Guess where I am at the moment…
I’m in London, UK.
And, in case you’re wondering, yes, I did fly in while storm Ciara was at its worst.
Let’s just say it’s an experience I would rather not repeat.
I didn’t come here to gamble with my life. I came to try to gain a deeper understanding of the Brexit situation.
For the last two years, I have been advising investors to avoid U.K. stocks. However, given the recent developments, I’ve changed my opinion.
Positive Trade Developments On All Fronts
I was avoiding U.K. stocks because of Brexit uncertainty.
No one knew if it would happen, when it would happen, or how it would happen.
Now this uncertainty is gone.
Boris Johnson succeeded where his predecessors had failed. He prevented a no-deal Brexit. Meaning that, as of Jan. 31, 2020, the United Kingdom is no longer part of the EU.
The only question remaining is whether London and Brussels can reach a trade agreement.
For me, the answer is obvious. The UK represents the EU’s largest export market, and the EU represents the UK’s largest export market. There’s nearly $1 trillion of bilateral trade on the line. Not to mention that both parties are in dire need of re-igniting their economies. I don’t see how this trade agreement doesn’t come to fruition by the end of the year.
And Boris Johnson bringing Brexit finally across the line is not the only positive development.
Britain is working on another lucrative deal. This one with its second-largest trading partner—the United States.
Both sides have stated on many occasions that the U.S.-U.K. trade deal is a top priority and could be finalized before Trump finishes his first term in office.
These developments make U.K stocks at current prices an exciting investment.
Years of uncertainty have pushed valuations so low that they now trade at a discount of about 35% to their U.S. peers, making this the perfect time to enter the market.
Furthermore, U.K. stocks pay, on average, about twice as much in dividends.
Here are three safe choices worth considering:
Three Low-Risk High-Yield Stocks Trading At Bargain Prices
The first one on the list is one of the largest wireless carriers not only in the U.K. but in the world—Vodafone Group (NASDAQ: VOD).
Altogether, the company has about 275 million wireless customers worldwide. It generates about 15% of its revenues from the U.K. and another 60% from the rest of Europe.
Vodafone pays a dividend yield of 5.06%
The next U.K. stock trading at a discount is LyondellBasell Industries (NYSE: LYB).
The company produces petrochemicals used in different consumer and industrial end products.
Since Brexit, its stock price has been rangebound, but that can’t be said for its dividends. LyondellBasell Industries has been steadily increasing them. They now amount to a 5.03% dividend yield.
The final stock you should look at is Janus Henderson Group (NYSE: JHG).
This company is one of the world’s largest investment managers, offering services to retail, self-directed, and institutional clients.
Janus Henderson derives revenues from all over the world, with about a third coming from Europe.
This stock also comes with a significant 5.45% dividend yield.