There are only a few weeks left before this year’s Stocks and Shares ISA deadline is up. So I’m building a list of top dividend stocks to buy before my £20,000 allowance for this tax year expires.
I can’t roll over any of my unused annual allocation into 2024/2025. So I need to place any extra cash I have into my tax-efficient account by 5 April.
I don’t need to actually buy any UK shares, funds, or any other eligible asset before April’s cutoff. But I do need to have the money sitting ready to invest in my account by then.
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When it’s gone, it’s gone!
That said, I don’t see any reason to delay spending my ISA cash today. The FTSE 100 and FTSE 250 are packed with brilliant bargains right now. I’m aiming to snap them up before the market wises up and they rise in price.
Here are just two ultra-cheap dividend stocks I’m hoping to buy within the next few weeks.
Green machine
Dividend yield: 7.4%; P/E ratio: 7.7 times
Renewable energy stock Greencoat UK Wind (LSE:UKW) has slumped recently as hopes of imminent interest rate cuts have declined. Higher rates are bad for such companies as they depress net asset values (NAVs).
I consider this to be a dip-buying opportunity. As someone who invests for the long term, I’m attracted by the possibility that Greencoat’s share price will rebound as demand for green energy picks up speed.
In the meantime, I can take consolation in the FTSE 250 firm’s enormous dividend yield. I also believe the business may be a wise investment in this era of above-average inflation: this is because of its aim “to provide investors with an annual dividend that increases in line with RPI inflation.”
Greencoat’s shares look dirt cheap from a price-to-earnings (P/E) basis. But this is not all. At 134p per share, the company also trades at a healthy 17% discount to its NAV per share value.
One of my favourite stocks
Dividend yield: 7.7%; P/E ratio: 10.2 times
Financial services giant Aviva (LSE:AV.) has provided me with a solid return since I opened a position last year. I’m planning to add more to my ISA in the near future, hopefully before April’s deadline.
Tough economic conditions in its core UK marketplace may dampen profits growth in 2024. But like Greencoat, I think this FTSE 100 share has exceptional long-term growth potential. I believe a rapidly ageing population should turbocharge demand for its wealth, retirement and insurance products over the next 10-20 years.
I also like Aviva because of its stunning cash generation. Not only does this mean I can expect big dividend payments to continue flowing in. The company can also invest heavily in its operations and make further acquisitions to boost earnings growth.
I’m also encouraged by Aviva’s successful efforts to digitalise its operations. It’s now ahead of its major rivals on this front, which should further help it achieve market-beating growth in the years ahead.
