2 UK shares I’m tipping to soar in the future

2 UK shares I’m tipping to soar in the future


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Let’s be honest, no one can predict the future when it comes to UK shares, or any stocks for that matter.

However, I can use the information readily available to make an informed prediction as to which shares could do well in the future.

Two stocks I reckon will do so are HSBC (LSE: HSBA) and Michelmersh Brick Holdings (LSE: MBH).

I’d buy both stocks if I had some cash to invest today. Here’s why!

HSBC

The Asian-focused banking powerhouse looks like one of the most attractive banking stocks on the FTSE right now.

The £120bn market-cap business has a stellar market position, great presence in over 60 countries, and a solid track record. However, I’m more interested in the future than the past.

HSBC’s access to the lucrative Chinese market is exciting. This region, where the levels of wealth are tipped to grow exponentially in the coming years, is one HSBC where already possesses an established presence. Earnings and returns could soar, in my view.

The obvious risk is of economic difficulty. A prime example of this has been recent growth struggles in the region that has in turn hurt global economic balance and held many markets back. However, this is a cyclical risk I’m willing to live with when it comes to banking stocks like HSBC.

Continuing on with my bull case, the shares offer a very attractive dividend yield of over 7%. For context, the FTSE 100 average is 3.6%. However, I do understand that dividends are never guaranteed.

Finally, the shares look excellent value for money on a price-to-earnings ratio of just 6.9.

Attractive fundamentals, a potentially exciting future ahead, and an established brand and business, what’s not to like?

Michelmersh Brick Holdings

A far cry from the fast-moving world of financial services is Michelmersh Brick Holdings — a business in the game of creating and selling bricks, tiles, and other construction projects.

Michelmersh may not have the brand name and power that HSBC does, but it does have a lot going for it. Firstly, it manufactures its own products, which can help with pricing power and operating costs.

From a future perspective, demand for bricks and construction aggregates is only set to soar, especially in the UK. The housing imbalance, as well as the need to build infrastructure for the rising UK population could catapult Michelmersh’s earnings and returns higher.

Speaking of returns, a dividend yield of 4.7% is attractive. Furthermore, the shares look good value for money on a price-to-earnings ratio of just 11.

The risks for Michelmersh are of economic turbulence from a couple of different ways. The new government spoke of a financial black hole, which could mean infrastructure projects are put on the back burner. Another issue is that of inflation, which could hinder profitability, and demand. These aspects could dent earnings and returns, as well as growth.

Overall, I reckon Michelmersh is a bit of an under-the-radar gem, compared to more established names operating in more so-called glamorous industries.



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