Many investors might be hesitant about buying UK shares at the moment. Indeed, the outlook for many London-listed companies is currently highly uncertain. However, the best investments are often those other investors are avoiding.
As such, I’m going to take a look at five UK shares I believe could produce high total returns for investors in the long run.
UK shares to buy
The first company on my list is the recruitment business Hays. With the unemployment rising around the world, income has plunged at this FTSE 250 recruiter. But I’m interested in the group’s long-term potential.
When the current crisis passes and employees return to the market, Hays’ services will be in demand. This could lead to rapid profit growth and high cash returns to investors. Therefore, I think now could be an excellent time to buy the stock while it trades at a low level ahead of the economic recovery.
Centamin may also be one of the best investments for 2020. I think this gold miner can provide investors with attractive returns, no matter what the future holds for the global economy.
Further economic turmoil could push the gold price higher, which will push up Centamin’s profits. And if the economy recovers, demand for gold jewellery and other gold items will rise. The miner should profit either way. In the meantime, the stock offers a 6% dividend yield.
Tate & Lyle is one of the oldest listed UK shares. Is offers similar qualities to Centamin. As a provider of ingredients to the food and beverage industries, the group’s sales should hold up relatively well, no matter what the future holds for the global economy. A dividend yield of 4.5% is also extremely attractive in the current interest rate environment.
Best investments for 2020
In the blue-chip space, Rio Tinto could be one of the best investments for 2020. The world’s largest iron ore miner may benefit from increased economic stimulus following the coronavirus crisis.
The price of iron ore has increased by more than 20% this year as countries such as China have started spending to offset the impact of the coronavirus slump. This growth could lead to improved returns for Rio’s investors. Analysts have already pencilled in a dividend yield of 7% for the company this year.
Another blue-chip income stock I have my eye on right now is British American Tobacco. Ethical considerations aside, this income champion has produced excellent returns for investors over the past decade.
This trend looks set to continue. The stock currently supports a dividend yield of 8%, and the payout is well covered by earnings per share. Despite this, shares in the tobacco giant are off around 30% since the beginning of the year. Following this decline, I think this could be one of the best investments to buy for 2020.
The post Best investments for 2020: 5 UK shares I’d buy right now appeared first on The Motley Fool UK.
Rupert Hargreaves owns shares in British American Tobacco. 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.
Motley Fool UK 2020