£3k to invest? I think these are the best UK stocks to buy right now

Thanks to the 2022 stock market correction, there are plenty of high-quality UK stocks to buy today at great prices. It’s excellent news for long-term investors since buying undervalued shares in top-ranking companies, even if it’s only £3k, is a proven recipe for success.

After searching for profitable opportunities, I have identified two businesses in particular that I believe have an attractive investment case. So, I recently added both to my income portfolio.

Powering critical electronics

As technology advances, the demand for increasingly complex electronic systems increases. And this trend is something that XP Power (LSE:XPP) is experiencing a bit of difficulty capitalizing on it. The company is a designer and manufacturer of electronic components, primarily for the healthcare, industrial, and semiconductor manufacturing industries.

However, it recently found itself in some legal hot water, resulting in a $40m penalty. And this punishment, not surprisingly, caused the share price to fall by 70% between January and October 2022. Obviously, this does not look good. But it seems that investors may have overreacted, potentially being the best stock to buy right now.

While frustrating, legitimate fines don’t compromise the XP Power balance. And while there is a risk of reputational damage, it seems that most customers remain loyal to the business as a supplier. The latest trading update revealed record profits of £290.6m, up 21% compared to a year ago. Meanwhile, supply chain disruptions are finally being resolved, speeding up order fulfillment.

With an order book of £362.7m, the company looks to be in a prime position to grow in 2023. Needless to say, the financials are excellent. And when paired with a significant drop in share price due to unpleasant but short-term issues, I can’t help but feel that there is a buying opportunity. And with the share price up 56% in the past four months, others agree.

Best UK stocks to buy now?

Other companies whose financials don’t seem to match the direction of their stock prices Londonmetric property (LSE: LMP). The business is a real estate investment trust specializing in commercial properties such as warehouses and retail stores.

As interest rates rise, the value of these property portfolios continues to decline. And as a result, the price has been dragged down to reflect this. But as an income investor, my main concern is the cash flow situation. After all, Londonmetric’s core business model is to generate revenue through rentals, not asset flipping.

Apparently, although online shopping has decreased due to the cost of living crisis, the demand for well-positioned warehouses remains high. So it’s no surprise that net rental income rose by 14%, reaching £72.1m.

With cash flow strengthened, management then increased its shareholder dividend from 4.4p to 4.6 per share, yielding about 5% today. Obviously, rising borrowing costs are a threat. And it will undoubtedly affect the company’s ability to develop as quickly as it did decades ago.

However, due to the continued rise in e-commerce and the proven track record of management that delivers reliable income, it’s a risk I feel is worth taking. That’s why I believe it could be one of the best UK stocks to buy right now and why I recently became a shareholder.