UK share markets have enjoyed a terrific recovery over the past month. There’s a long way to go, but hopefully these recent price gains herald the beginning of the new bull market.
Irrespective of whether or not the world economy’s about to turn the corner, though, now’s a great time to buy UK shares. Plenty of quality stocks continue to trade at dirt-cheap prices today. Here are some dividend heroes I’d happily buy for my own Stocks and Shares ISA.
The gold standard
Gold prices fell at their worst pace for four years in November. They slumped 6% in value as news of a Covid-19 vaccine boosted appetites for riskier assets like stocks and Bitcoin and damaged demand for safe-havens like gold.
You’d be mistaken for thinking that gold — which hit record peaks above $2,000 per ounce in August before slumping more recently — has shot its bolt. I personally believe there’s plenty of reasons why bullion prices could rocket again, from a prolonged recovery from Covid-19, a lumpy economic rebound, and a severe Brexit-related hangover, to further rounds of money printing from the Federal Reserve and other major central banks.
For this reason I reckon Centamin could be a great UK share to buy for 2021. I think this FTSE 250 stock’s a particularly great buy at current prices too. Today it trades on a price-to-earnings (P/E) ratio of 13 times for 2021 and carries a meaty 6% dividend yield.
Centamin isn’t just a great bet for the near term though. Yesterday the gold digger announced ambitious plans to produce 450,000-500,000 ounces of gold per year at all-in costs below $900 an ounce by 2024. It plans to slash annual costs by $100m at its Egyptian operations by then too. This is a share I’d happily buy for my ISA today and hold for years.
Another top UK share for BIG dividends
The prospect of a bumpy time for the UK economy in 2021 casts a pall over the domestic retail sector. It’s not something that many with sophisticated internet operations or online-only models need to worry too much about though. The boost that Covid-19 has given to e-commerce means that plenty of retail-focused UK shares like ASOS and Boohoo should still enjoy decent profit growth next year.
I consider both these companies to be hot buys today. But their low dividend yields don’t necessarily make them attractive stocks for dividend investors. Personally speaking I’d rather purchase shares in Urban Logistics REIT. Its yields for the financials years ending March 2021 and 2022 clock in at a terrific 4.6% and 6.2% respectively.
Urban Logistics owns and operates distribution hubs all over the country, putting it in the box seat to enjoy terrific profits growth as e-commerce clicks through the gears. And the AIM share remains active on the acquisition front to drive earnings expansion as well (it acquired a total of 20 properties in the six months to September alone). This is a top UK share for both growth and income investors, in my opinion.