Investors tend to use gold to their advantage during times of uncertainty, such as these, to store their wealth. The problem is that this causes a surge in demand and drives gold prices up. But when market conditions become stable, the price of gold drops.

Investors that switch from stocks to gold during bad times and vice versa during good times might inadvertently adopt a “buy high, sell low” investing strategy. If returns matter to you, and I am guessing they do, then I think UK shares are the way to go.

If you were to invest in a FTSE 100 index instead of gold in 2009, your return would have been 20% higher in 2019. This got me thinking: which assets have the potential to beat gold and are possibly a better store of value?

How to pick our UK share champions

These companies would need to be big, more than £1 billion market cap big, to make sure they can withstand any calamity. They should have solid fundamentals and a modest price-to-earnings ratio. Most importantly, they should pay a high, reliable dividend. These factors do not promise market-beating returns but indicate a company that is resilient to downturns in the economy.

Calling in the big guns

BAE Systems (LSE: BA) trades in the aerospace and defence market, and this UK share has a market cap of just under £16 billion. Historically its annual earnings growth rate has been 10%. The company’s primary customers are governments, which reduces the risk of defaulting clients. There is also a large backlog of orders, which should sustain its revenue going forward.

The combination of these facts tells me its future earnings are well protected. Right now, BA shares can be considered cheap, with a price-to-earnings ratio of 10. What also attracts me is its rock steady dividend yield of 4.7%.

Easy pill to swallow

At the beginning of the Covid-19 pandemic, a lot of eyes concentrated on the pharmaceutical industry for hope. Not only were people looking for hope of a vaccine but also a good investment in a UK share!

GlaxoSmithKline (LSE: GSK) is considered one of the most prominent players in the vaccine market. Its vaccine revenue for the first quarter was £1.9 billion, up 18% from the prior year. The company has a market cap of £82 billion and started operating in 1715. Clearly, it has the resources and experience to develop a world-saving vaccine.

I love GSK for two reasons: it has an excellent dividend yield of 4.8%, and its business is very relevant right now. GSK has a modest price-to-earnings ratio of 15, suggesting that this amazing UK share is reasonably priced. It also has total assets of £84 billion compared to total liabilities of £64 billion. I cannot think of a reason not to buy it.

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Miles Williams has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

These trading conditions are a catalyst for disaster, and the Lloyds share price reflects this. But this can be good news for the savvy investor as it presents a unique investment opportunity, in my opinion. Here’s why.

You CAN teach old dogs new tricks

There is some light at the end of the tunnel. In 2018 Lloyds introduced a new strategy, and I believe this gives us insight into how the company can recoup profits, leading to the Lloyds share price bouncing back. At the core of its plan was to improve customer experience. It is an excellent start since “the customer is always right” and the company planned on doing this in three ways.

Firstly, further digitisation of the group. The more “we” as the customer can do from our couches, the less Lloyds has to spend on branches. Also, to attract younger customers, the company needs to keep up its online presence to stay relevant. Lloyds seems to be on the right track here.

Secondly, the company plans to maximise its current offerings. This includes an additional £6 billion in loans to start-ups and SMEs. There is definitely more risk involved, but with such low-interest rates, Lloyds needs to increase the volume of loans.

Thirdly, transform the way the company’s employees work. The target here is to improve efficiency company-wide by 30%.

The ultimate purpose of the strategy is to make things more efficient, grow revenue streams and reduce costs. All this should contribute towards pushing up the bottom line. And for a while, it seemed to be working: Lloyds’ share price showed signs of strength, until Covid-19 hit.

The bigger picture

At its core, Lloyds is a good company with sound fundamentals. Over the past five years, its historical annual earnings growth is 24%, which is exceptional. The bank’s liabilities consist of low-risk source of funds, which consequently lead to a low level of loans gone bad at only 1.3%. The company has a robust network of customers and a solid product offering. Despite Lloyds’ shares currently being low, I think they still have a lot to offer.

In my opinion – once the dust settles, the masks come off, and life returns to “normal” – interest rates will rise and demand in the housing market will once again reach all-time highs. Lloyds’ strategy should continue to pay off, and its operating costs will likely be considerably lower than before the pandemic. This is a recipe for success, and I think it could lead to the Lloyds share price reaching all-time highs.

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Miles Williams has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

One yummy FTSE 100 stock

We all know what excitement we feel when we hear the doorbell ring, knowing it’s Just Eat Takeaway (LSE: JET) delivering Friday night Chinese! The FTSE 100 company has seen a significant surge in demand for its services during the pandemic. Its popularity has skyrocketed during Covid-19. Instead of going out to eat, households have brought the restaurants home. I believe that this will remain true after the effects of Covid-19.

Throughout history, we see that times of crisis accelerate trends. E-commerce is one industry that was given a shot in the arm and is currently blowing up. According to the Office for National Statistics, online sales compared to total retail sales jumped from 18% in May 2019 to a staggering 33% in May 2020. In my opinion, this is not going to slow down.

Recently Just Eat reported a surge in revenue of 25%, and this is just the start in my opinion. The company’s operating model is almost a self-fulfilling prophecy. The more popular its services get, the more restaurants sign up, the higher number of orders through its platform. That is why it is one of the FTSE 100 companies I think could generate some exceptional growth in 2021.

In the cards

My next stock is Flutter Entertainment (LSE: FLTR), a company that is poised to grow coming out of Covid-19. It operates an online sports betting and gambling platform. I see two killer opportunities that could lead to massive growth for the company.

Firstly, there is a sudden increase in online gambling and betting due to Covid-19. During the lockdown, casinos were closed, and sporting fixtures cancelled. When visiting the local betting shop was no longer an option, scores of people moved to online gambling and betting. Secondly, gambling is now legal in the United States for any state that wishes to legalise sports betting, allowing FTSE 100 constituent Flutter to expand its current market share rapidly.

As stated above, “crisis accelerate trends” and this is no different. If Flutter can capitalise those two opportunities, it will be able to generate superb returns. I would consider this FTSE 100 stock to be cheap right now when looking ahead to its potential market cap.

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Miles Williams does not own any shares in any of the shares mentioned. The Motley Fool UK owns shares of Flutter Entertainment. The Motley Fool UK has recommended Just Eat Takeaway.com N.V. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, not all companies on the London Stock Exchange have boomeranged back. I think I have found three companies with solid fundamentals that are cheap right now and have the potential to reach new highs.

Reach for the sky

All eyes on easyJet (LSE: EZY), the low-cost airliner that operates within Europe. I know what you are thinking, “who in their right mind would buy airline stocks during Covid-19?” and you would be right. At the moment, all non-essential travel is to be circumvented. But EZY’s operational model and its balance sheet is a recipe for success.

The low-cost model adopted by EZY gives the company flexibility compared to the competition. This allows EZY to adapt to a low volume environment a lot faster. Total assets outweigh total liabilities by a factor of 1.3, and operating income easily covers the debt repayments. Currently on the London Stock Exchange, easyJet is trading just above the March lows. But I think the company could see some remarkable growth when flying becomes the norm again.

Get grounded

Right now there is a boom in the iron ore price. For Anglo American  (LSE: AAL) that means money, money, money!

AAL is one of my favourite companies on the London Stock Exchange. With a high, predictable dividend yield of 4.6%, a balance sheet made of steel (see what I did there?) and is currently fairly priced, what’s not to love? Over the past three years, AAL has consistently reduced its debt to equity ratio to just above 30%. Having as little debt as possible during the Covid-19 pandemic will help the company ride out this wave of uncertainty. I think AAL would make a great addition to any portfolio.

The black sheep

I enjoy scanning through the London Stock Exchange looking for a company that is not receiving the love it may deserve, and I found one! Arrow Global Group (LSE: ARW).

ARW is a diversified financial sector firm that specialises in the debt acquisition space. It will identify, acquire and manage the debt on behalf of financial institutions like banks. At first, this may not sound like a good thing, being that a lot of debts are going to “go bad” in the coming months. But I think the pandemic will open up a whole range of high yield debt for ARW to source profits.

ARW’s share price is 72% down from its March value and for a good reason. But it has a few hidden tricks. ARW has high Return On Equity (ROE) of 28%, a resilient balance sheet with long-term debt (which is only repayable in 2024), and a sustainable dividend yield of 11%. I believe ARW could rebound in a big way once it starts to exceed the market’s expectations and get some much-needed love.

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Miles Williams owns shares in Anglo American. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The stigma, the cure

The stigma around cannabis has started to change from a dirty drug and has almost become a miracle cure. Possibly the miracle cure the UK could use to help fit the Covid-19 bill. A bill that is estimated to be a whopping £300 billion. The government has a few options to breach this funding gap. Inevitably taxes will be raised. Sadly this includes sin taxes, which we will happily pay to get back to the pub. Or they could create a new tax stream through the mass legalisation and licencing of cannabis. I think Associated British Foods (LSE: ABF) is one of the few companies on the FTSE 100 that can take advantage of the possible legalisation of cannabis.

My gameplan

Compared to the US, the UK has minimal investment opportunities in the cannabis industry. One of the hidden players in the cannabis game is ABF. British Sugar, a wholly owned subsidiary of ABF, is a major cultivator of cannabis for GW Pharmaceuticals. GWP produces Epidiolex, a cannabis-based treatment for seizures associated with Lennox-Gastaut syndrome. For the financial year, 2020, GWP’s revenue tripled all due to the sale of Epidiolx. My ultimate game plan for investing in the possible “cannabis rush” is to sell pickaxes during a gold rush.

Now that we have established why ABF is a hidden cannabis stock, let’s look at why ABF is a good investment.

The company

ABF is a well-diversified food retailer across the globe. With food being a basic need, its core product will always be in demand. Having a £17 billion market cap on the FSTE 100, ABF has a lot of resources and experience in the cultivation business. The company is exceptionally solvent and has a stellar balance sheet. Total assets exceed total liabilities by £9 billion and low levels of debt. I think this robust business will survive if there were to be a second market crash. Currently, it has a Price to Earnings Growth (PEG) ratio of 0.8, which is excellent, and the share price is hovering around the March lows. ABF is a steal at its current share price for the potential value this stock could create.

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Miles Williams has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

It seems like only yesterday it was the end of March and it was action time. Stocks were cheap and economic growth was nowhere to be seen! UK economic activity is expected to shrink by 14% and interest rates are at a record low of 0.1%. I have to ask myself, where is the best place to put my money?

In line with fundamental investing principles, the “Plan F Portfolio” has to be diverse – eggs in one basket and all – and should consist of major players in their respective industries with strong balance sheets, secured earnings and a market-beating dividend. These are my three champions.

Dividend stock #1

The first dividend stock I am buying is GlaxoSmithKline (LSE: GSK), one of the most diversified pharma companies. It has strong revenue avenues and is expected to have modest growth in the future. GSK has two things I love in a company: a high dividend yield of 4.8% and a business that is more relevant now than ever. GSK’s vaccine business increased 18% year-on-year, which should ensure GSK keeps its strong balance sheet.

Value play

Next on my power play list is BAE Systems (LSE: BA), which trades in the aerospace and defence market. BA has high-quality revenue streams, and although some governments might look to cut down on military spending in the short term, in a recent market update BA announced it has a large backlog of orders. The backlog can sustain its operations in the long term, which is a great indication that future earnings are well protected. Coupled with its yield of 4.7%, I believe this makes for a great dividend stock to put your money in and ride the wave of uncertainty. BA is a great value play at its current price level.

Portfolio ‘lead man’

My superstar dividend stock of the “Plan F Portfolio” – and arguably one that should be part of any “A team portfolio” – is Anglo American (LSE: AAL). With a price-to-earnings ratio of 7.5% at the moment compared to the mining industry’s 7.8%, low debt to equity ratio of 32% and stellar balance sheet, AAL has the brawn but not the debt to wait out this storm.

Governments will be looking to support and boost their economies by investing in infrastructure projects. A crucial part of that is steel, giving AAL a nice post Covid jump-start. Once the storm passes, investors that jump in now should enjoy great capital appreciation but also a yield of 5.2%.

With those three dividend stocks, I think you should be able to come out on the other side smiling.

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Miles Williams owns shares of Anglo American. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.