3 top UK shares I’d buy before the ISA deadline

The ISA deadline is on 5 April. Roland Head reveals three UK dividend shares he’s been buying for his Stocks and Shares ISA portfolio.

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The ISA deadline on 5 April is approaching fast. Today I want to look at three UK shares I’ve recently added to my top-rated Stocks and Shares ISA.

A top luxury brand

Businesses with luxury brands can be good long-term investments. They often have high profit margins and loyal customers.

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There aren’t many UK shares that offer luxury brand exposure, but one that does is Burberry (LSE: BRBY). This business was founded in 1856 and is now a global business with sales of nearly £3bn per year.

Burberry’s share price has fallen recently, probably because markets fear further disruption to overseas sales. China is a key market, but renewed Covid lockdowns could hit local sales and limit overseas tourism — a key source of sales. The Russia-Ukraine war is also a concern.

However, Burberry has survived many major global crises in its 166-year history. My feeling is that the current weakness could be a buying opportunity. Burberry shares currently trade on just 17 times forecast earnings, with a 3% dividend yield. I’ve recently topped up my holding.

UK shares: my top retailer

My second choice also runs shops, but it’s a very different business. Homeware retailer Dunelm Group (LSE: DNLM) is a mass-market business where around 20% of the UK population shop, according to recent figures from the firm.

The founding Adderley family still have a controlling shareholding in Dunelm. While they’re not actively involved in management, I think the business still has many of the attractions of a family-owned firm.

Dunelm has performed well through the pandemic, thanks to strong spending on home improvements. Sales rose by 11% to £796m last year, while pre-tax profit climbed 25% to £141m.

Broker forecasts suggest a similar rate of growth during the current financial year, which ends in June. I suspect we could see a slightly slower performance after that, which could leave the shares looking fully priced on 14 times forecast earnings.

I see this as a short-term headwind, but not a long-term concern. In my view, Dunelm is one of the best UK retail shares. I’m happy to own the stock and recently added more to my ISA portfolio.

I’ve bought this instead of oil

I’m not too sure about the outlook for big oil stocks at the moment. What I’ve been buying instead is FTSE 100 stock DCC (LSE: DCC). This Irish firm is one of the less well-known members of the FTSE 100, but I think it’s an excellent business.

DCC is a distribution specialist that operates in the energy, healthcare, and technology sectors. The majority of profits come from the group’s two energy divisions. These supply LPG, road fuels, and products such as heating oil under brands including Certas Energy and Flogas.

DCC shares have fallen recently, perhaps because the disruption in the energy market could cause problems for firms such as DCC.

Fortunately, DCC management are taking steps to diversify and expand away from oil and gas. In its energy business, DCC is starting to supply lower carbon fuels. Alongside this, the healthcare and technology divisions are growing fast. I see these as long-term opportunities for shareholders.

DCC shares trade on just 12 times 2022-23 forecast earnings, with a 3.2% dividend yield. That’s unusually cheap for this stock, but I think it’s likely to be an opportunity. I’ve been buying DCC shares for my portfolio.

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Roland Head owns Burberry, DCC, and Dunelm Group. The Motley Fool UK has recommended Burberry. 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.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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