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These dividend stocks yield 5% and 8.7%! Should you buy them for your ISA?

At first glance there’s plenty to like about Dixons Carphone (LSE: DC) at current prices.

Okay, City analysts are predicting a 27% earnings drop for the 12 months to April 2020, but they expect the electricals retailer to roar back with a 16% bounce in fiscal 2021. And many share pickers hunting for a tasty turnaround story may be tempted by a forward price-to-earnings ratio of 9.1 times and a corresponding dividend yield of 5%.

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I’m not one to be bowled over by these numbers, however. Dixons might have surprised many when it maintained its full-year guidance last month, but news of a 10% drop in mobile sales in the first fiscal quarter in particular gives plenty of reason to be worried.

The pressure of reduced consumer spending owing to Brexit – an issue which caused UK retail sales to flatline in September, latest Office for National Statistics data showed – is just one of the problems facing the white goods giant. Arguably a bigger hazard over the longer term is the change in consumer habits which is seeing mobile phone users happy to wait longer before upgrading their handsets.

Dixons share price has popped to its most expensive in almost six months around 138p recently. This leaves it in danger of a correction, though, and possibly by mid-December when interim trading details are due. I’m avoiding it like the plague.

Better with Bovis

I’d be much happier to stash the cash in Bovis Homes Group (LSE: BVS) given the robustness of the UK homes market.

Brexit may be creating the biggest challenge for the domestic economy for decades, but thanks to strong employment and perky wage growth this isn’t stopping demand for new-build properties from continuing to soar. A steady stream of positive updates from the sector proves testament to this, Bovis itself noting in early September that revenues and pre-tax profit were up 9% and 20% respectively in the six months to June.

And a recent study from UK Finance suggests that trading statements from the FTSE 250 firm and its peers should keep impressing. This showed that there were 42,376 mortgage approvals signed off by Britain’s major lenders for the purpose of home purchase in September, up 13.5% year on year.

Yields near to 9%

Now the Bovis share price has detonated in recent weeks amid hopes of a breakthrough in the Brexit blockage. Speculation that Britain can avoid a no-deal withdrawal and leave with some sort of accord in the next few months, leaves the builder dealing at its highest share price since June 2018 at above £12.

Despite this, however, Bovis still offers top value for money. As well as still boasting a forward P/E ratio of 10.9 times (and below the accepted bargain barometer of 10 times) investors can enjoy a dividend yield of 8.7%, too. Compare this to the 3.3% average that Britain’s mid-caps currently offer up.

City analysts expect shareholder payouts to keep growing through the next couple of years, and thanks to the scale of the UK’s homes crunch it’s likely that the Kent-based company can keep delivering chubby profits and dividend increases well into the next decade.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.