Image source: Getty Images
If greener pastures for global markets are around the corner, I want to prepare now. Could these be great stocks to buy for long-term profitability and growth? We'll see.
Construction equipment rental
FTSE 100 giant Ashtead (LSE: AHT) has gone from a humble penny stock to a gigantic beast with a deserved place on the main UK index in my opinion.
However, a couple of weeks ago, a profit warning sent the stock tumbling. The shares are currently trading at 5,076 pence, up 4% over a 12-month period. They were trading at 4,870p this time last year.
Ashtead shares appear to be good value for money with a P/E ratio of 15 currently. This may not be the cheapest. However, when I think about future growth prospects, as well as its position and reach in the market, I think there is an opportunity here.
Construction is a key component for governments to boost economies. Additionally, as the world's population increases, infrastructure spending should also increase. A new infrastructure bill in the US (Ashtead's key market) could help lift the stock to new heights in the long term.
The biggest risk for Ashtead is continued volatility and external events like the Hollywood writers' strike that reduce demand for its products. These types of issues can affect performance and payments.
I would be willing to buy some Ashtead shares if I had some extra cash to invest.
builder
My next choice is Taylor Wimpey (LSE: TW.). The home construction market has been struggling this year due to macroeconomic developments. Rising costs have made construction more expensive and affected completions. Additionally, higher interest rates have made mortgages less affordable and therefore sales have slowed. I will keep an eye on both aspects as ongoing risks.
Despite the problems, Taylor shares have risen 34% in a 12-month period, from 102p this time last year to current levels of 137p.
From a bullish standpoint, the broader housing market should help Taylor stock soar as macroeconomic issues ease. Data shows that housing demand is outstripping supply. Additionally, the stock appears to be good value for money with a P/E ratio of eight. Plus, a 7% dividend yield makes the stock look like a great passive income play. However, dividends are never guaranteed.
I would also be willing to buy Taylor stock for my holdings when I can.
Health properties
My final choice is Primary health properties (LSE: PHP). Set up as a real estate investment trust (REIT), the company must return 90% of the profits it makes from rental income to shareholders.
Please note that tax treatment depends on each client's individual circumstances and may be subject to change in the future. The content of this article is provided for informational purposes only. It is not intended to be, nor does it constitute, any type of tax advice.
Shares have fallen 11% in a year. They are currently trading at 97p, last year they were trading at 107p at this time.
Demand for healthcare in the UK is at an all-time high as migration increases and the general population ages. This should help the company's performance grow and increase payments.
One risk to consider – as well as the reason I think stocks have fallen – is that higher interest rates have hampered the housing market. With higher borrowing costs, growth could be more difficult for the Primary, at least in the short term.
A tempting passive income opportunity with a dividend yield close to 7% is a good reason to plan to buy more shares the next time you can.
