The Motley Fool

Stock market rally: 3 dividend-paying UK shares I’d buy in an ISA for a no-deal Brexit

Image source: Getty Images.

Just over a month remains from Britain exiting the Brexit transition period. A frictionless (or as smooth as practically possible) separation from the EU had been hoped for. But instead, the possibility of an economically-painful no-deal Brexit looms large on the horizon. It’s a scenario that threatens the long-term profits outlooks of a large number of UK shares. And it could put paid to the healthy stock market rally that promising Covid-19 vaccine news recently prompted.

It’s clear than stock pickers need to be extremely careful before investing their hard-earned cash. Brexit has been a key consideration for me as I’ve built my Stocks and Shares ISA in recent years. But it hasn’t caused me to lose any sleep. There are still plenty of UK shares that should deliver enormous shareholder riches, whatever happens in the coming weeks.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

3 top UK shares on my ISA radar

Here are three dividend-paying UK shares I’d buy to protect myself from a no-deal Brexit:

1) Severn Trent

Water supplier Severn Trent is one of the safest picks out there as Brexit clouds the economic outlook. Demand for its water isn’t going to drop in 2021 or beyond, even if UK and EU negotiators fail to seal a deal. It also doesn’t face the threat of potentially-cash-strapped customers switching supplier to find a better deal. The same can’t be said for other utilities providers such as power suppliers Centrica and Telecom Plus. Today, Severn Trent carries a mighty 4% forward dividend yield, making it a great buy for income investors.

Hand holding pound notes

2)  4Imprint Group

A no-deal Brexit would cause significant economic harm to the UK economy. And the damage would, in all likelihood, persist for years too. However, countries on the English Channel wouldn’t be immune to any harm either. So why not buy UK shares that have little or no exposure to Europe? One top share that fits in this category is 4Imprint Group. The promotional products supplier generates a whopping 97% of revenues from North America versus just 3% from Britain. Okay, its 0.5% dividend yield for 2020 isn’t the biggest. But I believe 4Imprint’s a great buy anyway as it grows its customer base at an astonishing pace.

3) Stock Spirits Group

Buying UK shares that don’t report in sterling is a great way to Brexit-proof a stocks portfolio too. This strategy doesn’t just allow investors to protect themselves from a falling pound. It allows them to capitalise on it as companies that report in foreign currencies receive a profits boost when sterling drops. I’d buy Stock Spirits Group to play this theme as it reports in euros. What’s more, it has terrific defensive qualities as alcoholic drinks demand remains strong, even when economic conditions worsen. And it generates just a fraction of revenues from these shores. Today, Stock Spirits sports a bulky 3.5% forward dividend yield.

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.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended 4imprint 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.