Time is running out for UK investors to add money to their ISAs so they can buy stocks this financial year. The new year starts on April 5, but that’s Easter Day and the stock market isn’t open Good Friday or Easter Saturday.
That means investors only have one week left to get cash into their accounts. But while they don’t have to invest that straight away, there are plenty of interesting opportunities worth considering right now.
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Buy the dip?
One potential idea is InterContinental Hotels Group (LSE:IHG). Shares in the FTSE 100 hotel chain are down 6% in the last month.
The main reason is the conflict in Iran, which is disruptive to travel and tourism. And the risk is that it continues longer than expected.
A 6% decline isn’t exactly a crash, but this is an unusually high-quality business. Its low capital requirements make it very attractive.
This comes from not owning the hotels in its system outright. Operating costs get left to local owners who pay to be part of the firm’s network.
It also has an attractive growth pipeline representing 33% of its existing network. And the cost of that expansion should be minimal.
The stock isn’t exactly in deep value territory. But a quality business that’s facing temporary challenges might be worth checking out.
Keeping it simple
A stock that has gone down a lot is Diageo (LSE:DGE). A 54% decline means it’s at a price that would have been unimaginable five years ago.
Since 2021, though, revenue growth has stalled and margins have contracted. That’s due to a number of issues, some of which are still ongoing.
One of these is changes in consumer preferences. And despite having a strategy, Diageo has been slow to react to these.
That, however, is changing. Under Sir Dave Lewis, the firm is looking to use its scale to be more competitive on price.
It isn’t guaranteed to work, especially with consumer budgets under pressure. But it’s clear that doing the same thing is also risky.
The firm also has plans to improve its balance sheet and simplify its operations significantly. At today’s prices, I think it’s worth a look.
Something a bit different
It’s not uncommon to find real estate investment trusts (REITs) with high dividend yields. But AEW UK REIT (LSE:AEW) is a bit different.
REITs usually focus on securing long leases on properties with high demand to secure reliable income. AEW, however, does the opposite.
Long-term contracts offer stability, but often at the cost of growth. And high demand often leads to more competition from rivals.
Instead, AEW focuses on properties where supply is scarce, limiting choices for tenants. And shorter leases create opportunities to increase rents.
The downside is that if a tenant goes bust, it’s harder to find another one. That’s a risk, but the compensation for it is a 7.7% dividend yield.
It’s an unusual approach, but the firm has an excellent record. So I think it’s one for dividend investors to think about before April 3.
Stocks and Shares ISAs
Investing in a Stocks and Shares ISA can make a huge difference to long-term returns. But the deadline for adding cash to an account this year is April 3.
If the £20,000 contribution limit isn’t added to an ISA, it can’t be carried over. So this might be the most important time of the year to think about your investing strategy.
