It’s that time of year again. The tax year is coming to an end, and many investors are rushing to fill up their ISAs before it’s too late.
Choosing the perfect ISA investment isn’t easy but due to the nature of the product, some stocks are more suitable than others. Here are three of the most attractive ISA candidates in today’s market.
Slow and steady
National Grid (LSE: NG) isn’t the most exciting company around, but the company’s shares are one of the most reliable investments on the market today.
National Grid owns and runs the majority of the UK’s electricity infrastructure, and as a result, this is one company with an enormous competitive advantage and economic moat around its business.
Further, it’s highly unlikely that National Grid’s income will suddenly collapse overnight, which makes the company the perfect buy-and-forget investment for even the most nervous investor.
At present, the company’s shares support a dividend yield of 4.5%. The payout is covered one-and-a-times by earnings per share and is expected to rise in line with inflation over the next three years. The shares currently trade at a forward P/E of 15.8.
Out of favour
Due to on-going concerns about the state of the London property market, British Land (LSE: BLND) has fallen heavily out of favour with the market this year. Indeed, year-to-date the company’s shares have fallen 11.6%, underperforming the wider FTSE 100 by around 10% excluding dividends.
However the good news for those looking to buy-in is that after these declines, British Land is now trading at a significant discount to its net asset value. Back in November, the company reported a 7.5% rise in half-year NAV to 891p. So at current prices, British Land’s shares are trading at a 22% discount to NAV. To put it another way, by buying British Land shares, you’re buying London property at 22% below market value.
What’s more, the company’s shares currently support a dividend yield of 4.1%. The company’s directors also believe that British Land’s shares are undervalued at current levels as they’ve been increasing their own stakes in the real estate company.
Ageing population
The provision and management of pensions is big business, and one of the UK’s largest pension providers is Standard Life (LSE: SL).
After a rough start to the year, Standard Life’s trade at an extremely attractive valuation of 13 times forward earnings which, when considering the company’s defensive nature and the long-term outlook, appears too good to pass up. Moreover, the company’s shares currently support a dividend yield of 5.3% and the payout is expected to increase by around 20% over the next two years leaving the shares yielding 6.1% for 2017.
City analysts expect Standard’s earnings per share to jump by 97% this year and then a further 10% during 2017.
