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Stock market crash: a 6.3%-yielding UK share I’d buy in an ISA in November

Royston Wild
·3-min read
The letters ISA (Individual Savings Account) on dice on stacks of gold coins on a white background.
The letters ISA (Individual Savings Account) on dice on stacks of gold coins on a white background.

It’s been another tough few days for share investors as the Covid-19 crisis worsens. The spiking infection rate means another UK-wide lockdown lasting at least a month comes in this Thursday. Similar barriers are being put up and travel restrictions imposed across other major parts of the globe too. It’s quite possible that UK share prices have further to fall in the short-to-medium term.

I’m not yanking my hair out in terror though. As a long-term investor, periods of extreme volatility like we’ve been seeing in 2020 won’t stop people like me from making big returns. Those who buy and hold UK shares for 10 years and more make an average yearly return of 8-10%, history shows us.

In fact, heavy stock market falls like those of recent days provide a brilliant buying opportunity for UK share investors. It allows us to pick up quality stocks at low prices, stocks that will surge in value when market confidence recovers.

A top dip buy

There are stacks of brilliant UK shares that appear too cheap to miss today. And there are some in particular that have caught my eye as we move into November. These stocks could rebound sooner rather than later as I expect them to publish positive trading updates in the coming days.

Warehouse REIT (LSE: WHR) is one such stock on my watchlist today. This UK share recently closed at five-month lows, giving eagle-eyed dip-buyers a chance to nip in. Indeed, today is a particularly good time to buy with half-year results slated for tomorrow (3 November). I’m anticipating another set of sunny financials.

Image of person checking their shares portfolio on mobile phone and computer
Image of person checking their shares portfolio on mobile phone and computer

This AIM company isn’t totally immune to these challenging economic conditions. But, as a major provider of logistics and warehousing spaces, it’s benefitted from the stunning growth of e-commerce in 2020. As a consequence, it collected 94% of rents for the June quarter, its last update showed. Furthermore, Warehouse REIT’s list of blue-chip tenants like Amazon and Argos can be relied on to keep rents rolling in.

A UK share with BIG dividends

Warehouse REIT also has mountains of cash to cover any near-term troubles on the rent front. It’s this balance sheet strength that makes the UK share such a terrific dividend stock as well.

City analysts reckon annual earnings will drop 12% in the current fiscal year (to March 2021). Yet they reckon the business has the financial robustness to keep raising dividends. And this results in a monster 6% dividend yield.

Finally, with annual earnings predicted to rebound 27% in fiscal 2022, annual dividends are unsurprisingly expected to spike again. And this nudges the yield to a handsome 6.3%. But don’t just think of this UK share as a dividend hero. A healthy balance sheet means that Warehouse REIT is also investing heavily in its estate to drive future profits growth too.

This is one UK share I’d buy today and hold for years to come. But it’s not the only dividend hero I’d add to my ISA right now.

The post Stock market crash: a 6.3%-yielding UK share I’d buy in an ISA in November appeared first on The Motley Fool UK.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Warehouse REIT and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. 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