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£10,000 to invest? I’d buy these 2 UK shares in an ISA today

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Investing money in UK shares may not feel like the right move for ISA investors at the present time. After all, the economic outlook is weak and possible lockdown measures continue to be mooted.

However, now could be the right time to buy cheap stocks for the long term. In many cases their low valuations and growth prospects indicate they can deliver impressive capital returns.

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With that in mind, here are two FTSE 100 shares that appear to be attractive investments. They could be worth buying with £10,000, or any other amount, today.

Superior growth potential relative to other UK shares

Diageo’s (LSE: DGE) challenging near-term outlook may lead some investors to buy other UK shares at the present time. After all, a slowdown in global travel and pressure on the hospitality industry have negatively impacted on its financial outlook.

However, the company has excellent positions in several beverage categories in markets that are likely to return to high levels of growth in the long run. It has also strengthened its position in premium brands by reorganising its brand portfolio, as well as through recent acquisitions.

Diageo’s shares continue to trade on a relatively high price-to-earnings (P/E) ratio of 24. However, the company’s long-term growth outlook may drive its share price higher as the world economy recovers in the coming years. As such, now could be the right time to buy a slice of it after its 18% fall since the start of the year.

A changing business with a high yield

British American Tobacco’s (LSE: BATS) share price has also underperformed other UK shares this year. It’s down 19% in 2020, as investors have remained downbeat about the company’s prospects in a period of falling volumes within the tobacco market.

However, the company now generates 10% of its sales from non-combustible products, such as e-cigarettes. It expects this percentage to grow as the company expands its product range and invests in marketing new products.

Unlike many other FTSE 100 stocks, British American Tobacco has remained on track to meet guidance for the current year. Its stable outlook may convince some income investors to buy it. Especially while it has a dividend yield of 8% that’s covered 1.5 times by net profit. Therefore, its total return could prove to be relatively high in the long run.

ISA investing

Of course, buying UK shares for your ISA may not produce positive returns in the short run. The economic picture remains tough for many businesses across the stock market, which could send share prices lower in the coming months.

However, buying high-quality shares today while investor sentiment is weak may lead to impressive returns in the coming years. Over time, they could boost your ISA’s value and improve your financial prospects.

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

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Peter Stephens owns shares of British American Tobacco and Diageo. The Motley Fool UK has recommended Diageo. 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.