I’m hunting for the best cheap UK and US shares to buy today. Here are a couple of big-dividend-paying bargains I’m considering snapping up.
A top UK banking share
British bank shares like FTSE 100 giants Lloyds or Barclays are popular among many investors because of their big dividend yields. The figures for these particular two sit at a handsome 5% and 4%, respectively. But I’d much rather spend my hard-earned cash on Bank of Georgia Group (LSE: BGEO) shares instead.
This isn’t just because this cheap UK share’s dividend yields sit at a superior 5.3% for 2021. It’s due to the bright outlook for the Georgian economy which (beyond this year at least) looks far better than that of the British one. In this environment, Bank of Georgia’s much more likely to generate better profits growth than the FTSE 100 firms.
What’s more, banking industry penetration in the eurasian country is extremely low versus here in the UK. And Bank of Georgia is the nation’s second-biggest bank, giving it the clout to exploit this opportunity. The FTSE 250 firm’s market share sits at a huge 40% and 37% in the retail banking and corporate and investment banking fields, respectively. Furthermore, the company has invested huge amounts in the fast-growing fields of digital banking and mobile money to keep growing its customer base too.
These qualities all give Bank of Georgia excellent growth possibilities over the long term. However, I will keep in mind that low interest rates pose a risk to its profit margins. Rock-bottom central bank rates reduce the difference between what banks can charge borrowers and give to savers.
A US share on my radar
I’m also casting my net outside of the London Stock Exchange in an effort to make great returns from my investment portfolio. And one cheap US share that’s on my radar today is Alcoa Corporation (NYSE: AA). This particular stock trades on an ultra-low forward P/E ratio of 9 times. Moreover, its 4.2% dividend yield for 2020 beats the forward average of many other US and British stocks.
This US stock makes bauxite, alumina, and aluminium. Indeed, in 2020 it was the sixth-largest aluminium producer on the globe. Prices of the lightweight metal just hit their most expensive for 10 years above $2,700 per tonne at the London Metal Exchange. I think they could continue rising as the economic recovery plays out. Further, aluminium plants in China are shuttered as the country struggles to meet its climate targets. The aluminium-smelting process requires vast amounts of electricity.
Alcoa’s fortunes are tied closely to the condition of the broader global economy. And so its outlook for the short-to-medium term remains pretty uncertain as the number of Covid-19 cases spike across many parts of the planet. Still, I think this threat is reflected in Alcoa’s low earnings multiple.
