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

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.

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.