Despite being in the news recently for closing nine of its ‘wrongly located’ shops, Marks and Spencer is our top choice for investors this week. The chain, with around 800 high street stores in the UK selling food, clothes and home products, is one for investors seeking to add to a balanced portfolio.

After beating market expectations with its full year results in May, the group reported a 6.1% rise in underlying pre-tax profits to £661.2m, compared to forecasts of around £648m. Investors should note that the profitability of the general merchandise division has risen, whilst the food business remains strong. Current investors will also be pleased to see the final dividend was lifted 7%, making a total pay-out of 18p for shareholders.

With more money in our pockets, UK consumers are expected to continue spending on the high street and in effect supporting our economy. Those interested in the chain should also keep an eye on its plans to transform itself into an international, multi-channel retailer. With plans such as these and strong, bullish results on record, we currently recommend Marks and Spencer as a ‘buy’ for medium risk investors.

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