The Motley Fool

£3k to spend on your ISA? I’d buy this 6% dividend yield and hold it for 10 years

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.

Stack of new bank notes
Image source: Getty Images.

Taking the plunge on Britain’s banks is risky business right now. Throw in a dark economic outlook for the UK economy over the medium term, the persistence of low interest rates, and still-booming PPI provisions, and it’s no surprise that many (including myself) are concerned about their profits and dividend potential in 2020 and beyond.

Those wanting to grab a slice of the banking sector shouldn’t be put off completely, however. It’s still possible to make great returns here; investors simply need to look away from home shores and to businesses making a splash abroad. Take Bank of Georgia Group (LSE: BGEO) as a perfect example.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Wow @ profit growth

The Eurasian banking mammoth has long been a favourite of mine thanks to the rate at which the economy in that part of the world is growing. And my confidence has been reinforced today by fresh financials, numbers that have sent the FTSE 250 firm’s share price 10% higher from Wednesday’s close.

In that statement Bank of Georgia advised that operating income rose 5.9% in the three months to September, to 285m Georgian lari, a result which powered pre-tax profit (excluding one-off items) 20.9% higher year on year, to 134.3m lari.

I’ve long championed Bank of Georgia’s long-term profits prospects as economic growth in the far-flung territory dwarves those one can expect in developed markets like the UK. But thanks to regulatory changes that have transformed the Georgian banking sector over the past year the country’s financial houses are on much safer ground than ever before, as higher-yielding yet higher-risk loan products are being weeded out of the system.

Growth + income

Many investors continue to turn their noses up at Bank of Georgia and prefer to invest in more familiar names like Lloyds and Barclays, but in my opinion they’re missing a trick here. Modernisation in the banking industry is clicking along at an impressive rate and this particular firm is investing heavily to push this forwards.

Take Bank of Georgia’s steps in the fast-growing world of digital banking, for example. It has doubled the size of its digital workforce over the past year and taken steps like installing dedicated digital spaces in its branches, launching its ‘Business iBank’ online platform, and consistently tweaked its internet bank and mobile app to capture customers. And the steps seem to be paying off, as seen in the 131% explosion in mobile banking transaction in quarter three.

No wonder, then, that City analysts expect earnings at the FTSE 250 business to swell 15% in 2020 alone. And there are two other reasons to celebrate this projection: as well as leaving Bank of Georgia dealing on a rock-bottom forward price-to-earnings ratio of 5.5 times, it leads to predictions of some scintillating dividend growth. Based on its rock-bottom valuation and its huge 6% yield for next year I reckon the banking behemoth is too good to miss.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.