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Stock market crash: 2 top UK shares I’d buy in an ISA to retire rich

Roland Head
·3-min read
Business man on stock market crash financial trade indicator background.
Business man on stock market crash financial trade indicator background.

This year’s stock market crash will probably live on in investors’ memories for quite a while. But at times like this, it’s even more important to focus on investing in good businesses. These will usually survive and prosper, even in difficult times.

I believe the companies I’m looking at today are great examples of this. These UK shares have delivered reliable results for many years. They’ve continued to perform well this year. I reckon that buying these stocks and holding them in a Stocks and Shares ISA should help you to retire in comfort.

This UK share is up this year

Some shares bounced back very quickly indeed from the stock market crash. The share price of IT services group Softcat (LSE: SCT) fell by 1,227p to a low of 832p between 19 February and 19 March.

But investors who kept their heads will have seen the value of their shares bounce back to a high of 1,257p by 22 May. In my view, the lesson here is that if you own shares in a good business, then the best plan in a stock market crash is often to do nothing.

Softcat benefited from the shift to working from home and the company says that its revenue rose by 8.6% to £1,077.1m last year. Operating profit rose by 10.9% to £93.7m, a new record.

Shareholders will receive an ordinary dividend for the year of 16.6p, up 11.4% on 2019. The company also plans to play an additional special dividend of 7.6p.

However, management is taking a cautious view on the year ahead. It says that corporate spending — about 75% of sales — is currently cautious due to the uncertain outlook. With Brexit, coronavirus, and a likely recession on the horizon, that’s understandable.

Softcat says that market conditions could be “challenging for a time” and the shares are down today.

Personally, I think the long-term growth potential of this business remains strong. I’d view any serious dip in the share price as a long-term buying opportunity.

Stock market crash: this defensive stock looks cheap to me

My second pick is FTSE 250 soft drink group Britvic (LSE: BVIC). This firm is best known for brands such as Robinsons, J2O and Fruit Shoot. But the company is also the bottling partner for PepsiCo in the UK, producing drinks such as Pepsi and 7UP.

This is a valuable source of income for Britvic and the firm has just signed a new 20-year agreement with PepsiCo, securing this business for the foreseeable future.

Alongside this news, Britvic also issued an upbeat trading report. The company says that performance has improved since pubs and restaurants reopened in July, while grocery sales have remains strong. As a result, full-year profits are expected to be slightly ahead of market forecasts.

Although the shares are up by 6% today, Britvic was hit hard by pub and restaurant closures earlier this year. The shares haven’t yet recovered from the stock market crash and have fallen by nearly 25% over the last year.

I think this is a buying opportunity for long-term investors. At a last-seen share price of 800p, Britvic stock trades on 14 times 2021 forecast earnings, with a prospective yield of around 3.7%. For a defensive business with evergreen brands, I reckon that’s good value.

The post Stock market crash: 2 top UK shares I’d buy in an ISA to retire rich appeared first on The Motley Fool UK.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Britvic and Softcat. 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