The Motley Fool

Forget Lloyds and Barclays! I’d rather buy this bank’s big dividends for my ISA

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.

Gold medal
Image source: Getty Images.

Looking to load your Stocks & Shares ISA with dividend heroes? I’d be very happy to buy shares in Bank of Georgia Group (LSE: BGEO) today, in anticipation of some bright newsflow that could drive the share price higher.

The bank’s preliminary results on scheduled for Thursday, 13 February. The financial giant certainly impressed the market with news in November that pre-tax profits (excluding one-off costs) soared more than 30% in quarter three. I’m expecting news of a solid end to the year next week, and a bright outlook for 2020 too.

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...

On the march

The eggheads at the ISET Policy Institute in Tbilisi estimate Georgian real GDP expanded by 5.3% in the fourth quarter. The World Bank expects the country’s economy to swell a further 4.3% for 2020. Rises of 4.5% are also predicted for 2021 and 2022.

Compare that with the mediocre economic conditions the likes of Lloyds and Barclays have to tolerate today. The Bank of England expects UK GDP to edge just 0.8% higher this year. And sub-2% rises are expected in the following two years.

Bank of Georgia is making the most of this fertile environment by developing its position in the high-growth digital banking arena too. And investors can be increasingly confident of the firm’s robustness following recent regulatory action intended to improve the quality of its loan portfolio.

Great growth, big dividends

It’s not a shock to see City analysts forecasting breakneck profits growth over the next couple of years then. A 12% bottom-line rise is predicted for 2020 and a further 13% advance has also been pencilled in for next year.

These forecasts provide plenty more to cheer. Firstly, they leave Bank of Georgia trading on a rock-bottom forward P/E ratio of 5.6 times, a shockingly-cheap reading, in my opinion, given its bright medium-to-long-term opportunities. And secondly, they lead brokers to tip some monster dividend increases too.

A full-year reward of 337 Georgian lari per share reward is expected for 2020. A chunky 404-lari payout is also anticipated for 2021. And, consequently, the FTSE 250 firm rocks up with market-mashing yields of 6% and 7.2% for this year and next respectively. Compare this with the 3% forward average which UK mid-caps currently offer up.

Stay away!

The yields over at some of the FTSE 100 banking giants get much closer to those of Bank of Georgia. In fact, Lloyds offers an even-better yield of 6.2% for 2020. Meanwhile, Barclays boasts a reading of 5.6%.

But I wouldn’t touch either of these two shares with a bargepole. Bank of Georgia isn’t without risk, sure, with rising inflation posing a particularly big problem. However, these UK-focussed banks are enduring a steady flow of rising bad loans and revenues pressure. And their troubles look set to last through 2020, and possibly well into the next decade, as Brexit plays out and competition mounts.

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!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and Lloyds Banking Group. 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.