The Stocks and Shares ISA deadline is almost upon us. In less than a week, the new ISA year will begin, with a new allowance of £20,000 to take advantage of. Ahead of the deadline, with £500 of spare funds that I want to invest, here are three no-brainer (in my opinion!) ISA stocks I want to buy.
A generous dividend payer
The first ISA stock I’d look to include is homebuilder Taylor Wimpey (LSE:TW). The share price has fallen by 26% over the past year. It has a dividend yield of 6.46%.
Why is this a no-brainer from my point of view when the share price has fallen? I prefer to buy stocks that are off the highs, rather than the opposite way around. The lower share price boosts the dividend yield, which looks very attractive now.
In terms of fundamentals, one of the reasons for the fall has been concern around cladding. The clawback of funds and the finger pointing about who is responsible could end up costing the business a lot of money.
Yet, on the other hand, I think the outlook is positive, following the release of the 2021 results. With solid forward orders as well, I think 2022 can be a success.
An ISA stock with growth ambitions
The second company I like is Hargreaves Lansdown (LSE:HL). The share price has also fallen over the last year, down 32%.
The fall has coincided with a 20% drop in profit before tax for the six months ended December 2021 versus the previous year. The report noted that “calmer markets…led to more normalised share trading levels”.
However, I think the fall in this ISA stock shouldn’t have much further to go, with an outlook expanding into wealth management. Beyond the traditional platform offering to buy and sell stocks and funds, a broader wealth offering should be more profitable. For example, higher fees can be charged for advisory services instead of just having clients pick investments themselves.
The risk here is that it’s a step into the unknown, with tough competition already operating in this space.
A banking stalwart
Finally, I think that a good ISA stock is HSBC (LSE:HSBA). In contrast to the other two, the share price has risen by 22% over the last year, but it’s still a way off the highs seen in late 2019 before the pandemic.
I like the stock right now because it should be able to benefit from rising interest rates around the world. Higher interest rates allow the bank to make a larger margin in the rates charged from offering loans and on paid on deposits.
HSBC is also one of the few truly global banks, servicing a broad range of clients from retail to institutional around the world. This should help the bank to have a smoother financial performance than other peers that are reliant on one particular segment or region.
However, I do need to watch out in case we see spiraling costs of living drag the UK into a downturn. This could slow down spending and increase the risk of loan defaults.