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My top 3 Stocks & Shares ISA buys going into 2020

Do you keep a ‘buy’ list of stocks? I do, throughout the year, and whenever my research and writing takes me to a tempting company, I add it to the list. If something attracts me several times, I start to consider it seriously. So which are my top candidates for my Stocks & Shares ISA going into 2020?

Dividend hero

A few investment trusts keep crossing my horizon, specifically those with long track records of raising their dividends. One of them is Caledonia Investments (LSE: CLDN), which has raised its annual dividend every year for 52 years. A small handful of others have managed 50 years or more, but Caledonia’s increases have beaten inflation for more than 20 years running too, and the preservation of real-terms rises is really what I like.

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The yield is not one of the highest at around 2%, but the past five years have also produce a 34% share price gain, compared to 17% for the FTSE 100 and 21% for the FTSE All-Share. For a trust aiming to “consistently achieve a long-term shareholder return in excess of the FTSE All-Share Total Return, while maintaining a progressive annual dividend,” I’d call that a success.

And with the shares trading on a 16% discount to net asset value right now, Caledonia Investments is likely to be my next share purchase.

Oil income

I recently sold my holding in Premier Oil, having belatedly decided I’d made a mistake when I first bought it. I still like the idea of a smaller oil company, so I’m looking at Gulf Keystone Petroleum (LSE: GKP) as a replacement in my ISA portfolio.

Until the agreement with the Kurdistan Regional Government was hammered out, bringing about regular payments, I would have suggested you’d be mad to buy Gulf Keystone shares. But since then the company hasn’t looked back — though there’s a bit of a caution right now as payments due in November and December have been delayed until January.

Gulf has come from close to the brink to returning surplus capital to shareholders, with a 7.5% dividend on the cards for the current year. And a further share buyback programme was announced in early December, extending the previous one.

Gulf Keystone is a strong buy candidate — but I might wait until the January payment is received.

Cheap engineer?

I’ve had my eye on Goodwin (LSE: GDWN), an oil, gas, and mining equipment engineer, for some time, and was surprised very recently to read of a 20% share price fall in response to first-half underperformance.

We’re still waiting for renewed forecasts for the full year, but the cause of the company’s 2019 troubles has been the seemingly perpetual blight that is Brexit uncertainty. But that’s relatively short term, and the key strength I see in Goodwin is that its management team has a very long-term focus — and the firm has built value for shareholders for decades now.

It has a global clientele, despite being a small company with a market capitalisation of only around £220m, and it seems to have no trouble building a long-term order book.

The shares are on a trailing P/E of 19.5, and offer progressive and well-covered dividends. And despite the share price shock, we’re still looking at a 12-month gain of 19%, which suggests robust (if slightly shaken) confidence.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Goodwin. 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.