Home Stock Market £500 to invest? 2 cheap UK shares I’d buy to hold until 2032 – The Motley Fool UK

£500 to invest? 2 cheap UK shares I’d buy to hold until 2032 – The Motley Fool UK

by callingemout
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I’m searching for the best cheap UK shares to buy in March. Here are two I’d happily spend £500 on; I think they could make me excellent returns over the coming decade.

The right treatment

The rising pressure on the NHS is encouraging more and more people to seek private healthcare. Data just released by the Institute for Public Policy Research think tank shows that 31% of UK adults struggled to get healthcare access during the pandemic, and that 12% of these people ended up paying for treatment. This equates to a whopping 1.92m Brits.

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The pandemic might be receding but the challenges to receive free healthcare look set to grow. Health secretary Sajid Javid predicts that the current record waiting list of 6m patients will continue growing for the next two years at least. Private medical care providers like Spire Healthcare Group (LSE: SPI), then, can expect demand for their services to continue soaring.

Buy before the surge?

UK shares like this face risks posed by changes in government health policy and an influx of cash to the NHS. But as things are today, the likes of Spire — whose latest financials showed revenues increase 38.9% year-on-year between January and June 2021 (and rise 13.5% from the same 2019 period, too) — can look forward to strong and sustained profits growth.

Indeed, I’m expecting another robust release from Spire when it reports full-year financials tomorrow (Thursday, 3 March). It’s an event I think could spark fresh share price gains (Spire’s already risen 44% over the past year).

At 225p per share, Spire’s share price trades on a forward price-to-earnings growth (PEG) ratio of 0.4. This is well below the widely-regarded benchmark of 1 that suggests a stock could be undervalued. And in my opinion it makes it one of the best healthcare stocks to buy today.

Another cheap UK share to buy

Vistry Group (LSE: VTY) is another low-cost share I believe could be too cheap for me to miss. As well as also trading on a sub-1 PEG multiple (0.6 in this case) this housebuilder offers massive dividend yields. At 7.9% for 2022, this smashes the broader forward average of 3.5% for UK shares.

The Vistry share price has spiked following the release of fresh financials today. The construction giant’s now 10% more expensive than it was 12 months ago. Yet that low PEG ratio shows that it still looks undervalued.

More good news!

On Wednesday, Vistry said that revenues and adjusted profits had rocketed 32% and 140% in 2021. It’s the latest of a string of positive releases as homes demand continued to outpace supply. And it’s a trend the business expects to roll on, too. Vistry says that it expects “a significant step up in profits and returns” in 2022 too and that forward sales are “very strong”.

There’s a risk that Vistry’s sales could suffer badly as Bank of England interest rates rise. But this is a risk I’d be prepared to take given the company’s exceptional cheapness. This is a cheap share which, like Spire Healthcare, I’d buy today to hold onto for the next 10 years.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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