I don’t care that the outlook for the global economy remains fraught with danger. The threat posed by Covid-19, Brexit and renewed trade wars won’t stop me from investing. This is because there are stacks of UK shares that I think could deliver big dividends in 2021 regardless of broader economic conditions.
Here are two dividend stocks I’m thinking of adding to my own Stocks and Shares ISA today. I think they’ll dish out appealing shareholder returns for years to come:
#1: The green machine
I see The Renewables Infrastructure Group’s (LSE: TRIG) as an ideal big yielder for these worrying times. This UK share owns and operates dozens of wind and solar farms (and one battery storage asset), all across Europe.
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The business of energy generation goes on during economic upturns and downturns, giving TRIG (as it’s known) the sort of robust earnings visibility that’s essential for those seeking dividends year after year. But this isn’t the only trick up this energy giant’s sleeve, of course. Low- and zero-carbon energy in particular will remain in high demand in the 2030s and beyond.
The European Commission, for example, plans to source 32% of all its energy needs from renewable sources by the end of the decade. This is up from 20% today. This offers companies like TRIG good growth opportunities in the years ahead.
At current prices this UK share offers up a 5.2% forward dividend yield. This is a stock I expect to deliver such shareholder payouts long into the future.
#2: Another top UK share for uncertain times
Like energy consumption, our need to keep a roof over our heads remains constant, whether or not economic conditions are worsening. So I think this makes The PRS REIT (LSE: PRSR) another dividend stock for defensively-minded investors like me.
It invests in new-build family homes in the private rental sector (hence PRS). The shortage of available rented homes in Britain is colossal, and this is driving tenant costs higher and higher. However, the supply/demand imbalance in the family house segment is colossal. It’s why PRS REIT said that the number of applicants on its reservation list for completed homes remained “high” at the end of 2020.
The property colossus is making the most of this opportunity by ramping up homes production. It completed on 3,163 homes as of the end of December, up 529 from six months earlier. And PRS REIT has been active on the acquisition trail to add to its portfolio too. Last month it paid £19m to pick up 123 homes in Greater Manchester from BlackRock Real Assets.
One final reason why I like PRS REIT: under real estate investment trust rules this UK share must distribute 90% of annual profits to its shareholders by way of dividends. This reinforces my belief that the business will dole out big investor payouts for years to come, as long as it continues to do well. In the meantime share pickers like me can enjoy a 5.2% dividend yield for the current financial year.
