A cloud of fear continues to drain investor appetite for UK shares. Since springing from the depths of the stock market crash in March, buyers have been thin on the ground. The FTSE 100 finished last week trading at its cheapest for a fortnight.
It seems that market confidence will remain in the doldrums until a breakthrough on a Covid-19 vaccine is announced. Until then, investor sentiment will remain dominated by fears over Brexit, deteriorating relations between the US and China, and the possibility of a prolonged economic downturn.
As an investor interested in UK shares, I think this is a shame. Stock market crashes are nothing new. And studies show that investors with a balanced portfolio of quality shares can still enjoy terrific returns despite these hiccups. Data shows that these tend to range between 8% and 10% a year.
So why scupper your dreams of getting rich and retiring early by deciding to stop buying UK shares? If anything, I reckon the stock market crash provides a brilliant buying opportunity. Some of the best shares to buy today are trading at prices that are too cheap to miss.
Get rich with this cheap dividend stock
Bakkavor Group (LSE: BAKK) is one top UK share that I think is too good to miss at current prices. Why? Well on top of a super-low forward price-to-earnings (P/E) ratio of 8 times it sports a dividend yield of 4.9%.
Forget about City expectations that the food producer will see annual earnings fall by a third in 2020. This reflects the impact that Covid-19 lockdowns have had on the food-to-go market. In truth, this market is tipped to explode in the years ahead and Bakkavor, as a major player in the UK and with growing operations in the US and China, is well placed to ride this trend.
This is why the number crunchers expect Bakkavor to bounce back with a 37% profits rise in 2021. If you’re looking for great growth and big dividends from UK shares, I think you need to give this small cap close attention.
More tasty UK shares
Carr’s Group is another great way to play the defensive food sector today. Its P/E ratio for 2020 sits bang on top of the widely-accepted benchmark of 10 times (or below). And its dividend yield for this year clocks in at a meaty 4%.
This small-cap is a great buy for even the most nervous of investors. It is a master in the agricultural engineering and animal feed segments. People need to eat, whatever social, economic or geopolitical upheavals rage outside our windows. And this provides Carr’s Group with terrific earnings visibility. The business declared just this month that its Agriculture division was trading above expectations even in light of the Covid-19 outbreak.
Both of these small-caps show that you don’t need to stop buying UK shares despite the global economic downturn. In fact, the stock market crash means that many top stocks (like those above) are too good to miss today.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.