The deadline for using this year’s Stocks and Shares ISA allowance ends tomorrow at midnight, so this really is last call to buy British shares for the 2021/22 tax year. Here are 10 stocks I would consider buying for my ISA allowance, hand-picked from the FTSE 100 and covering a range of sectors.
I like to build a diversified portfolio of UK shares, so when one sector struggles, another may compensate. It’s not exactly a radical idea. The phrase ‘ever put all your eggs in one basket’ springs to mind.
I’d buy these British shares before 6 April
My stock choices here cover financial services, commodities, retail, consumer staples, healthcare, house building and utilities.
I’ve picked out British shares offering the potential for both capital growth and dividend income, starting with two insurance companies, Legal & General Group and Phoenix Group Holdings. They yield 6.80% and 7.89% respectively, which are incredible rates of income, and give me some protection against inflation. Neither has delivered much share price growth over the last five years, but today’s entry prices look undemanding. L&G, for example, trades at just 7.93 times earnings.
The UK banking sector was a happy hunting ground for British shares but that was before the financial crisis. I would still buy a stake in Lloyds Banking Group though, which is (slowly) repairing its reputation and dividend. It currently yields 4.22%, although I would expect that to rise over time, and trades at an amenable 6.7 times earnings.
Pharmaceutical giant Glaxosmithkline is a long-standing income favourite, even if its dividend has been held at 80p for years. Today’s yield would give me income of 4.83% a year. The stock is valued at 14.6 times earnings. Buying Glaxo used to be a no-brainer for investors in British shares. It has disappointed lately, but I’m backing it to replenish its drugs pipeline and fight back. Then hopefully management will reward its patient investors.
I would include a couple of commodity giants on my list of top British shares. They offer me inflation protection as prices skyrocket. My picks here are Anglo American and Rio Tinto, which currently yield 5.42% and 9.71% respectively.
The best FTSE 100 stocks offer income and growth
This sector is notoriously cyclical but as with all these British shares, I am buying for the long-term. Today’s entry prices don’t look too daunting, as Anglo American trades at just 7.4 times earnings, while Rio trades at 6.2 times.
Consumers are being squeezed but I would still buy household good giants Reckitt and Unilever, because they sell everyday items people buy in good times and bad. These top British shares yield 2.91% and 4.96 respectively. Like Glaxo, they have been on a bumpy run lately, but I think they have the resilience to make a successful comeback.
I’d throw in housebuilder Persimmon too because I find its 10.94% yield hard to resist, despite the challenges facing the housing market as incomes fall and mortgage rates rise. Finally, I’m adding oil giant BP to my list of top British shares. Many wrote it off due to net zero carbon cutting targets, but it may be the company we need to get us there, while protecting our energy security.