A darling of the high street, Greggs (LSE:GRG) shares have rocketed since its 1984 IPO, soaring over 3,000%. There’s been more turbulence over the past five years, with peaks and troughs in that time.
Still popular among investors today, five of Fool.co.uk’s free-site writers have put forward alternative British-based stocks for investors to consider…
AG Barr
What it Does: AG Barr is a drinks company. It’s best known for Irn Bru, but has recently acquired Boost! product range.
By Stephen Wright. The AG Barr (LSE:BAG) share price has been up and down recently. But when it’s down – ideally somewhere near the 600p mark – I like it a lot better than I like Greggs shares.
Put simply, I think I can see better growth prospects for the maker of Irn Bru than I can for the business that sells sausage rolls. The key is its recent acquisition of Boost Holdings.
AG Barr has been working to integrate the business over the last couple of years. And I expect the expansion in margins that has already begun to carry on from here.
With Greggs, I think the future is less clear. Recent growth has been largely driven by new store openings and I’m uncertain as to how long this can continue.
Inflation is a risk for AG Barr – higher packaging costs creates a challenge for expanding margins. But from an investment perspective I prefer it to Greggs at the moment.
Stephen Wright does not own shares in any company mentioned.
Associated British Foods
What it does: Associated British Foods is a highly diversified group, with a range of food, ingredients and retail businesses.
By Andrew Mackie. Greggs might have carved itself a unique position on the high street, but I much prefer FTSE 100 stalwart Associated British Foods (LSE: ABF). And believe it or not, it also has a bakery division, through its leading Kingsmill brand.
The beauty about the company is its unique diversified business model. Most individuals associate it with just retail, through its ownership of Primark. But its way more than that. A motley collection of different businesses makes it extremely resilient during the course of the business cycle.
At the moment, the high street is struggling. Primark isn’t immune to that. Consumers are cautious with shrinking disposable incomes. But unlike one trick pony Greggs, revenues have been increasing in its ingredients segment, which include speciality enzymes used in manufacturing and pharmaceuticals.
I accept that its share price has hardly been a star performer measured over years. But viewed over 20 plus years, it’s been a multi-bagger. And that doesn’t include the handsome dividends along the way. I have been a part owner for years, and will be for many more to come.
Andrew Mackie owns shares in ABF.
Barclays
What it does: Barclays is a well-known Tier 1 bank, serving both private and corporate clients across the world.
By James Beard. Although I’m a fan of Greggs, I believe the baker’s scope for future growth is limited, primarily due to its 100% domestic focus.
I prefer Barclays (LSE:BARC), which earns 48% of its revenue from outside the UK. Its global reach helped increase the group’s 2024 post-tax earnings by 19.4%.
I also think the global demand for banking services is likely to outstrip that for pies and sausage rolls.
However, banking stocks can be volatile. And (unlike me) Barclays’ directors seem to prefer share buybacks to dividends. Its sub-3% yield is a little disappointing.
But the bank’s targeting an increase in its return on capital from 10.5% (2024), to 12% (2026). Also, analysts are forecasting a 42% rise in earnings per share over the same period. With a forward price-to-earnings ratio of around six, the stock looks cheap to me.
For these reasons, I’m happy to have Barclays in my portfolio.
James Beard owns shares in Barclays.
Coca Cola HBC
What it does: Coca Cola HBC is a bottling partner for Coca-Cola, producing and selling drinks across 28 markets in Europe, Africa, and Eurasia.
By Ben McPoland. While Greggs has a strong brand and position in the UK, it only operates on these shores. Therefore, it’s fully exposed to the UK economy, which is beset by low growth and high inflation.
In contrast, Coca Cola HBC (LSE: CCH) from the FTSE 100 operates in various international countries, selling brands like Coca-Cola, Fanta, Schweppes, Sprite, and Monster.
These markets include established ones like Greece, developing economies such as Poland, and emerging markets like Nigeria and Egypt. In my eyes then, the company has higher future growth potential than Greggs.
In 2024, organic net sales rose 13.8% year on year to €10.7bn, while organic operating profit was up 12.2% to €1.2bn. The dividend was hiked 11% to €1.03 per share, with the well-covered forward yield sitting at 2.9%.
A spike in inflation is a risk, as this could see people downtrading from branded drinks. A boycott of US brands from Muslim consumers in Egypt and Bosnia is also worth watching.
Long term however, I think this reasonably-priced stock will continue to do well (it’s up 35% in a year, as I type).
Ben McPoland owns shares in Greggs and Coca Cola HBC.
TP ICAP
What it does: TP ICAP is a global interdealer broker that facilitates trades in financial, energy, and commodities markets.
By Mark Hartley. TP ICAP (LSE: TCAP) acts as an intermediary between financial institutions, such as investment banks and hedge funds. It helps organisations execute transactions in products like bonds, derivatives, foreign exchange and commodities.
It generates revenue primarily through commissions on trades, leveraging market volatility to its benefit. Consequently, revenue declines during periods of low trading volume, which can hurt the share price. It’s also at the whim of increasingly strict financial regulations, which could lead to costly business adaptations and revenue loss.
To meet this demand, it’s recently expanded into electronic and data-driven services, making it better positioned to benefit from evolving financial markets. Financial services is the largest industry in London and one of the fastest growing in the UK. For TP ICAP, the results are already evident, with the share price up solidly44% in the past year. It also pays a handsome dividend with a yield of 5.7%.
Mark David Hartley owns shares in TP ICAP.
This story originally appeared on Motley Fool
