A slew of positive vaccine news has bolstered investor appetite for UK shares in recent sessions. AstraZeneca joined the gang and published a promising update of its own on Monday. The FTSE 100 pharma powerhouse says testing of its own concoction formulated with Oxford University reveals an average protection rate of 70.4%.
Rival vaccines from Pfizer and BioNTech and Moderna have show greater effectiveness. But news that AstraZeneca’s formula can be more easily stored and transported, and is much, much cheaper than those of them other treatments, have boosted confidence that a global vaccination programme could be just around the corner.
The outlook for the global economy is a shade better than it was just a month ago. But it’s still too early to claim a UK share price rebound is around the corner. It’s also clear that profits and balance sheets may remain under pressure well into 2021. And, as a consequence, dividends could fail to significantly recover from this year’s multi-year lows too.
Buying on the dip for my ISA
All of this is no reason to stop investing in UK shares though. At least in my opinion. I’ve put my money where my mouth is too. I’ve continued to buy British stocks for my Stocks and Shares ISA despite the uncertain economic landscape. This is because I buy UK shares with a view to making big returns over the long term, say a decade or more.
But there’s no reason why my investing strategy can’t also make me big returns in the more immediate future. Even if Covid-19 continues hampers the global economy in 2021 there are still plenty of UK shares that should deliver big dividends. And a report from Janus Henderson shows exactly why.
Total dividends from global stock markets fell around 11% in the third quarter, the asset manager said. However, some sectors still managed to hike dividends year-on-year despite the economic crash. Total dividends from tobacco stocks kept rising, for example, as did manufacturers of household and personal products, drugmakers, utilities providers and non-oil energy suppliers.
Making money with UK shares
These sorts of shares provide products and services that remain in high demand at all points of the economic cycle. As a result, they enjoy exceptional earnings stability from year to year. And, largely speaking, it gives them the means and the confidence to keep raising dividends.
There’s plenty of top stocks like these for UK share investors to choose from today. I’d happily invest in FTSE 100 power generator SSE, for example, or blue-chip medicines maker GlaxoSmithKline. I already own household goods manufacturer Unilever in my ISA because of its exceptionally defensive qualities. There are dozens more top UK shares like this for me to choose from on the London Stock Exchange. And a great many of these can be bought at little cost following the recent stock market crash too!
Royston Wild owns shares of Unilever. The Motley Fool UK has recommended GlaxoSmithKline and Unilever. 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.