1 high-growth pick to buy for my Stocks and Shares ISA in June

Jonathan Smith runs over his investment case for NatWest Group given recent events, to potentially include it in his Stocks and Shares ISA.

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The new ISA year that started in April is now well under way. I wrote back then about some high-growth stocks that I would want to include in my fresh Stocks and Shares ISA for the coming year. Ideally, I’m looking to buy some stocks each month within the ISA, chipping away at the £20,000 limit. 

As a reminder, any gains I make by selling a stock within my SA are free from capital gains tax. This makes it an appealing home for my investments. It allows me to retain more of the profit in the future. With that in mind, here’s a high-growth stock that I’m looking to buy.

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Banking on a good outlook

Including a bank as a high-growth stock might seem unusual. However, NatWest Group (LSE:NWG) does fit the bill, I feel. The share price is up 67% over the past 12 months, and is still moving higher.

The UK-based bank did struggle during 2020, posting a loss of £351m. This was largely due to the billions in provisions set aside due to the negative impact of the pandemic. This was seen across the industry, so was nothing NatWest specifically did wrong.

I think the outlook is much more positive in 2021. This makes it appealing to include in my Stocks and Shares ISA. For a start, the resumption of a dividend payment has been announced. A final dividend of 3p per share totals £364m. This clearly shows the company has confidence in future profitability, otherwise such funds would likely have been retained.

Also, the UK Government recently sold some of its stake in the business. It reduced the stake to 54.8%, selling £1.1bn in value. The more NatWest stock that goes back into the market, or gets bought back in share repurchases by the bank, the better I think this is. It allows market demand and supply to operate more efficiently.

A risk with adding NatWest shares to my Stocks and Shares ISA is that the bank is heavily exposed to the UK. It recently announced that it’s pulling out of the Republic of Ireland via the sale of Ulster Bank. My concern here is that unlike HSBC and Barclays, the company’s UK exposure makes it more dependent on that one economy.

An addition to my Stocks and Shares ISA

By adding NatWest shares to my ISA for June, it should help to build up my portfolio for the year. Next month, I’ll hopefully find another high-growth stock to buy as well. In this way, I’m not rushed come next April to buy close to the Stocks and Shares ISA deadline.

Thinking ahead allows me to choose my targets as opportunities arise. I think this is a much better way to build up my ISA over time, and I’d look to buy NatWest shares now.

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jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and HSBC Holdings. 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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