2020 has turned out to be a disaster for many dividend investors. More than half of FTSE 100 companies alone have cut, suspended or axed shareholder payouts in response to the Covid-19 crisis. The threat of a painful and prolonged global economic downturn means that more UK shares could upend their dividend policies in the weeks and months (perhaps even years) ahead, too.
That’s not to say that there are no longer top dividend stocks for you and I to buy, however. There remain plenty of top UK shares with great earnings visibility and strong balance sheets to choose from today. And the recent stock market crash means that many dividend yields have shot through the roof.
2 great dividend buys after the crash
We at The Motley Fool believe that the 2020 stock market crash presents a brilliant investment opportunity. You and I can load up on high-quality UK shares at a lower price than they were trading at earlier in the year. I myself have taken the opportunity to go dip-buying and one of my recent ISA purchases is big-yielding Tritax Big Box.
And there are several other great dividend-paying UK shares I’m thinking of buying today. Let me talk you through a couple of the income heroes on my watchlist:
- National Grid is a great pick given the storm (from Covid-19 and Brexit) approaching the UK economy. It has total control over the domestic power grid as well as in parts of the Eastern seaboard of the US. This provides it with supreme earnings visibility whatever the broader economic backdrop. Regulatory issues are always a worry for utilities plays. But this shouldn’t be a serious worry for the FTSE 100 firm until around 2025 when talk of possible renationalisation under Labour might resurface as the next general election comes around. This UK share carries a mighty 5.5% forward dividend yield at current prices.
- I’m sorely tempted to buy Chesnara in the wake of the stock market crash, too. At current prices the financial services giant sports a mighty 8% prospective dividend yield, but that is not all. Recent weakness means this UK share trades on an attractive price-to-earnings (P/E) ratio of 13 times. Chesnara buys life insurance funds closed to new customers from companies and manages them through to maturity. It’s not sexy but its business is stable, and this has underpinned more than a decade-and-a-half of annual dividend increases. It’s a perfect buy for these uncertain economic times, I feel.
Getting rich with more top UK shares
Chesnara and National Grid are just a couple of the big-dividend-paying UK shares I’m thinking of buying for my ISA. The list of top-quality stocks that are too good to miss after the stock market crash is vast. And The Motley Fool’s huge library of exclusive reports can help you find many more. So do some research and get investing today.
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Royston Wild owns shares of Tritax Big Box REIT. The Motley Fool UK has recommended Tritax Big Box REIT. 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.