dividends to an expected 8.7% yield this year. This is one of the reasons why it made it onto my top UK stocks list. Being the fourth-largest tobacco company in the world, it has a remarkable brand portfolio. Which include Golden Virginia (the world’s largest-selling hand rolling tobacco), Drum (the world’s second-largest-selling fine-cut tobacco), and Rizla (the world’s best-selling rolling paper), amongst others.

Since the start of the current year, new strategic changes are driving the group towards new directions. On this route, the tobacco maker is still focusing on the sale of its combustible products. But more emphasis is being placed on developing next-generation products, liking vapourisation devices.

Vapour products are considered a less harmful alternative to smoking. But there is still ongoing research regarding the health impact of inhaling nicotine. Over the long term, I believe these products will give the firm a leading edge over its competitors. However, it will always be exposed to regulatory risk. Today, new restrictions on nicotine levels are already being discussed. Given this substance makes these products so addictive, it could disrupt the volume of sales in the future. But personally, I believe Imperial Brands can adapt to the shifting regulatory environment. And that’s why it’s on my top UK stocks list.

Final thoughts

Both these companies have a promising future, in my opinion. That’s why these are top UK stocks in my mind, and so, I plan on adding them to my portfolio as long-term investments.

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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.

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