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Nov. 8, 2021, 9:42 a.m. EST

It’s time to buy U.K. stocks. Here are the 25 stocks to scoop up, says JPMorgan.

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By Barbara Kollmeyer

You’ve been down too long.

That is the latest view from JPMorgan Chase & Co. analysts on U.K. stocks, as the bank ended a longstanding cautious view on the region, upgrading it to overweight. A team led by Mislav Matejka, head of global equity strategy, explained why investors should be ready to take advantage of the fact the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.05% has lagged behind its global peers for six years.

U.K. equities have trailed a cumulative 50% against the U.S. and 24% versus the eurozone since the Brexit referendum in 2016, opening up a record discount both on price to earnings and a price to book basis, said Matejka and the team. That is even after stripping out heavily weighted banks and energy sectors.

And while U.K. equities have historically shown a “clear inverse correlation to bond yield direction,” that is no longer the case. “The 2-year rolling correlation between UK relative performance and bond yields has flipped into positive territory. This suggests that any potential increase in bond yields may not be a constraint for the relative performance of UK equities,” said Matejka and the team

Neither should it be a problem that the Bank of England is also about to start raising interest rates, as increasingly hawkish policy won’t continue to be the case. Also J.P. Morgan sees an easing of pressures over labor supply and power prices, with gas prices down 35% from October highs.

As for their preferences, they are switching a long-held preference for FTSE 250 stocks over the FTSE 100, as they think the latter, with its big representation of exporters, could perform better. And the U.K. offers the highest dividend yield out of all regions, the researchers note.

Here are their top 25 U.K. names: ITV /zigman2/quotes/205378065/delayed UK:ITV +1.62% , WPP /zigman2/quotes/202300097/delayed UK:WPP +0.96% /zigman2/quotes/203813176/composite WPP +0.75% , Babcock /zigman2/quotes/200965934/delayed UK:BAB -0.79% , Lloyds /zigman2/quotes/200709414/composite LYG 0.00% /zigman2/quotes/202285510/delayed UK:LLOY +0.17% , Barclays /zigman2/quotes/208409333/delayed UK:BARC +0.40% /zigman2/quotes/206581728/composite BCS -0.11% , Travis Perkins /zigman2/quotes/200858511/delayed UK:TPK +0.79% , Melrose /zigman2/quotes/210306391/delayed UK:MRO +0.07% , IMI /zigman2/quotes/203470444/delayed UK:IMI +0.55% , Victrex /zigman2/quotes/202943820/delayed UK:VCT -0.06% , Intermediate Capital Group /zigman2/quotes/206004854/delayed UK:ICP +3.00% , Shell , Tesco /zigman2/quotes/203761082/delayed UK:TSCO +0.53% , AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN -0.21% /zigman2/quotes/203048482/delayed UK:AZN -0.21% , Taylor Wimpey /zigman2/quotes/208623755/delayed UK:TW +1.63% , Royal Mail , Glencore /zigman2/quotes/201400686/delayed UK:GLEN -0.24% , DS Smith /zigman2/quotes/208795576/delayed UK:SMDS -0.23% , British Land /zigman2/quotes/210491538/delayed UK:BLND +0.55% , Grainger /zigman2/quotes/203845572/delayed UK:GRI +1.49% , JD Sports /zigman2/quotes/207007202/delayed UK:JD -1.70% , Reckitt /zigman2/quotes/206856088/delayed UK:RKT -1.17% , Imperial Brands /zigman2/quotes/208789104/delayed UK:IMB +0.15% , Britvic /zigman2/quotes/208055220/delayed UK:BVIC -0.33% , BT Group /zigman2/quotes/209006687/delayed UK:BT.A +0.62% and Centrica /zigman2/quotes/205228367/delayed UK:CNA +1.14% .

As for Monday’s action, the FTSE 100 was flat at 7,300, with pharmaceuticals gaining and banks and miners weaker. Travel stocks failed to get a bid from the reopening of trans-Atlantic travel routes for fully vaccinated foreign travelers . Shares of International Consolidated Airlines /zigman2/quotes/208070069/delayed UK:IAG +0.09% fell 2% and easyJet /zigman2/quotes/202825892/delayed UK:EZJ -1.51% shares fell 1.7%.

The British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.1371% rose 0.4% to $1.3548.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,765.15
+4.04 +0.05%
Volume: 568,906
Jan. 27, 2023 4:56p
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/zigman2/quotes/205378065/delayed
UK : U.K.: London
82.94 p
+1.32 +1.62%
Volume: 7.45M
Jan. 27, 2023 4:35p
P/E Ratio
7.10
Dividend Yield
6.03%
Market Cap
£3.27 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202300097/delayed
UK : U.K.: London
946.60 p
+9.00 +0.96%
Volume: 1.33M
Jan. 27, 2023 4:36p
P/E Ratio
16.84
Dividend Yield
3.56%
Market Cap
£10.09 billion
Rev. per Employee
£122,725
loading...
/zigman2/quotes/203813176/composite
US : U.S.: NYSE
$ 58.84
+0.44 +0.75%
Volume: 54,282
Jan. 27, 2023 4:00p
P/E Ratio
15.68
Dividend Yield
3.39%
Market Cap
$12.47 billion
Rev. per Employee
$163,128
loading...
/zigman2/quotes/200965934/delayed
UK : U.K.: London
301.40 p
-2.40 -0.79%
Volume: 463,340
Jan. 27, 2023 4:35p
P/E Ratio
10.53
Dividend Yield
0.00%
Market Cap
£1.52 billion
Rev. per Employee
£141,943
loading...
/zigman2/quotes/200709414/composite
US : U.S.: NYSE
$ 2.60
0.00 0.00%
Volume: 5.06M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
3.88%
Market Cap
$43.71 billion
Rev. per Employee
$378,104
loading...
/zigman2/quotes/202285510/delayed
UK : U.K.: London
52.59 p
+0.09 +0.17%
Volume: 95.80M
Jan. 27, 2023 4:35p
P/E Ratio
N/A
Dividend Yield
4.05%
Market Cap
£35.37 billion
Rev. per Employee
£296,213
loading...
/zigman2/quotes/208409333/delayed
UK : U.K.: London
185.78 p
+0.74 +0.40%
Volume: 17.78M
Jan. 27, 2023 4:35p
P/E Ratio
N/A
Dividend Yield
3.36%
Market Cap
£29.49 billion
Rev. per Employee
£297,978
loading...
/zigman2/quotes/206581728/composite
US : U.S.: NYSE
$ 9.30
-0.01 -0.11%
Volume: 3.17M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
3.28%
Market Cap
$36.44 billion
Rev. per Employee
$380,831
loading...
/zigman2/quotes/200858511/delayed
UK : U.K.: London
1,020.50 p
+8.00 +0.79%
Volume: 620,623
Jan. 27, 2023 4:35p
P/E Ratio
6.97
Dividend Yield
3.77%
Market Cap
£2.13 billion
Rev. per Employee
£241,260
loading...
/zigman2/quotes/210306391/delayed
UK : U.K.: London
144.00 p
+0.10 +0.07%
Volume: 9.24M
Jan. 27, 2023 4:35p
P/E Ratio
N/A
Dividend Yield
1.27%
Market Cap
£5.84 billion
Rev. per Employee
£173,226
loading...
/zigman2/quotes/203470444/delayed
UK : U.K.: London
1,463.00 p
+8.00 +0.55%
Volume: 338,061
Jan. 27, 2023 4:35p
P/E Ratio
18.63
Dividend Yield
1.65%
Market Cap
£3.81 billion
Rev. per Employee
£171,904
loading...
/zigman2/quotes/202943820/delayed
UK : U.K.: London
1,801.00 p
-1.00 -0.06%
Volume: 84,456
Jan. 27, 2023 4:35p
P/E Ratio
20.62
Dividend Yield
3.31%
Market Cap
£1.57 billion
Rev. per Employee
£311,985
loading...
/zigman2/quotes/206004854/delayed
UK : U.K.: London
1,426.50 p
+41.50 +3.00%
Volume: 1.97M
Jan. 27, 2023 4:35p
P/E Ratio
12.92
Dividend Yield
5.79%
Market Cap
£4.02 billion
Rev. per Employee
£1.48M
loading...
/zigman2/quotes/203761082/delayed
UK : U.K.: London
246.90 p
+1.30 +0.53%
Volume: 10.61M
Jan. 27, 2023 4:35p
P/E Ratio
19.99
Dividend Yield
4.68%
Market Cap
£17.91 billion
Rev. per Employee
£183,190
loading...
/zigman2/quotes/203048482/delayed
UK : U.K.: London
10,622.00 p
-22.00 -0.21%
Volume: 1.09M
Jan. 27, 2023 4:35p
P/E Ratio
96.85
Dividend Yield
2.09%
Market Cap
£164.62 billion
Rev. per Employee
£426,154
loading...
/zigman2/quotes/203048482/delayed
UK : U.K.: London
10,622.00 p
-22.00 -0.21%
Volume: 1.09M
Jan. 27, 2023 4:35p
P/E Ratio
96.85
Dividend Yield
2.09%
Market Cap
£164.62 billion
Rev. per Employee
£426,154
loading...
/zigman2/quotes/208623755/delayed
UK : U.K.: London
118.80 p
+1.90 +1.63%
Volume: 7.57M
Jan. 27, 2023 4:35p
P/E Ratio
7.44
Dividend Yield
7.63%
Market Cap
£4.19 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201400686/delayed
UK : U.K.: London
548.20 p
-1.30 -0.24%
Volume: 22.99M
Jan. 27, 2023 4:35p
P/E Ratio
6.03
Dividend Yield
3.84%
Market Cap
£69.78 billion
Rev. per Employee
£1.36M
loading...
/zigman2/quotes/208795576/delayed
UK : U.K.: London
353.70 p
-0.80 -0.23%
Volume: 3.65M
Jan. 27, 2023 4:35p
P/E Ratio
12.96
Dividend Yield
4.58%
Market Cap
£4.87 billion
Rev. per Employee
£275,539
loading...
/zigman2/quotes/210491538/delayed
UK : U.K.: London
441.50 p
+2.40 +0.55%
Volume: 1.30M
Jan. 27, 2023 4:35p
P/E Ratio
7.41
Dividend Yield
5.25%
Market Cap
£4.09 billion
Rev. per Employee
£513,482
loading...
/zigman2/quotes/203845572/delayed
UK : U.K.: London
259.00 p
+3.80 +1.49%
Volume: 748,722
Jan. 27, 2023 4:35p
P/E Ratio
8.39
Dividend Yield
2.31%
Market Cap
£1.92 billion
Rev. per Employee
£833,918
loading...
/zigman2/quotes/207007202/delayed
UK : U.K.: London
161.60 p
-2.80 -1.70%
Volume: 7.90M
Jan. 27, 2023 4:35p
P/E Ratio
25.61
Dividend Yield
0.30%
Market Cap
£8.38 billion
Rev. per Employee
£204,444
loading...
/zigman2/quotes/206856088/delayed
UK : U.K.: London
5,584.00 p
-66.00 -1.17%
Volume: 954,764
Jan. 27, 2023 4:35p
P/E Ratio
13.14
Dividend Yield
3.13%
Market Cap
£39.97 billion
Rev. per Employee
£258,570
loading...
/zigman2/quotes/208789104/delayed
UK : U.K.: London
2,010.00 p
+3.00 +0.15%
Volume: 1.77M
Jan. 27, 2023 4:35p
P/E Ratio
12.20
Dividend Yield
7.02%
Market Cap
£18.74 billion
Rev. per Employee
£658,210
loading...
/zigman2/quotes/208055220/delayed
UK : U.K.: London
761.50 p
-2.50 -0.33%
Volume: 530,190
Jan. 27, 2023 4:35p
P/E Ratio
14.50
Dividend Yield
3.81%
Market Cap
£1.97 billion
Rev. per Employee
£343,369
loading...
/zigman2/quotes/209006687/delayed
UK : U.K.: London
129.90 p
+0.80 +0.62%
Volume: 11.97M
Jan. 27, 2023 4:35p
P/E Ratio
7.57
Dividend Yield
5.93%
Market Cap
£12.89 billion
Rev. per Employee
£212,449
loading...
/zigman2/quotes/205228367/delayed
UK : U.K.: London
99.72 p
+1.12 +1.14%
Volume: 23.69M
Jan. 27, 2023 4:35p
P/E Ratio
N/A
Dividend Yield
1.00%
Market Cap
£5.75 billion
Rev. per Employee
£843,610
loading...
/zigman2/quotes/208070069/delayed
UK : U.K.: London
171.34 p
+0.16 +0.09%
Volume: 14.55M
Jan. 27, 2023 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£8.49 billion
Rev. per Employee
£232,926
loading...
/zigman2/quotes/202825892/delayed
UK : U.K.: London
507.20 p
-7.80 -1.51%
Volume: 4.35M
Jan. 27, 2023 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£3.89 billion
Rev. per Employee
£413,519
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2381
-0.0017 -0.1371%
Volume: 0.0000
Jan. 27, 2023 4:59p
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