The Motley Fool

Two FTSE 100 dividend stocks I’d buy for my ISA today

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.

EU and UK flag on broken wall
Image source: Getty Images

With the ISA deadline approaching quickly (5th April), today I’ll be looking at two FTSE 100 dividend stocks that I’d buy for my ISA right now. One is more of a high-income play, while the other should offer a nice mix of capital growth and dividends going forward.

Energy giant

First up, Royal Dutch Shell (LSE: RDSB), which offers considerable investment appeal at the moment, in my opinion. There are a number of reasons I’d buy Shell shares today.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

For a start, there’s the dividend appeal of the stock. Not only is Shell’s yield high at 5.8% currently, but the company also has a fantastic long-term dividend track record, having not cut its payout since World War II. As such, investors all over the world, ranging from billion-dollar pension funds to private investors, rely on Shell for its dividend.

Another reason I like the look of Shell right now is that it could provide an element of protection from Brexit. As a global energy group that has operations in 70 countries, what happens with the UK economy when/if Brexit takes place is largely irrelevant to the group’s fortunes. Moreover, if the pound was to fall, Shell’s dividends would actually be worth more to UK investors, as the group reports in US dollars.

Of course, Shell shares aren’t without risks and one key risk is fluctuations in the price of oil. If the oil price tanks, Shell’s profits could dry up. Yet the company has shown in recent years that even if the oil price does fall significantly, it can still find a way to pay its dividend. Trading on a P/E of around 12, I see value in the shares at present.

Market leader

Another FTSE 100 stock that I really like the look of right now is Hargreaves Lansdown (LSE: HL) – which runs the UK’s largest investment platform.

Hargreaves is not a particularly cheap stock, as the company has an excellent growth track record and subsequently often trades at an elevated valuation. Right now, the shares are trading on a forward-looking P/E of 34. However, at its current share price of 1,776p, the stock is around 21% below its 2018 share price high after the global equity market sell-off late last year spooked investors, and as such, I think now could be a good time to take a closer look at it while it’s slightly out of favour.

What I like about Hargreaves is that there’s a long-term theme at play here. As I’ve often noted in the past, Britons desperately need to save and invest more for retirement. And as the market leader in the investment space here in the UK, with a market share of around 40%, I think Hargreaves looks very well placed to capitalise.

Another reason I like the stock is that over time, equity markets tend to go up. This means that the value of the group’s assets under administration should continually rise over time, which should, in theory, translate to higher fees for the group.

One risk here is that of fee compression. The company’s fees are quite high and it may need to reduce these in the future. However, overall, there’s a lot I like about HL shares. I’d be happy to buy right now for my ISA.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Edward Sheldon owns shares in Royal Dutch Shell and Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.