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

Investing in the stock market is a brilliant way to increase your wealth over the long term. Indeed, by regularly investing in the market through thick and thin, it’s possible to achieve financial independence in later life. Sheltering your investments from the tax man, by making as much use of your annual ISA allowance as you can, will be a big help.

There are just two weeks to go to deadline day for using the £20,000 allowance for 2018/19. With this in mind, three FTSE 100 dividend stocks I’d be happy to buy for my ISA right now are Coca-Cola HBC (LSE: CCH), Fresnillo  (LSE: FRES) and DS Smith  (LSE: SMDS).

High-growth business

Coca-Cola HBC is one of the largest bottlers of The Coca-Cola Company, and the most geographically diverse. It operates in 28 countries on three continents.

I like the split of volumes between established markets (28%), and emerging and developing markets (72%). Rising wealth and disposable incomes in the latter locations are a great driver for long-term growth, with more people spending more money on world number one soft drink Coke, and other popular brands in the stable, including Fanta and Sprite.

At a current share price of 2,592p (7.5% below its previous high), you’re paying 21.5 times forecast 2019 earnings, and get a prospective dividend yield of 2.1%. The rating is a premium one, relative to many companies, but we should bear in mind this is a brands powerhouse, with a long record of average annual double-digit earnings and dividend increases. This looks set to continue well into the future, due to the aforementioned footprint in high-growth emerging and developing markets.

Silver lining

Fresnillo is the world’s leading silver producer and Mexico’s largest gold producer. It owns a portfolio of low-cost, long-life mines. And with it also having high-potential development projects and advanced exploration prospects, there’s a pipeline of growth for years to come.

The high quality of its assets enables it to operate profitably even at times when precious metals prices are depressed. This was the case last year, when lower than expected ore grades and some operational issues also impacted performance, despite record annual silver production.

The current share price of 834p is over 40% below its level at the start of 2018. I view this weakness as a great opportunity to take a stake in the business for its longer-term prospects. A rating of 22 times forecast 2019 earnings falls to 18 times for 2020, on expectations of accelerating momentum. Meanwhile, the prospective dividend yield rises from 2.4% to 2.7%.

Compelling valuation

Packaging group DS Smith, which operates across 37 countries, is another stock that’s somewhat out of favour with the market. While its current share price of 342p is up from a sub-300p level in late December, it’s still well below last summer’s highs of over 500p.

I believe market concerns about global economic growth and rising supply from Chinese containerboard producers may be weighing on sentiment. However, I reckon DS Smith’s customer bases — large e-commerce companies (think Amazon) and fast-moving-consumer-goods groups (think Unilever) — make it an attractive business for long-term growth.

The company is trading on just 9.8 times forecast earnings for its financial year ending 30 April, while the forecast dividend gives a chunky yield of 4.8%. And with analysts having pencilled-in double-digit earnings growth for fiscal 2020, I believe the value here is compelling.

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G A Chester has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon and Unilever. The Motley Fool UK has recommended DS Smith and Fresnillo. 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.