Have £5k to spend? I’d buy these top dividend stocks for my ISA and hold them for 10 years

Looking for dividend heroes to stash in your Stocks and Shares ISA? These shares could help you to retire richer, Royston Wild believes.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Have some spare pounds to invest but put off by the sharp cool-down in the global economy?

Well don’t let that stop you. There’s still a wide range of top income shares that could still make you a mint in the near term and beyond. Take ContourGlobal (LSE: GLO), for example, whose role as owner and operator of electricity plants all over the world gives it terrific earnings visibility, not to mention predictable cash generation, even with an increasingly-troubled macroeconomic outlook.

Not that investors will likely have to wait long to ride the power play’s brilliant investment case, however. With profits predicted by City analysts to explode through to the close of next year, dividend yields are expected to keep rocketing too, resulting in monster dividend yields of 6.6% for 2019 and 7.2% for next year. And in the long term, ContourGlobal’s a great play on booming energy demand in the emerging markets of Africa and Latin America.

Dig this

I reckon Watkin Jones (LSE: WJG) is another great ISA pick for income hunters today.

It’s true that a 3.6% yield for the year to September 2020 sits some way below those of ContourGlobal, though this figure still smashes the rate of inflation in the UK right now. Besides, the rate at which the student accommodation provider has already hiked annual dividends in recent times (up 90% in the three years to 2018) still makes it worth sitting up to take notice of.

Watkin Jones is benefitting from booming enrolment in UK universities from both homegrown and overseas students, and the subsequent shortage of available accommodation for these students. The business has a bulging development pipeline (of 9,000 beds through to fiscal 2022) to exploit this fertile environment to the fullest. And so Watkin Jones (which saw adjusted pre-tax profits rise leap 10% in the first half of fiscal 2019) is in great shape to keep delivering brilliant returns up to the end of the 2020s at least.

Ace in the hole

If you’re seeking shares with bigger yields than the UK blue-chip average of 4.5% today, though, you might be happier to splash the cash on 888 Holdings (LSE: 888) instead. For 2019 and 2020, these clock in at 4.7% and 4.9% respectively.

And I’m confident that shareholder payouts should remain on the right side of generous as 888’s ambitious expansion strategy promises to deliver some powerful profits growth. This year the firm has launched into Sweden and Portugal while it’s been busy on the M&A front too, snapping up a sports-betting platform for £15m and a number of well-loved bingo brands from Costa Bingo for £18m as well.

These actions saw the number of first-time depositors across its brands balloon 20% in the first six months of 2019, and so robust is the company’s balance sheet that it can continue pursuing its excellent growth strategy with gusto. Forget about the regulatory uncertainties that come with the gambling industry, I’m confident that 888 will still keep delivering some mighty shareholder returns over the next decade.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »