2020 has proved to be a disaster for many dividend investors. On the FTSE 100 index alone, more than half the companies have either reduced, postponed, or axed shareholder payouts entirely. There could be more blood on the carpet too as the Covid-19 crisis rolls on and the global economy struggles.
That doesn’t mean that dividend chasers should throw in the towel and stop investing. There remain plenty of top-quality FTSE 100 shares that should keep paying chunky dividends to their investors despite difficult economic conditions. Hundreds of UK share investors made millions following the 2008 financial crisis. And I expect the number to keep growing despite the coronavirus crisis.
3 FTSE 100 stocks I’d buy today
Let me talk you through three big-yielding UK shares from the FTSE 100 that are on my radar:
- Natural resources giant Polymetal International may be predominantly known as a gold producer. But it is also one of the largest silver producers on the planet. And this makes it a terrific share to hold for the next few years at least. Safe-haven demand for precious metals will remain strong during this period of extreme macroeconomic uncertainty. But Polymetal’s a great way to play the inevitable economic recovery as well, as industrial demand for silver will be on course to pick up too. This is why the boffins at Jefferies expect that silver – which recently traded at $24.30 per ounce – will average 30 bucks in 2021 and remain above today’s price until 2023 at least. Today Polymetal trades on a price-to-earnings (P/E) ratio of 10 times and carries a 6% dividend yield. It’s an absolute steal in my opinion.
- Smurfit Kappa’s another FTSE 100 stock that City analysts expect to keep paying dividends. And as a consequence the Irish packaging giant sports a chubby 3.5% yield for 2020. This UK share can rely on defensive sectors like food retail, pharmaceuticals, household products, and tobacco to keep driving profits during the economic downturn. And it can expect the fast-growing e-commerce marketplace to give earnings a short in the arm too.
- Those shaken by the raft of FTSE 100 dividend cuts this year should pay close attention to 5.5%-yielding Admiral Group as well. Having car insurance is a legal requirement, of course, which gives this particular UK share terrific earnings visibility. This, however, is not the only reason why Admiral’s a great buy during the rolling Covid-19 crisis. Car sales in the UK have exploded recently as Britons seek to avoid public transport. And they need the likes of Admiral to let them hit the road.
Want to make serious money with UK shares?
These are just a handful of the exceptional FTSE 100 shares that should continue to deliver delicious dividends to investors. The Motley Fool’s epic catalogue of exclusive reports can help you find even more dividend-paying UK shares to buy for your ISA. So do some research and get investing today, I say. You could get seriously rich and possibly even make a million.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Admiral Group. 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.