ISA investors! 4 dividend stocks I think could help you get rich and retire early

Royston Wild reveals a cluster of big dividend payers that he thinks could make you a fortune.

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.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Tension over Brexit may have remained considerable, and this could continue to be the case through 2020 as difficult trade talks — and the possibility of a no-deal withdrawal from the European Union — hover into view. And as a consequence, the rip-roaring property price growth of recent decades has been consigned to history, as has the electric profit-making ability of the housebuilders.

Despite this uncertainty, however, for many first-time buyers, the opportunity to get on the housing ladder has been too good to pass up. The Help to Buy government incentive scheme continues to offer buyers free money to leap onto the ladder. Lending from the ‘Bank of Mum and Dad’ sits at record levels. Meanwhile, Britain’s lenders are locked in a fierce mortgage rate war and borrowers can thus enjoy rock-bottom rates, reduced fees and other bonuses.

More rates cuts on the way?

It’s clear that Britain’s economy is cooling as we move into 2020, and ordinarily one would think that this could start to weigh on homebuyer appetite. Recent industry data has shown little to no evidence of this, however. In fact, it’s possible the stagnating economy could actually boost homes demand as it could force the Bank of England to cut rates to jump-start things.

Bank officials (including governor Mark Carney and Monetary Policy Committee member Gertjan Vlieghe) have recently signalled that a rate cut could be just around the corner, and inflation data released on Wednesday has supported the case for a reduction in the Threadneedle Street benchmark.

According to the Office for National Statistics, consumer price inflation in the UK fell to 1.3% in December from 1.5% in the prior month. This is the lowest rate of inflation since November 2016 and gives the Bank more headroom to slash interest rates before long.

Indeed, foreign exchange trader Olivier Konzeoue of Saxo Bank said that a rate reduction now looks the more likely scenario when the MPC meets later this month. He thinks the chances of a cut now stands at 62% versus 50% before the inflation news came out.

Want to retire rich?

All things considered, it’s no surprise that City brokers largely expect profits among Britain’s homebuilder to keep moving higher. Sure, not at the rate at which they were before the summer 2016 Brexit referendum, but at a pace which is still conducive to supporting big dividends.

Vistry Group and Persimmon, firms that have both served up positive trading updates in mid-week trade, offer monster prospective yields above 6% and 8%. But Taylor Wimpey (whose 8.8% reading makes it the biggest yielder of all the UK-focused builders) and Cairn Homes (benefitting from the similar housing shortage in Ireland and offering a 9.2% yield), are worth a mention too.

So sizeable have yields been across the housebuilders in recent times, and so colossal Britain’s supply and demand imbalance, that I’m convinced these firms could provide titanic returns in the coming years. I certainly plan to hold both Barratt Developments and Taylor Wimpey for many, many years.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild owns shares of Taylor Wimpey and Barratt Developments. 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.

More on Investing Articles

Investing Articles

Up 105% in a year! Is this rocketing FTSE bank the perfect pick for my Stocks and Shares ISA?

Harvey Jones is drawing up a shortlist of stocks to purchase inside his Stocks and Shares ISA allowance. This FTSE…

Read more »

Investing Articles

Is it madness to buy Palantir shares after Q3 earnings?

Palantir stock's surging again after the firm's Q3 earnings report. But after a 150% gain, is it too late to…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

£6,000 in savings? Here’s how I’d aim to turn that into £1,032 a month of passive income!

A small investment in high-dividend-paying stocks with the returns used to buy more shares can generate big passive income over…

Read more »

Chalkboard representation of risk versus reward on a pair of scales
Investing Articles

As Lloyds’ share price tumbles 14%, is this an unmissable opportunity for me to buy at a bargain-basement price?

The Lloyds share price is substantially below its year high, but decent earnings prospects should drive its price and dividend…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

2 UK shares that could rise if Trump wins the Presidential election

These UK shares are among the FTSE 100's most popular stocks. And they could rise in value if Donald Trump…

Read more »

Closeup ruffled American flag representing US stocks and shares
Investing Articles

2 UK stocks that could rise if Harris wins the Presidential election

Royston Wild believes these UK stocks could receive a bump if Kalama Harris wins the Presidency, giving their share prices…

Read more »

Investing Articles

After a 96% plunge, is buying more Aston Martin shares throwing good money after bad?

Just two weeks after buying Aston Martin shares Harvey Jones found himself nursing a painful loss. Yet after recent news…

Read more »

Investing Articles

After crashing 45% in October, should I buy this FTSE 250 share for my Stocks and Shares ISA?

Roland Head explains why he’s tempted to add this risky FTSE 250 turnaround share to his Stocks and Shares ISA…

Read more »