2020 has proved a disaster for many income investors. Dividends from UK shares have fallen at their sharpest rate since at least the 2008/09 financial crisis in recent months. Meanwhile the ongoing Covid-19 crisis means that share investors should prepare for more dividend cuts, postponements or cancellations to come.
It’s clear that you and I need to be extremely careful in the current climate. It doesn’t mean, however, that we should stop buying UK shares entirely. Remember that plenty of stocks have continued to pay meaty dividends to their investors. Experts like The Motley Fool can help you discover UK shares that should remain big income providers, regardless of the outlook for the global economy.
3 top dividend stocks for ISA investors
There’s a number of tricks that savvy investors use to protect their stocks portfolios and continue generating handsome dividend income. Buying shares with defensive or even counter-cyclical operations is one. Investing in UK shares that have competitive advantages (or economic moats, as Warren Buffett calls them) is another. Ensuring that your investments have a robust-enough balance sheet to absorb a prolonged economic downturn is one more.
I’ve continued to buy UK shares in my own Stocks and Shares ISA. I bought Clipper Logistics and Tritax Big Box REIT because of their bright dividend outlooks. And I’m considering buying the following income heroes for my ISA too.
- The 5.1% forward yield at Urban Logistics REIT makes it hard to beat in dividend terms. It’s not just the company’s robust balance sheet that makes it such a top income stock today. It’s that, like Clipper Logistics and Tritax Big Box, it’s a great play on the soaring e-commerce segment. Its distribution and warehousing estate is growing and should deliver terrific profit rises over the next decade.
- Ramsdens Holdings is a terrific counter-cyclical share to buy right now. For one, demand for its pawnbroking services is likely to surge as the British economy sinks. With gold prices soaring it also stands to gain from people selling their jewellery and other trinkets through its precious metals-dealing service. What makes it a great pick for dividend investors is its 4.7% prospective dividend yield.
- National Grid is a terrific pick for even the most nervous investors. Firstly, it has some of the strongest defensive operations of all UK shares: electricity provision. Secondly, it has a significant advantage in that it actually has no competition. And it’s unlikely to have its monopoly on the market shaken up any time soon. This FTSE 100 company’s 5.8% forward dividend yield is the biggest of all Britain’s utilities giants too.
More top UK shares to get rich with
There’s still plenty of opportunity for UK share investors to get hold of big dividends today. And National Grid et al are just a handful of income heroes that could help you get rich. The Motley Fool’s treasure trove of special reports and timely articles can help you find even more. So do some research and get investing today. You might even become an ISA millionaire.
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Royston Wild owns shares of Clipper Logistics and Tritax Big Box REIT. The Motley Fool UK has recommended Clipper Logistics and Tritax Big Box REIT. 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.