The Motley Fool

FTSE 100 watch: 2 UK shares I’d buy before the ISA deadline

Image source: Getty Images

The deadline to max out this year’s ISA allowance is rapidly approaching. UK share investors have just over a month to make the most of their £20,000 annual investment allowance before it’s lost forever.

I’ve continued to invest in my Stocks and Shares ISA despite the uncertain economic outlook. And there are plenty more UK shares on my shopping list. Here are a couple from the FTSE 100 I’m considering buying before the April 5 deadline.

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...

A great UK gaming share

The threat of severe regulatory action is never far away for gambling operators. Indeed, the powers-that-be have been taking fresh action in recent weeks that threaten to damage profits at the likes of Entain (LSE: ENT).

But I still think this UK share is an attractive buy because the online betting sector grows at an eye-popping rate. Recent financials from Entain showed online net gaming revenues leapt 27% in 2020. The FTSE 100 firm has restarted its acquisition programme to capitalise on this fast-growing industry too. It recently splashed the cash to enter the Portuguese market and its planned acquisition of Enlabs will give it a strong foothold in Baltic states too.

Private investor buying UK shares at home

City analysts believe that Entain’s earnings will edge 1% higher in 2021 before soaring 38% in 2022. A word of warning, though: this UK share trades on a forward price-to-earnings (P/E) ratio of 26 times. A high rating like this could cause its shares to sharply correct if trading conditions deteriorate.

5%-plus dividend yields

I’d happily add BAE Systems (LSE: BA) to my Stocks and Shares ISA too. Recent financials from the firm underline how strong the trading environment remains. The FTSE 100 engineer said that sales had risen 4% in 2020 to £20.9bn. Order intake meanwhile rose 13% year-on-year, also to £20.9bn. And it painted a bright picture looking ahead, noting that it expected “another year of top-line growth” in 2021 along with additional margin progression and good cash flow.

I don’t think BAE Systems’ key Western customers will be cutting defence spending any time soon given the volatile geopolitical backcloth. Don’t forget that worldwide arms expenditure recently rose at its fastest pace for a decade.

Right now, brokers reckon annual earnings at this UK defence share will rise 10% and 9% in 2021 and 2022 respectively.

These bright estimates leave the FTSE 100 company trading on a low earnings multiple too. Today it carries a price-to-earnings (P/E) ratio of 12 times. In addition, they encourage the number crunchers to predict that BAE Systems will keep paying big dividends too. The yield for 2021 sits at 5.4% for this year and for next year it moves to 5.7%.

But City forecasts are no guarantee of future performance, of course, and problems with the development and production of military hardware are nothing new and could hurt the investment case. 

And while I don’t see any defence cuts on the horizon, in past economic downturns, the amount countries spend on armaments has come under pressure as public purses have taken a whack. That could still come to pass, even though for the time being, defence spending on the whole looks like it will keep on rising.

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.