These boring but beautiful picks will always have a place in my Stocks and Shares ISA

Harvey Jones is building his Stocks and Shares ISA around seven FTSE 100 dividend stocks that should slowly reveal their charms over time.

| More on:

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.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

My Stocks and Shares ISA has two roles. The first is to build up my wealth while I’m working. The second is to release income after I retire.

I’ve got some whizzy growth stocks in there, including cosmetics maker Warpaint and outsourcing firm Costain Group. But I’ve also got a heap of income-paying FTSE 100 blue-chips, and I’m pinning most of my hopes on them.

Today, they’re largely overlooked by investors, who would rather ride with the Magnificent Seven US tech heroes. My FTSE faves may be a little boring but they’re beautiful in their own way.

Should you invest £1,000 in Rolls-Royce right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls-Royce made the list?

See the 6 stocks

FTSE 100 beauties

I prefer to buy stocks when they’re out of favour, rather than riding high. That allows me to pick them up at a discounted price, and secure an elevated yield.

My view is that UK dividend stocks would swing back into favour once interest rates peak and savings rates and bond yields fell. That scenario has taken longer to pan out than I hoped, but it should happen at some point. And when it does, I hope to bag some share price growth on top of my dividend income.

My favourite less-than-magnificent seven blue-chips are GSK (LSE: GSK), Lloyds Banking Group, Legal & General Group, M&G, Phoenix Group Holdings, Unilever and Taylor Wimpey.

They’re dull compared to, say, Nvidia and Tesla, but do offer the occasional flash of excitement.

The Taylor Wimpey share price is up 33.79% over the last year. And it still has a trailing yield of 6.1%. Lloyds is up 29.11% and yields 4.64% (that’s forecast to hit 5.5%).

Created with Highcharts 11.4.3Taylor Wimpey Plc + Lloyds Banking Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The Phoenix share price has been boring for yonks but it does yield 9.92%. It was a beautiful day when the last dividend hit my portfolio.

Dividend income heroes

GSK‘s been interesting, but in the wrong way. I bought its shares in March and again in June, thinking it was due a share price recovery. So far, I’m down 10.73%. These are early days but I expected better. Over one year, they’re up 8.61%.

Created with Highcharts 11.4.3GSK PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Pharmaceutical stocks are thought to be defensive but can also be volatile. Bringing new treatments to market is a tortuous process, with potential failure at every turn. Even the blockbuster successes will come off patent at some point, hitting sales, so exciting new treatments need to be found.

Plus there’s the threat of litigation. GSK’s heartburn treatment Zantac has been accused of causing cancer. News that cases would go to trial in the US knocked 10% off the GSK share price in a single day. It has yet to recover and probably won’t until the trial is done. And maybe not even then if the verdict goes the wrong way.

I’ll stick it out though. Over the longer run, I think GSK shares will come good, and today’s so-so 3.89% yield will finally recover.

These seven oh-so-boring stocks will sit in my Stocks and Shares ISA for years doing their thing. When I retire, I expect them to deliver a stream of tax-free income, and maybe some capital growth too. Beautiful.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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.

Harvey Jones has positions in GSK, Legal & General Group Plc, M&g Plc, Phoenix Group Plc, and Taylor Wimpey Plc. The Motley Fool UK has recommended GSK and M&g Plc. 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.

More on Investing Articles

Calendar showing the date of 5th April on desk in a house
Investing Articles

Here’s how a £20k ISA could produce £1,580 of passive income in the next year

A Stocks and Shares ISA stuffed with dividend shares can be a lucrative source of passive income. Christopher Ruane explains…

Read more »

Investing Articles

Prediction: 12 months from now, £5,000 invested in Tesla stock could be worth…

Tesla stock has endured a miserable year so far, falling by 29%. Muhammad Cheema takes a look at how it…

Read more »

Investing Articles

See what £10,000 invested in Tesla shares at their mid-December peak is worth today 

As the world absorbs the full scale of Donald Trump's tariffs, Tesla shares are reeling. Investors who bought the stock…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Dividend Shares

2 ‘safe’ LSE dividend stocks to consider as global markets sell off

As global markets experience high levels of volatility due to economic uncertainty, investors are piling into these ‘safe-haven’ dividend stocks.

Read more »

Investing Articles

US stock market rout: an unmissable opportunity for investors?

His tech-heavy portfolio has been smashed by Trump’s tariffs. However, Dr James Fox believes there could be some opportunities in…

Read more »

Investing Articles

After a 13% ‘Trump tariff’ fall, is the Barclays share price too cheap to miss?

Does the Barclays share price fall mean we should all panic and run screaming from the stock market? Nah, of…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

2 investment trusts to consider for a Stocks and Shares ISA

These two investment trusts have a different focus -- but our writer sees both as worth considering, one more for…

Read more »

Investing Articles

Deutsche Bank reiterates Buy rating on 9.6% yielding FTSE 250 stock that was “most shorted in UK”

Our writer investigates why a major broker remains optimistic about a FTSE 250 stock that was once the most shorted…

Read more »