Why I’m Optimistic About These 4 UK Shares: Lloyds Banking Group PLC, Barclays PLC, Aviva plc And Prudential plc

I think these 4 UK shares could have relative investment appeal: Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L), Barclays PLC (LON:BARC) (LSE:BARC.L), Aviva plc (LON:AV) (LSE:AV.L) and Prudential plc (LON:PRU) (LSE:PRU.L)

Barclays PLC
Barclays PLC

UK shares have generally experienced a volatile 2017 so far. While this may concern some short term investors, as someone who focuses on the long run I’m still optimistic about the prospects for UK share prices. Here are 4 stocks I think could have relatively bright futures.

Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L) has a P/E ratio which I find difficult to understand. It is hovering around 10 and I think its shares could rise due to improving investor sentiment. I understand the UK economy faces a difficult outlook, with Brexit, higher inflation and some political uncertainty. However, I think Lloyds shares could perform relatively well because the bank has strengthened its balance sheet and become efficient compared to many of its banking peers.

Another banking stock I think has investment potential is Barclays PLC (LON:BARC) (LSE:BARC.L). I feel its strategy could mean it registers improved share price performance in the long run, as I believe a focus on financial strength rather than income growth is a good move given the uncertain macro outlook. As with Lloyds, I’m optimistic about Barclays from a valuation perspective, but also think it has growth potential from a modest reorganisation and a drive for greater efficiency.

Prudential plc’s (LON:PRU) (LSE:PRU.L) shares have gained 25% in the last year. I think more progress for the company’s share price could lie ahead, as I feel it has growth potential. I like its strong position on a relative basis in Asia, where I think rising wealth levels could lead to higher demand for the financial products in which Prudential specialises. I also feel its fund management business could provide some differentiation, which may improve the prospects for its share price.

I was impressed by Aviva plc’s (LON:AV) (LSE:AV.L) results this week. I think the business is making progress and I believe there is growth potential within its main divisions. I like its focus on growing dividends per share via a rising payout ratio. It has not yet reached its stated target, so alongside growing earnings per share I think Aviva’s dividend prospects could improve. At a time when inflation is widely forecast to move higher, I think this could positively catalyse Aviva’s share price in the long run.

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