Stock market crash: I think these are great dividend stocks to buy in an ISA in August
The Motley Fool
Published Jul 22, 2020 07:56
Updated Jul 22, 2020 08:10
Stock market crash: I think these are great dividend stocks to buy in an ISA in August
Buying UK shares according to how you think their prices will move in the short term is a dangerous game. It’s a particularly perilous endeavour following the 2020 stock market crash and the subsequent fragility of investor confidence. The best stocks to buy are those whose share prices you feel confident will rise over a longer time horizon.
I’m not saying that you shouldn’t consider the possibility of near-term share price gains. It’s just that this should always play second fiddle to the bigger picture. The key to successful investing is to buy quality UK shares with clear advantages over their competitors (or ‘economic moats’), that have strong balance sheets and which are serious operators in growing markets.
Those who make fortunes from UK shares do so over a number of years, not several weeks or months. And these are the sort of stocks to buy if you want to make a fortune from your investment portfolio. But as I say, buying companies like this in view of potential near-term price drivers can help give your final shareholder returns an extra little jolt.
Great stocks to buy in August With that in mind, I reckon Centamin (LSE: CEY) is one of the top stocks to buy for August. This is a well-run gold mining stock with a strong balance sheet and a terrific track record on the production front. Output rose by a better-than-expected 11% during the second quarter, most recent data showed.
I’m tipping Centamin to provide terrific returns over the next decade because I expect gold prices to rocket in value. But investors don’t have to wait long for bullion prices to explode. Yesterday they hit nine-year peaks above $1,815 per ounce. And there’s plenty of worry out there, whether related to Covid-19, Brexit, or low interest rates to drive gold still higher in August.
Such a scenario would lift the share prices of Centamin and its peers too. An undemanding forward price-to-earnings (P/E) ratio of 14 times provides scope for meaty share price gains. And a dividend yield north of 5% makes this a terrific buy for income chasers today.
A FTSE 100 stock with a 6% dividend yield I consider Admiral Group (LON:ADML) (LSE: ADM) to be one of the best dividend stocks to buy before next month too. At today’s prices, the FTSE 100 stock boasts an even-better 6% dividend yield for 2020. I reckon the release of half-year results on August 12 could lift the insurance giant’s share price.
In economic downturns like this, investors flock to stocks that illustrate any sort of trading resilience. I’m expecting Admiral, a major player in the car insurance market, to do just that next month. General insurance demand remains broadly robust whatever broader economic conditions are like. And especially so in the motor market where insuring your car is a legal obligation.
Get The App
I also expect more strong comments surrounding Admiral’s balance sheet. Back in April the FTSE 100 firm lauded its “strong solvency position” that it said was “well above its target level and regulatory thresholds.” Admiral’s robust balance sheet is one of its most appealing qualities, one that should ensure chunky dividends for years to come. I’d happily buy this blue-chip dividend stock for my own ISA.
The post Stock market crash: I think these are great dividend stocks to buy in an ISA in August appeared first on The Motley Fool UK.
us better investors.
Motley Fool UK 2020
First published on The Motley Fool
Written By: The Motley Fool
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.