News about the Covid-19 crisis has taken a back seat in recent days to developments surrounding the US election. What’s abundantly clear though, is that the pandemic seems to be worsening in large parts of the globe. And this has significant implications for the much-hoped-for economic recovery as countries lock down again. The dangers for UK share investors aren’t over yet.
The number of new daily Covid-19 infections in the US has just topped 100,000 for the first time. Fresh daily records are also being set across much of Europe and infection rates are still surging in other economically-critical parts of the world like India, Brazil and Russia. At the same time, work on a coronavirus vaccine is still to produce a workable treatment.
Getting rich despite the downturn
2020 has been a perilous time for UK share investors. The economic meltdown that’s accompanied the Covid-19 crisis has seen corporate profits battered and dividends heading down the drain. A number of stocks (like Cineworld and Hammerson to name just a couple) are in danger of extinction as their balance sheets buckle.
This is not to say, however, that UK share investors like me should stop buying stocks altogether. There’s an abundance of stocks for us to choose from, whatever stage of the economic cycle we find ourselves at.
2 top UK shares on my radar
Here are a couple of top-quality UK shares I’m thinking of buying for my Stocks and Shares ISA today. I expect them to record strong profits growth, even if the Covid-19 crisis and consequent economic downturn take years to improve:
- I think utilities are perfect picks for uncertain economic times like this. And National Grid is one of the finest defensive picks out there. Electricity demand remains broadly constant, regardless of the health of the UK economy. But this isn’t the only tool in the FTSE 100 firm’s arsenal. It also has a monopoly on keeping the country’s pylons, sub-stations and other network hardware in good nick. This splendid earnings visibility gives it the confidence to keep raising dividends. And in this financial year (to March 2021), another hike is predicted, even though a slight earnings fall is also estimated. As a result, National Grid boasts an enormous 5.5% dividend yield at current prices.
- Spire Healthcare Group’s another great stock to own following the Covid-19 pandemic. For one, the strain placed on the National Health Service means that the hospital group will be needed to chop down waiting lists. Another boost is that sky-high waiting lists are driving people who would ordinarily go via the NHS to select private treatment instead. Price comparison website Compare the Market recently told The Guardian that private health insurance sales have rocketed 40% year-on-year in the past seven months. Demand from self-pay customers is also rocketing right now. These trends should help Spire recover strongly from an expected annual loss in 2020 and deliver meaty shareholder returns, I feel.