Have £3k to spend? A 6% dividend yield I’d buy for my ISA before December

This monster dividend yield is a great buy before the new month rolls in, says Royston Wild.

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Investors looking to load their Stocks and Shares ISAs with top dividend stocks might want to give Marston’s (LSE: MARS) some attention today. Full-year results are scheduled for Wednesday, 27 November, and I reckon some perky numbers on current trading could be in the offing.

That’s not to say that the pub operator got the new fiscal year (to September 2020) off to a flyer last time out. In October it warned that underlying pre-tax profits would come in at around the same level as the year just passed (at around £101m). It said that strong operating profit would be offset by high interest costs and increased investment in staff among other things. 

However, the share price fall that accompanied that release has been all but erased since then. Admittedly, though, investor appetite for Marston’s fizzed in August, following the takeover of industry rival Greene King by Hong Kong real estate giant CKA.

I would argue that Marston’s still requires some attention despite these recent gains. At current prices, it trades on a forward price-to-earnings ratio of 9.5 times. It also sports a monster 6% forward dividend yield, which smashes the corresponding UK mid-cap average of 3.3% to smithereens.

Toast this!

Forget that Greene King news; there are other reasons to buy Marston’s shares today, I’d argue. Steps to accelerate the reduction of its debt pile through asset disposals is already getting off the ground. Marston’s sold off 137 of its pubs to Admiral Taverns for a cool £44.9m earlier this month.

Meanwhile, that October release showed sales accelerate during the final 10 weeks of the financial year, giving it solid momentum into the new year (up 1.9% on a like-for-like basis versus 0.8% over the whole 12 months).

Growth hunters might want to look elsewhere, but there is clearly still a great deal for income investors to sink their teeth into. And that updated disposal programme should give Marston’s the financial firepower to keep offering up market-mashing dividend yields beyond the near term.

Before you go…

I’d also happily buy D4T4 Solutions (LSE: D4T4) shares before December – the tech giant is scheduled to put out half-year numbers shortly (on Monday, 25 November, to be precise) and another cheery release looks to be on the cards.

Now look – D4T4, which collects, manages, and analyses data for its broad range of clients, doesn’t offer up the sort of yields as the aforementioned FTSE 250 giant. In fact, for the fiscal year to March 2020, the yield sits in line with the current rate of Consumer Price Index inflation in the UK, at 1.5%.

I would argue, though, that the rate at which D4T4’s annual dividends have grown in recent years makes it a great income pick (these rose 20% in financial 2019, to give you a taster). The 3p per share reward last time out is predicted to rise to 3.3p in the current period. 

Given the pace at which D4T4 is stacking up new contract wins and renewals it’s quite probable that both profits and shareholder payouts will keep surging. In my opinion it’s a great buy in anticipation of some big dividend cheques in the years ahead.

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.

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