Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Stock market crash: which of these dividend-paying UK shares could make you filthy rich?

Published 05/10/2020, 08:15
Updated 05/10/2020, 08:40
Stock market crash: which of these dividend-paying UK shares could make you filthy rich?

Stock market crash: which of these dividend-paying UK shares could make you filthy rich?

2020 has been a difficult time for dividend investors. Hundreds of UK shares have axed, postponed, or reduced shareholder payouts in response to the Covid-19 outbreak and its significant economic impact. There could be more drastic action coming down the pipe should the global economy endure a painful and prolonged downturn too.

There are plenty of UK shares that continue to offer chunky yields. But which of these British stocks should you buy and which should you avoid?

Danger ahead! Royal Dutch Shell’s 5.5% dividend yield looks quite delicious. But the multitude of problems the FTSE 100 oilie faces makes this UK share a risk too far in my book. It’s not just the short-term troubles it faces as the slumping global economy smacks oil demand.

The fight Shell (LON:RDSa) has to adapt to renewables threatens to create plenty of problems over a longer time horizon too. The fossil fuels giant may struggle to keep pace with nimbler green energy operators and faces a sharp slump in crude sales in the meantime.

I wouldn’t be tempted to buy Land Securities either, despite its tasty 4.5% forward dividend yield. In July, the property trust announced plans to reinstate dividends later this fiscal year. But I’m more than a little sceptical that it’ll be able to fulfil this aim.

Shaftesbury illustrated the huge pressure on retail property owners by declaring last week that almost 60% of its own rents due for the second half had gone unpaid. Land Securities has also seen rents plummet since the Covid-19 outbreak, and the end of the government support in the coming months threatens to exacerbate the problem.

A better dividend stock In my opinion, investors seeking chubby dividends from UK shares would be better off investing in Begbies Traynor. Yields here aren’t the biggest (for 2020 its reading sits at 3.4%). But this sort of inflation-beating figure can still provide a decent return for your money. And, in my opinion, the insolvency services expert is in much better shape to keep growing in the current climate.

British Chambers of Commerce data shows that almost half of British businesses reported falling sales in the third quarter, while two-thirds have seen their cash flows keep deteriorating. Counter-cyclical shares like Begbies Traynor are ideal UK shares in times like these. And, unfortunately, the historic slump in the British economy suggests its services will surge in the short-to-medium term.

Helping you to get rich and retire early with UK shares Bebgies Traynor’s just one quality UK share I’d buy to receive big dividends in the near term and beyond though. The London Stock Exchange is packed with income heroes like these. And with the help of The Motley Fool and its huge library of special reports you can find top dividend stocks that could make you rich despite the global economic downturn. So do some research and get investing today.

The post Stock market crash: which of these dividend-paying UK shares could make you filthy rich? appeared first on The Motley Fool UK.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Landsec. 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.

Motley Fool UK 2020

First published on The Motley Fool

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.