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3 Super Income Stocks For Your ISA: Banco Santander SA, British American Tobacco plc & RSA Insurance Group plc

Santander

Since the turn of the year, shares in Santander (LSE: BNC) (NYSE: SAN.US) have fallen by 8% while the FTSE 100 is up 1%. A key reason for this is the share placing that was announced by the bank, as it seeks to shore up its financial position. A result of the share price fall is an even more appealing valuation with, for example, Santander now trading at a sizeable discount to the FTSE 100. In fact, its price to earnings (P/E) ratio is just 12.5, versus over 16 for the wider index.

In addition, Santander’s yield has improved due to its share price fall, with the globally diversified bank now yielding a relatively appealing 3.3%. However, with healthy growth in the bank’s bottom line forecast, Santander’s dividends per share are all set to rise by 11.8% next year. As such, it could prove to be a top income play over the medium to long term, and appears to be worth adding to your ISA.

British American Tobacco

Although shares in British American Tobacco (LSE: BATS) (NYSE: BTI.US) are up a somewhat disappointing 4% since the turn of the year, it remains a very consistent income stock. Furthermore, British American Tobacco is expected to increase dividends per share by 7.7% in the current year, followed by 7.3% next year. Clearly, this is far in excess of inflation and means that, in 2016, the tobacco company could be yielding as much as 4.2% at its current share price.

Of course, a key reason for this expected dividend growth is an improving bottom line. British American Tobacco’s earnings have stalled somewhat in recent years but, looking ahead to 2016, the company is expected to increase its bottom line by 8%. This is at least partly due to efficiency savings and other cost cutting measures and, in terms of generating longer term growth, its focus on e-cigarettes could lead to index-beating growth once the effect of cost savings becomes limited. As such, British American Tobacco appears to be a top notch income stock for the long run.

RSA

Although it only yields 3.1% at the present time, RSA (LSE: RSA) looks set to become a highly appealing income stock. That’s because the insurance company is continuing to make the changes necessary in order to significantly improve profitability, with its current management team on-track to return RSA to the kind of performance that it was delivering a number of years ago.

In fact, dividends per share are expected to rise by 17% next year, which puts RSA on a forward yield of 3.6%. And, with it having a relatively low payout ratio of 43%, there is considerable scope for further dividend increases even if profit growth is somewhat slower than expected. As such, and while the medium term outlook is still somewhat risky, RSA could prove to be an excellent long term income play, which makes it a perfect stock to buy for your ISA.

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Peter Stephens owns shares of RSA Insurance Group and British American Tobacco. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.