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2 ‘top secret’ dividend stocks I’d buy for my ISA with my last £2k

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There’s no such thing as a sure bet when it comes to stock investing. Those who bought into mighty blue-chips Tesco, Centrica or British American Tobacco a decade ago will attest to just how far the mighty can fall in just a short space of time.

That said, I’d be willing to stake my last couple of thousand pounds on Bloomsbury Publishing (LSE: BMY) continuing to deliver terrific shareholder returns for many years to come.

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Pottermania

The evergreen popularity of the Harry Potter franchise has been the publisher’s bread and butter for the past few decades. And there’s no sign Hogwarts-related mania will be dying down any time soon.

Potter prequels such as Fantastic Beasts And How To Find Them continue to attract legions of avid readers and film fans. Meanwhile, Harry Potter And The Cursed Child keeps drawing in legions of theatregoers in the West End and on Broadway, leading to speculation a movie version of the hit book and stageplay is imminent. No wonder Bloomsbury said Harry Potter remained one of its strongest-selling range of consumer titles in the four months to June, more than 20 years after they first hit bookshelves.

It’s important to point out Bloomsbury isn’t just a great play on Pottermania. It’d be an injustice not to mention the enormous profits potential that the small-cap’s drive into the academic and professional publishing arena, a segment where revenues shot 13% higher in the last fiscal year.

Unsurprisingly, City analysts are expecting more meaty earnings growth at Bloomsbury in the medium term (7% and 11% for the fiscal years ending February 2020 and 2021, respectively, to be exact). And this means they’re also expecting the firm — which has raised dividends each and every year for 24 years — to keep increasing the shareholder payout too.

This means that, at current prices, the publisher carries chunky yields of 3.7% and 3.8% for this year and next. Combine this with a forward price-to-earnings (P/E) ratio of 14.4 times and I reckon Bloomsbury’s a top bargain buy for your ISA today.

Fancy some 6% yields?

I’d also be very happy to spend my remaining investment capital to buy shares in Target Healthcare REIT (LSE: THRL). This particular share operates care homes all across the UK and so stands to gain from an increasingly ageing population, and the steady demand for specialist accommodation for this demographic, in the years ahead.

But this isn’t all. Target has plans to supercharge profits growth via an aggressive expansion strategy all over the country, and has recently undertaken a restructuring of its debt facilities and raised equity to give it more firepower on this front. Just last month, the small-cap spent around £19m to add an extra two care homes in Yorkshire and the West Midlands to its estate.

Now City analysts expect Target to pay a 6.6p per share total dividend for the fiscal year ended June and, helped by a estimated 26% earnings rise, predict it’ll rise to 6.7p in the current period. This means investors can enjoy a 6% dividend yield.

I expect the firm to remain a big dividend payer in years to come, thanks to its proactive approach in a market loaded with structural opportunity.

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

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