The new ISA season commenced last week meaning the £20k allowance for investors has reset.
I’ve been putting money into my Stocks and Shares ISA for a while now. However, some investors will be starting from scratch.
Here are two stocks I think investors should strongly consider adding to an ISA.
Should you invest £1,000 in Aviva right now?
When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aviva made the list?
easyJet
easyJet (LSE: EZJ) recently rejoined the FTSE 100 and it’s fairly easy to see why. Its share price has taken off and climbed 28.8% in the last six months.
I believe easyJet shares are worth considering for a few reasons. Firstly, travel demand is set to soar. Travel data firm OAG recently stated that European airlines will have 817.5m seats available between April and October. That’s the highest ever on record.
Secondly, I’ve been impressed with the firm’s bounce back from the pandemic. Last year, it recorded a profit of £445m. That’s good progress from the £187m loss it recorded the year prior. It has also continued its strong recovery this year with passenger growth for Q1 rising 14% year on year.
The airline industry can be volatile. Global conflicts have the potential to halt easyJet’s operations. There are other external factors that can impact its performance as well, such as fluctuating oil prices.
Nevertheless, trading on a price-to-earnings (P/E) ratio of 12, the stock looks like good value for money. As easyJet continues to recover from its pandemic woes, I’m optimistic that its share price can too.
Aviva
Another stock I believe investors should consider is Aviva (LSE: AV). It has risen 13.3% in the last six months. I’m confident that it has further to go.
On 7 March the business released its full-year results, showing impressive growth. For 2023, operating profit grew 9% to nearly £1.5bn, while it also delivered its £750m cost reduction target a year early.
That comes as part of a wider initiative that Aviva has taken to restructure in recent years. It has aimed to trim some fat by streamlining its operations. CEO Amanda Blanc has got rid of numerous underperforming businesses and plans to continue offloading more. To date, it seems to be working.
I’m also drawn in by its meaty 7.2% dividend yield. That’s way above the 3.9% Footsie average. Alongside bumping its payout by 8% last year to 33.4p a share, it announced a £300m share buyback scheme.
That takes the total amount of capital returns and dividends paid to shareholders over the last three years to more than £9bn.
There are issues. While streamlining is a smart move, in my opinion, it does pose a risk. It’s now reliant on just a few core markets. Should they stumble, that could cause issues.
But even so, I think the moves the firm has taken will help it prosper in the years to come. Like easyJet, its shares look like good value trading on a P/E ratio of 12.3.
Aviva has grown its sales, operating profit, and dividend in the last three years. That’s evidence of the positive momentum the business has been gaining in recent times.
