This post was originally published on this site

2020 has proved to be a challenge (to put it politely) for dividend investors. If you held UK shares at the start of the year it’s likely that you’ve seen your income flows take an almighty whack.

© Provided by The Motley Fool The UK national flag in front of Canary Wharf skyscrapers where professionals trade shares for a living.

More than three-quarters of companies cut or cancelled dividends as Covid-19 lockdowns came into full swing during the second quarter, data shows. This compares with just 40% following the banking crisis a dozen years ago. And it’s possible that shareholder payouts could come under the cosh again before long as coronavirus infection rates rise all over the globe.

UK shares STILL pay inflation-beating dividends

It’s clear that UK share investors need to be extremely careful before parting with their cash. But there’s no reason for them to pull up the drawbridge and stop buying stocks entirely. There are plenty of UK shares that should continue doling out chunky dividends to their investors despite the global economic meltdown.

© Provided by The Motley Fool A person holding onto a fan of twenty pound notes

Companies with defensive operations like utilities providers, food producers, and general insurance specialists can be expected to continue delivering handsome income flows. Their bottom lines tend to be stable during economic upturns and downturns. And there are plenty of more cyclical British stocks with enough balance sheet strength to navigate the current choppy waters and continue paying out big dividends.

Load Error

According to Link Group, the dividend yield for UK shares for the next 12 months sits between 3.6% and 3.3%. Even at the lower end, this trumps the returns on offer from cash products like Cash ISAs. Even the best-paying of these ISAs offers a paltry sub-1% interest rate.

3 top dividend stocks I’d buy in an ISA

In fact, the stock market crash of early 2020 has pushed the yields of many UK shares way beyond those calculated by Link Group. Take power grid operator National Grid, for example. It carries an enormous 5.8% forward yield at current prices. Fellow FTSE 100 royalty and telecoms titan Vodafone Group sports an 8% yield, meanwhile. And food ingredients manufacturer Tate & Lyle carries a juicy 4.3% dividend yield.

Investors don’t need to be worried that these yields look a little inflated, either. These UK shares both have notoriously defensive operations and can lay claim to operating rock-solid balance sheets too. They are just a taster of the excellent dividend stocks that share pickers can choose from right now. And The Motley Fool and its packed library of quality exclusive reports can help you to dig out even more.

I’ve continued to buy UK shares for my Stocks and Shares ISA and I reckon you should keep buying too. The 2020 stock market crash has created an excellent opportunity for you and me to buy quality shares at rock-bottom prices. So do some research and keep buying dividend stocks for your investment portfolio. You still have have a terrific chance to get stinking rich despite the global economic downturn.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

More reading

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.

The post Stock market crash: Why I think NOW is the time to buy high-dividend-paying UK shares appeared first on The Motley Fool UK.

Continue Reading