The clock’s ticking! UK share investors have just over a month to max out their Stocks and Shares ISA allowance of £20,000 for the current tax year, if they’re able to. Allowances can’t be rolled over beyond April 5.
Of course, if I still had some cash to spare and hadn’t used my full allowance, I wouldn’t need to buy UK shares as soon as I transferred money into my Stocks and Shares ISA. I can choose to use that money to buy stocks days, weeks, maybe even months into the future if I want to.
This is not to say that now’s not a great time to buy shares though. Here are a few cheap UK stocks I think are great buys for ISA investors like me today.
Gold miner Centamin offers plenty of all-round value at current prices. City analysts think annual earnings here will rise 15% in 2021, leaving the company trading on a price-to-earnings (P/E) ratio of just 11 times. Meanwhile, a forward dividend yield of 6% smashes the broader average of 3.5% for UK shares to smithereens.
That said, I can’t ignore the fact that a healthy economic recovery could hammer prices of safe-haven assets like gold that tend to prosper in uncertain times. But I think this might be offset by rising fears that global inflation is about to spike, damaging the value of traditional paper currencies. I’m also encouraged by the steps this UK mining share is making to boost production over the next few years.
Another top UK dividend share
I think that Direct Line Insurance Group (LSE: DLG) offers plenty of value to ISA investors like me too. The general insurance provider’s 7.2% dividend yield for 2021 is the real show-stopper here. A forward P/E ratio of 13 times meanwhile makes it cheaper on paper than some of its rivals like Admiral and Sabre Insurance.
City analysts reckon earnings at this UK stock will rise 8% in 2021. This reflects the steps the firm is taking to reduce costs and improve the performance of its brands other than Direct Line itself on price comparison websites. Bear in mind, though, that the nature of its business means that profits forecasts can take significant whacks on unforeseen events. Covid-19 caused a spike in travel-related claims at Direct Line last year. Other events, from terrorist attacks to weather-related incidents, can take a big bite out of the bottom line too.
A cheap FTSE 100 stock
Finally, I think WPP offers very good value at current prices as well. The FTSE 100 company trades on a sub-1 price-to-earnings growth (PEG) ratio of 0.5 and sports a 3.8% dividend yield for 2021.
Marketing budgets are extremely sensitive to the broader economic environment. Thus a lumpy recovery from the Covid-19 crisis could derail City expectations that WPP’s earnings will rise 26% this year. However, I’d still buy this UK advertising share on its solid long-term profits outlook. I’m particularly encouraged by its efforts to embrace the digital arena (this week it acquired mobile commerce specialist NN4M to bolster its e-commerce credentials even further).
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Admiral 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.