That doesn’t mean you and I should stop buying UK stocks. Indeed, there are still plenty of brilliant dividend stocks to choose from today despite the Covid-19 outbreak. And after the stock market crash of 2020, many of these income heroes are too cheap to miss.
8% dividend yields!
Direct line insurance group is a great choice for even the most nervous investors. Things like home, pet and especially auto insurance are some of the last things we stop buying during economic downturns. This is one of the reasons why this FTSE 250 the insurer felt confident enough to reinstate dividends last week. Direct Line has a dividend yield of 8.5% and trades at an undemanding forward price / earnings (P / E) ratio of 14 times.
UK shares as GlaxoSmithKline are also heroes for nervous investors in difficult times like these. We need medicine and medical services no matter what economic storms rage beneath our windows. But that’s not the only reason I would buy this FTSE 100 giant. I am also encouraged by the pace at which sales of its new drugs are increasing and the strength of its pipeline. Second quarter financial results revealed that 35 drugs and 15 vaccines were in development. Today Glaxo is trading at a 13x P / E ratio for 2020 and carries a hefty 5% dividend yield.
Want to get rich with UK stocks?
Value investors should also consider buying PayPoint today. This UK stock is trading at an even cheaper futures P / E ratio of 12 times. Meanwhile, its dividend yield for this fiscal year stands at 7.5%. The business in the company (which provides retail terminals to convenience stores) was recently abandoned. But this was due to the fact that the number of customers going to stores to pay their bills suffered with the entry into force of the lockdowns. In truth, the future remains extremely bright for this FTSE 250 share as an adoption of its PayPoint One terminals tear higher. And it creates tons of cash with which to maintain its generous dividend policy.
So don’t stop buying UK stocks today. As these dividend-paying stocks show, there are many great stocks that are just good to miss after the stock market crash. In addition, experts like those of The motley madman can help you identify these market stars with their extensive library of special reports.
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Royston Wild has no position in any of the stocks mentioned. The Motley Fool UK recommended GlaxoSmithKline and PayPoint. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations that we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering a diverse range of information makes us better investors.