Looking for top growth and dividend shares to buy for a Stocks and Shares ISA? Here are two from the FTSE 100 and FTSE 250 I believe merit serious attention.
Berkeley
Investing in housebuilders like Berkeley (LSE:BKG) carries higher-than-usual risk right now. Build cost pressures remain significant, while on the demand side, a tough outlook for the UK economy threatens future sales.
On the bright side however, interest rates still look on course to fall steadily in the months ahead. And if homebuyer demand following recent rate cuts is anything to go by, builders could experience a strong rebound in 2025.
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Things are looking particularly exciting in the London market right now. This is good news for Berkeley, which specialises in construction in the capital and surrounding areas.
On Tuesday (28 January), London-focused estate agent Foxtons said it was handling the highest number of homes under offer since the Brexit referendum in 2016. It added that volumes were “substantially” higher than those seen a year ago and reflected “strong under-offer activity in the fourth quarter.“
This follows Berkeley’s statement in early December that sales had experienced “a slight uptick in recent weeks“.
Once again, it’s too early to say that the housebuilders are out of trouble just yet. But a more favourable interest rate environment, allied with government plans to build 1.5m new homes in the five years to 2029, means industry earnings could improve significantly.
Berkeley’s plans to capitalise on London’s white-hot rentals market gives it added scope to grow profits, too. In June, the company announced it intends to put up 4,000 build-to-rent properties over the next decade.
Today Berkeley shares trade on a forward price-to-earnings (P/E) ratio of 10.7 times. This is lower than the corresponding readings of fellow FTSE 100 housebuilders Taylor Wimpey, Barratt Redrow and Persimmon.
All things considered, I think Berkeley’s a great recovery stock to consider.
AJ Bell
Retail investment platforms are other UK shares with considerable long-term growth potential. With the UK’s elderly population rapidly growing, and peoples’ engagement in financial planing also rising, sector revenues could enjoy strong and sustained expansion.
FTSE 250-listed AJ Bell (LSE:AJB) is one such company I feel is worthy o close attention. A strong set of financials today (29 January) has once again underlined the firm’s considerable growth potential.
As of December, the financial services giant had 561,000 customers on its books. This represented a 4% quarter-on-quarter increase, and a mammoth 16% rise on an annual basis.
As a consequence, total assets under administration (AUA) leapt 17% year on year to £89.5bn.
While its market has room for substantial growth, fierce competition means AJ Bell is by no means guaranteed to succeed. But ongoing platform investment, growing brand awareness and attractive pricing puts it in a strong position.
Its forward P/E ratio of 19.5 times looks toppy on paper. Still, I believe AJ Bell’s strong momentum in a growing market means its shares are worthy of a premium rating and further research.
