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4 dividend-paying cheap UK shares (including an 8%-yielder) I’d buy for my ISA to retire rich

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I’ve no plans to stop investing for my Stocks and Shares ISA. I buy UK shares with a view to holding them for a minimum of 10 years. Over this sort of time horizon investors like me can expect to make an return of at least 8% on average a year. Economic downturns are no barrier to making big returns from stock markets. So why should I stop investing?

2 tasty UK shares

Here are a couple of top-quality UK shares I’m thinking about buying for my ISA today:

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  • Gambling colossus Gamesys Group offers plenty for long-term investors to get stuck into. Online gaming is going from strength to strength, and its beloved brands like Virgin Games and Monopoly Casino will allow this UK share to make the most of this opportunity. Today, Gamesys trades on a price-to-earnings (P/E) ratio of 8 times for 2021, making it too cheap by half, in my opinion. It boasts a tasty 3.2% dividend yield too.
  • Discount retailer B&M European Value Retail is a brilliant UK share to own as consumer spending power comes under severe pressure. News that like-for-like sales rocketed 23% in the six months to September is perfect evidence of this. Ongoing store expansion should pave the way for sustained growth well into the 2020s too. Today, B&M trades on a bargain-basement price-to-earnings growth (PEG) ratio of 0.2 for the fiscal year ending March 2021. It carries a handy 2.3% dividend yield as well.

Top stocks from the FTSE 100

The uncertain economic environment means that buying UK shares with defensive operations is also a good idea. Dividends have plummeted to levels not seen since the 2008 banking crisis in the wake of the Covid-19 outbreak. But there are still plenty of stocks out there that have supreme profits visibility which allows them to keep paying bulky dividends, despite the macroeconomic downturn.

  • The BAE Systems share price has just crashed to its cheapest for around five years. It’s a move which I believe represents a brilliant dip-buying opportunity. Make no mistake. The volatile geopolitical landscape means arms spending will continue to rise for the foreseeable future. And BAE Systems’ role as a major supplier to Western militaries puts it in the box seat to exploit this fact. Recent price weakness leaves this UK share trading on a P/E ratio of just 10 times for 2021. It boasts a mighty 5.5% dividend yield for next year too, making it a terrific pick for value chasers.
  • Polymetal International is another FTSE 100 stock which hasn’t much to fear during the economic downturn. Indeed, gold producing shares thrive in tough times like these as investor jitters drive demand for the yellow metal. Gold struck fresh record highs above £2,050 per ounce in 2020, lifting Polymetal’s share price through the roof. Yet this UK share still looks attractively priced at current levels (it carries a P/E ratio of 8 times for 2021 and a gigantic 8.2% dividend yield). I think it’s another top stock that can be considered too cheap to miss.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value. 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.

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