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Stocks and Shares ISA investing: 2 stocks to buy

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I try to make the most of my Stocks and Shares ISA every year. Investors can put away a maximum of £20,000 in one of these tax-efficient wrappers every tax year.

No tax is due on any dividend income or capital gains earned on assets held within one of these rappers. That’s why I try to make the most of my allowance every year. 

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And right now, there are two stocks I’d buy with my allowance this year, based on their income and growth prospects. 

Stocks and Shares ISA buys 

The first company I’d buy is Just Eat (LSE: JET). There are a couple of reasons why I like this business.

First of all, I think it’s one of the most attractive tech stocks listed on the London market. Secondly, I reckon this is one of the most efficient and attractive operations in the booming meal delivery sector. 

Just Eat processed 200m orders in the first quarter of 2021, representing a 79% increase compared with the same period of 2020. The value of products ordered on its platforms totalled €4.5bn, increasing 89% year-on-year.

The UK was the company’s fast-growing market. Just Eat UK processed 64m orders in the first quarter, growth of 96% on the prior year. 

These numbers illustrate the size of the company’s available market. The group also has the cash to invest in its product. Adjusted EBITDA increased to €256m last year, providing cash flow for growth. 

These are the reasons why I think the company could be a perfect acquisition for my Stocks and Shares ISA considering its growth potential.

Key risks include the competitive nature of the market. Just Eat is having to compete with companies like Deliveroo and Uber Eats. This competition is likely to depress profit margins. 

International expansion

The other company I’d buy from my portfolio is the financial services group IG (LSE: IGG)

I think this enterprise offers all the qualities I am looking for in a Stocks and Shares ISA buy. At the time of writing, the stock offers a dividend yield of 5%. This payout isn’t guaranteed as it depends on company profitability. However, I think it shows the group’s income potential.

At the same time, the company is also pursuing growth initiatives. It’s expanding in its markets around the world, including the United States. However, expanding by acquiring international businesses can be a tricky strategy. Many firms have failed in this approach and run up huge losses. 

But, so far, IG hasn’t repeated these mistakes. Since 2015, its net profit has jumped from £132m to £357m as its growth initiatives have yielded profits. 

Of course, past performance is no guarantee of future potential. IG faces plenty of challenges, including regulation and competition. Nevertheless, as a Stocks and Shares ISA buy, I think this company is an incredibly attractive prospect. That’s why I would buy the stock today. 

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Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Just Eat N.V. 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.

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