The Motley Fool

14%+ dividend yields! 3 cheap UK shares I’d buy for my ISA for 2021

Image source: Getty Images.

It’s that time of year when UK share investors need to consider what to buy for the new year. Huge uncertainty over the strength and the timing of the economic recovery makes the task more difficult than in many previous years. But this doesn’t mean that stock pickers need to sit on the sidelines. There are still plenty of top-quality shares that should thrive whatever the weather.

Here are three top-quality UK shares I’d buy in my own Stocks and Shares ISA for 2021:

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...

#1: Premier Foods

Mr Kipling and Ambrosia custard manufacturer Premier Foods has proved to be a beacon of stability during a chaotic 2020. You don’t need to be a genius to work out why. Spending on food is one of the more dependable things when economic conditions can go sideways. But this UK share has an additional defensive ace up its sleeve: its heavyweight labels command significant customer loyalty that keep the sales rolling in even when broader consumer spending levels sink.

It’s possible that demand for Premier Foods’s edible goods will pick up in 2021 should the economic rebound kick in, too. Today the business trades on a low forward price-to-earnings ratio of 9 times, leaving plenty of scope for more share price gains in the months ahead.

Supermarket aisle with empty green trolley

Top UK shares for dividend lovers

The following UK shares offer added value for bargain hunters right now. Why? They boast market-beating dividend yields as well as rock-bottom earnings multiples:

#2: Gamesys Group

It’s possible that Gamesys Group could be one of the most exciting all-rounders today. Analysts reckon the online gambling giant will add to stratospheric earnings growth in 2020 with a 14% increase next year. This leaves the business trading on a mega-low forward P/E ratio of 8 times. It also leads to predictions of more dividend increases and a chubby 3.5% yield for 2021.

The online gambling market has exploded in recent years, with expansion accelerating in the wake of the Covid-19 outbreak too. I believe this UK share, through its popular brands like Jackpotjoy as well as through ambitious expansion into Asia, will make monster profits on the back of this trend.

#3: Sylvania Platinum

South African mining giant Sylvania Platinum (LSE: SLP) has been a brilliant growth generator for years now. Annual earnings have grown by double- and triple-digits for the past half a decade and City analysts reckon this trend will continue with a 71% rise in this fiscal period (ending June 2021)

Platinum group metals (or PGM) demand has rocketed in 2020 thanks to strong demand for safe-haven commodities. Surging investment demand has subsequently blown revenues at Sylvania higher and underpins those bright earnings estimates. And the UK share can expect industrial demand to rebound strongly (and particularly from the key automotive sector) as economic activity picks up.

Today Sylvania Platinum trades on an ultra-low forward P/E ratio of 4 times. It carries a gigantic 14.5% corresponding dividend yield as well. I think such figures could make the mining ace a seriously brilliant stock for my ISA.

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 no position in any of the shares mentioned. 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.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- 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.