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10% dividend yields! 2 cheap UK shares I’d buy in my Stocks and Shares ISA!

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I do love a good bargain. So I think it’s fortunate that there are lots of low-cost quality UK shares around. The uncertain economic outlook isn’t damaging my appetite for British stocks. Here are two I’d happily add to my Stocks and Shares ISA right now.

#1: The price is right

I believe that B&M European Value Retail (LSE: BME) is a great UK share for all-round value. Not only does it sport a forward price-to-earnings growth (PEG) ratio of just 0.3. The budget retailer carries a mammoth dividend yield of 10.5% for this fiscal year too.

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This FTSE 100 stock isn’t immune to the dangers posed by the slumping British economy. The retailer might be considered ‘essential’, sure. But demand for many of its discretionary product lines could sink if broader consumer spending power comes under pressure in the months ahead. B&M is also being whacked by inflationary pressures that have pushed distribution and transport costs higher in recent times.

That said, I see B&M as a perfect UK share for me in these uncertain times. The might of discount grocery chains Aldi and Lidl has its origins in the late 2000s and early 2010s. Following the banking crisis demand for their essential goods rocketed as cash-strapped consumers tried to stretch their shopping budgets to the limit. I’m expecting B&M to thrive in the coronavirus era just as the German supermarkets did back then.

B&M’s decision to pay a 20p per share special dividend last month underlines just how bright its profits outlook is. With the retailer remaining committed to UK expansion, too, I think profits here will thrive in 2021 and beyond.

Hand holding pound notes

#2: Another quality UK dividend share

Getting exposure to platinum group metals (or PGMs) is another path I want to take at the start of 2021. Yes, prices of the precious metals might suffer if signs of an economic rebound begin to splutter. The automotive sector is responsible for around four-tenths of total platinum demand and weak car sales could naturally hamper metal prices.

But I believe 2021 will be another strong year for PGM values. It’s a scenario that should keep profits at UK mining share Sylvania Platinum (LSE: SLP) moving higher. This isn’t just because the signals for the global economy continue to get stronger. It’s also because rising green legislation means that more and more metal is needed in catalytic converters. Additionally, low central bank rates and vast quantitative easing programmes are set to persist. Consequently investor demand for hard currencies is likely to keep rising as fears over the worth of paper currencies rise.

Today Sylvania Platinum trades on a mega-low forward price-to-earnings (P/E) ratio of 7 times. It carries a 10.2% dividend yield for 2021 as well. Having weighed up the risks, I think this UK share could be too good for me to miss at current prices.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended B&M European Value. 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.