Today I’ll be taking a closer look at energy company SSE (LSE: SSE), water group United Utilities (LSE: UU) and media firm Pearson (LSE: PSON). Are these three companies right for your ISA?

Chunky dividends

Energy supplier SSE has always been a safe haven in times of market uncertainty and volatility, with the added attraction of an inflation-proof dividend. The past five years have seen steady dividend growth with yields of around 6%.

Future payouts should be no different. Dividends are forecast at 89.64p per share for this year, rising to 91.69p next year, offering prospective yields of 6.1% and 6.3%, respectively. The company’s valuation is pretty stable with the shares trading on 13 times forecast earnings for the next couple of years, in line with previous levels.

This is a solid, low-risk, defensive stock with very little volatility that makes it a strong ISA prospect. Is there a downside? Well, there’s very little in the way of growth ahead. But if you’re primarily an income investor, SSE has enough to recommend it and is worth putting on your shortlist for those chunky reliable dividends.

Income play?

Utility companies are like buses today – you wait for ages, then two come along at once! So here it is, United Utilities, primarily concerned with providing water and wastewater services in the North-West of England. As it happens, it’s my local water company – I’m drinking its core product right now. 

Does that influence my opinion of UU? Not at all. But the dividend does. Payouts are forecast at 39.15p this year, rising to 39.74p in 2018, offering a prospective yield of 4.3% for the next two years.

United Utilities is a defensive income play, with low risk. Despite the tepid growth prospects that can go hand in hand with such low risk, investors who are risk-averse should have this stock on their radar.

Wait and see

Media and publishing giant Pearson has had a pretty tough year. The shares fell off a cliff back in October when the company issued its latest profit warning. And although the shares have recovered somewhat in recent months, they’re still down almost 40% on the year.

Pearson is undergoing big changes, transitioning away from print-based content to developing more online products, and reducing costs. Despite the problems, the company has pledged to maintain dividends that have reached tempting levels of around 6% due to the fall in the share price. But brokers aren’t convinced, with Goldman Sachs reiterating its sell rating earlier this month.

Pearson’s shares are still not cheap, trading at 17 times forecast earnings for this year, falling to 15 in 2017. But should we be tempted by that inflated dividend yield? Well, not me… the outlook remains uncertain while the company implements huge changes. There are far better opportunities elsewhere.

Time to buy?

Income investors should take a closer look at both SSE and United Utilities as they both offer low-risk defensive qualities and a reliable dividend. Pearson however just offers too many uncertainties at the present time.

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Bilaal Mohamed has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.