With a £20,000 ISA allowance to fill before 5 April 2020, it’s time for many investors to shop for shares, including me.
One well-known share research website classifies some shares as super stocks. To qualify, a share must score well against value, quality and momentum indicators. I think picking shares like that can be a decent strategy. Here are three of my favourites right now.
Infrastructure investment
3i Infrastructure (LSE: 3IN) is a closed-ended investment company that invests in infrastructure businesses and assets in the UK and Europe. The company aims to deliver shareholders a sustainable total return of 8-10% per annum, with some of that coming from its progressive dividend policy.
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A glance at the share price chart reveals the stock has been moving steadily up for some time, which I find encouraging. At the recent 287p, the share price is just over 30% higher than it was a year ago. But even now, the valuation isn’t excessive with the forward-looking price-to-earnings multiple for the trading year to March 2020 running just below 13. There’s also a dividend yield sitting a little over 3%.
The company manages its assets in sectors such as transportation, power, utilities, energy and healthcare, buying and selling businesses and investments at optimum times. I think such nipping and tucking looks set to keep the total returns rolling in for shareholders in the coming years.
Credit lending
Morses Club (LSE: MCL) is a UK-focused, home-collected credit lender operating via a network of self-employed agents who collect repayments on the doorstep on a weekly follow-up basis. The firm provides non-standard credit, which is usually unsecured, for borrowers who have difficulty obtaining credit from mainstream lending institutions.
At 175p, the stock has risen a little over 10% since the beginning of the year, which is a handy return when combined with the forward-looking dividend yield of almost 5% for the trading year to February 2020. City analysts following the firm expect double-digit percentage advances in earnings and in the dividend for the current trading year. And the directors expressed a confident outlook with an update at the end of February.
Meanwhile, the valuation looks undemanding with the forward-looking earnings multiple running just below 12 for the current trading year. I think the shares are attractive.
Education services and products
RM (LSE: RM) supplies products and services for the education market in the UK and abroad. At the end of March, the company released a steady-as-she-goes trading update and City analysts following the firm expect single-digit increases in earnings and the dividend going forward.
At 231p, the stock is around 14% higher than it was at the start of the year. The forward-looking dividend yield is also running just below 4% for the trading year to November 2020. But the dividend is a real success story. Over five years, the payment has increased by just over 100% and I think the firm is capable of delivering a similar return from the dividend in the years to come.
Meanwhile, the valuation looks undemanding with the forward-looking earnings multiple running just below nine for the trading year to November 2020. That looks attractive to me, given the sector has defensive qualities.
