The economic outlook remains fraught with danger as Covid-19 cases tick up across the world. But I plan to continue buying UK shares for my own Stocks and Shares ISA in the days, weeks and months ahead. Here are a couple I already own and that I’m thinking of buying more of before the April 5 deadline.
A FTSE 100 star
I already have Taylor Wimpey (LSE: TW) shares sitting in my Stocks and Shares ISA. And at current prices I think the housebuilder is one of the best value stocks to buy on the FTSE 100 today. City analysts think annual earnings here will rocket 142% year on year in 2021. This results in a forward price-to-earnings growth (PEG) multiple of just 0.1. This UK share boasts a mighty 5% dividend yield too.
It’s possible that the British economy could be in for a tough time over the next couple of years. The dual problems of Covid-19 and Brexit could well dent demand for Taylor Wimpey’s new-builds. But there are several reasons why I think the homes market can remain robust for years to come.
I expect low interest rates to remain in place as they did throughout the 2010s. This, combined with the increasingly bloody competition between Britain’s lenders, should mean that mortgage products remain ultra-affordable for homebuyers. Massive government support like Help to Buy, and now the 95% mortgage guarantee scheme, should boost interest from first-time buyers too.
Another cheap UK share for ISA owners
Taylor Wimpey’s incredible value is making me consider buying more for my Stocks and Shares ISA. But buying the builders themselves isn’t the only way that UK share investors can get rich from the favourable outlook for the housing market. Buying companies that provide construction materials is a similarly-great idea in my opinion.
This is where brickmaker Ibstock (LSE: IBST) comes in. I also own this British stock in my ISA today. Today’s low share price is making me think of increasing my holdings here too. City brokers think annual earnings will almost double in 2021, also leaving the company trading on a forward PEG of 0.1. Any reading below 1 can indicate that a UK share is being undervalued by the market.
Bear in mind though that Ibstock’s profits could also suffer amid a downturn in broader economic conditions and thus a housing market slump. Rising raw material costs and unforeseen production problems could also cause current earnings estimates to miss their target.
I’m looking on the bright side though. And I reckon Ibstock can expect demand for its bricks to continue as British housebuilding activity will hopefully click through the gears. And I’m expecting the business to resume development of its new Atlas factory in the West Midlands soon (the company put the project on hold last year following the coronavirus outbreak). The new site will churn out a mammoth 80m bricks each year.