ISA investors! I’d ‘swipe right’ on these 2 FTSE 100 dividend stocks

Royston Wild talks about two blue chip beauties that could make you a fortune in the years ahead.

| More on:

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.

A lot of investors remain reluctant to invest in UK-focused stocks today. And they can’t be blamed. Hopes that December’s general election would dispel Brexit-related turbulence didn’t take long to disappear into thin air. It’s clear that the intense political and economic uncertainty that’s dogged domestic growth in recent years is set to persist through 2020 and possibly longer.

National Grid (LSE: NG) however is a brilliant British stock that should remain immune to any adverse Brexit consequences. The country’s electricity network will remain up and running whatever disaster befalls the domestic economy. And this is a field in which the FTSE 100 firm experiences no competitive pressures.

The power play isn’t completely without risk, of course. Regulators keep utilities specialists on a tight leash. And this was illustrated last month when Ofgem announced it was investigating National Grid and Scottish Power over the laying of the Western Link subsea cable.

Should you invest £1,000 in National Grid 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 National Grid made the list?

See the 6 stocks

The need to provide maximum value to customers is becoming increasingly problematic, as the likes of Centrica have found with the recent imposition of price caps. And while not on the retail end of things, it’s something that National Grid has to be mindful of. Breaking up the company’s monopoly on maintaining the grid is something that many have been calling on for years now.

BIG yields

The increasingly large dividends that the Footsie firm has been shelling out to its shareholders hasn’t won it too many plaudits from politicians or consumer groups, either. This is a theme which is likely to continue, too, certainly if City forecasts are to be believed.

Brokers expect a 48.7p per share dividend to be paid for the full fiscal year to March 2020. This compares with the 46.52p reward paid last time out and carries a monster 4.7%. Compare that with the FTSE 100 broader average which sits at 4%.

And estimators expect another dividend hike in financial 202 1 to 50.1p per share dividend. This nudges the yield to 4.9%.

I still think that National Grid is a top buy, though. Regulatory concerns will always remain a worry but I reckon a forward price-to-earnings growth (PEG) of 0.5 more than bakes in these risks. Combined with those monster yields I think it’s a top buy today.

A hot dividend grower

Smurfit Kappa (LSE: SKG) doesn’t offer the sort of yields that National Grid does. In fact, its reading of 3.2% for 2020 falls some way short of its blue-chip compatriot’s. But I’d buy the packaging manufacturer on its bright trading outlook, and the likelihood that dividends will keep raising at a breakneck pace.

Last year Smurfit Kappa hiked the final payout in 2019 by double-digit percentages on the back of another highly successful year. Strong growth across Europe and the Americas helped EBITDA grow 7% year on year, with demand in its home continent being particularly robust and growing ahead of the broader market.

I expect sales of the Footsie firm’s product to keep tearing higher, too. Its focus on sustainable packaging taps into an increasingly popular customer requirement, while its dedication to acquisitions puts it near the front of the pack in terms of product innovation, too.

And right now it trades on a rock-bottom forward PEG ratio of 0.5, too. It is, like National Grid, a top dividend buy today.

Should you invest £1,000 in National Grid 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 National Grid made the list?

See the 6 stocks

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 has no position in any of the shares mentioned. 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

With an 8% yield and a P/E below 12, Taylor Wimpey looks in deep value territory

Harvey Jones wants to make a bit of noise about Taylor Wimpey shares. The FTSE 100 stock may be volatile…

Read more »

A young Asian woman holding up her index finger
Investing Articles

Up 8% today, is this one of the FTSE 100 best growth shares to buy?

Looking for the best FTSE 100 growth shares for a winning portfolio? This soaring blue chip is worth serious consideration,…

Read more »

Investing Articles

With yields over 7%, here are two FTSE 100 dividend shares to consider in 2025

As the FTSE 100 trades near all-time highs in 2025, some of its top dividend shares still offer highly attractive…

Read more »

Investing Articles

Here’s why Coca-Cola HBC stock jumped over 9% in the FTSE 100 today

This stock was flying to a record high in the FTSE 100 today, boosted by a strong set of earnings.…

Read more »

Investing Articles

1 FTSE 100 stock an investor consider for a Stocks and Shares ISA if Cash ISAs get canned

The talk in the papers is of the Cash ISA getting axed, but the Stocks and Shares ISA seems secure.…

Read more »

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

A 5.5% dividend forecast? £2k invested in Lloyds shares could earn an investor this much by 2027

Jon Smith talks through the dividend forecast for Lloyds stock in the coming years and weighs up whether it could…

Read more »

Investing Articles

How much in savings would investors need to target a £3,000 monthly passive income?

Our writer outlines a simple recipe to earn passive income from shares. The ingredients include diligent saving, ample time and…

Read more »

Investing Articles

The average Stocks and Shares ISA turned £10k into £25k in a decade. I aim to beat that

Harvey Jones is impressed by the long-term total return on the average Stocks and Shares ISA. Yet he still reckons…

Read more »