As a savvy investor, I’m looking for the best mode of investment to ensure I gain maximum returns. I firmly believe a Stocks and Shares ISA is ideal for me.
One of the biggest draws of the ISA for me are the potential tax benefits. Buying stocks within an ISA means I’m LEGALLY exempt from paying tax on dividends and capital gains.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
I’m looking for stocks with the potential to offer me consistent dividends and growth moving forward. With that in mind, one pick I’ve got my eye on is Computacenter (LSE: CCC).
Here’s why I’m hoping to snap up the shares as soon as I have some investable cash.
A brave new world
Computacenter is one of the leading IT infrastructure providers across Europe. The way the world works has changed hugely thanks to technology, and it doesn’t look like that’s slowing down. This is where Computacenter comes in to help firms stay up to date.
The shares have been on a decent run over the past 12 months, up 13%. At this time last year, they were trading for 2,252p, compared to current levels of 2,550p.
The good stuff
Computacenter possesses some core traits that I personally check for when looking to buy a stock.
- The business has a good track record of performance and growth. As mentioned earlier, a huge part of this has been due to the digital revolution. However, I’m conscious that the past is never a guarantee of the future.
- Future growth prospects are bright, if you ask me. This is mainly linked to continued digital adoption, and the artificial intelligence (AI) revolution. This exciting tech could once again change the way the world works. Computacenter’s presence and profile, as well as existing supplier and customer relationships, could mean it’s at the forefront of this revolution.
- The shares look reasonably priced, especially for a tech stock. These types of stocks usually have high valuations. They currently trade on a price-to-earnings ratio of just over 14.
- Finally, dividends help build wealth, and the stock offers a dividend yield of 2.8% at present. If the firm can continue to grow, this could increase. However, I do understand that dividends are never guaranteed.
Risks and final thoughts
There are two issues that concern me about the shares. Firstly, continued economic volatility could have a real impact on Computacenter’s performance and returns, at least in the short term. This is because firms are battling higher costs and looking to cut spending, rather than increase it at present.
The other issue is that of the company’s growth prospects. AI is a huge topic right now, but there’s no guarantee the tech could take off. If sentiment drops, could Computacenter’s growth be stunted? I’ll keep an eye on this.
To conclude, there’s lots to like about Computacenter, in my eyes. It looks like the exact type of stock I’d love to buy for my ISA to help build wealth for me to enjoy later in life.
