The ISA deadline has come and gone, meaning that I’ve now got a year ahead of me to invest up to my £20,000 limit. There’s no rush, but if I missed out on putting money in earlier this week then I could get a head start on the 2022/23 year by investing now. With that in mind, here are some of my best stocks to buy now.
Buying for long-term gains
My mentality with the Stocks and Shares ISA is that it’s a long-term home for my stocks. Therefore, I want to add in companies that I think will still be here and doing well in five or 10 years time. This perspective alters to some extent the best stocks to buy now. Rather than short-term plays that could yield results in a month, I’m using the ISA for long-term trends.
For example, one stock I’d add to my ISA is Hargreaves Lansdown. The share price is down 37% over the last year. In fact, it’s currently the cheapest it has been since early 2014!
The company has experienced falling profit levels, shown by the half-year report released in February. Profit before tax dropped 20%, even with assets under management increasing.
I think that with a long-term horizon, the share price will recover. Firstly, the investment into wealth management could be very lucrative. It also has the large customer base built up from the frenzy of interest in 2020. Further, as long as assets under management increase, it gives a base to build on for profits to recover.
An undervalued banking name?
Continuing this theme of buying potentially undervalued stocks is Barclays. The share price has dropped 23% in the last year.
One of the risks associated with this stock is the UK economic outlook. With higher inflation and the cost of living crisis, Barclays could also feel the pinch due to the exposure it has to the UK market.
Personally, I don’t see the Bank of England stopping its moves to take the interest rate higher, as it needs to combat inflation. Higher rates should provide a good benefit to Barclays in 2022 and beyond.
So with a long-term view, I think Barclays is in a good position to benefit from the post-pandemic world. Lower provisions need to be set aside for bad debt and greater economic activity in years to come should support growth for the bank.
Some of the best dividend stocks to buy now
Aside from the best stocks to buy now from a value perspective, I also want to look at dividend options.
From that angle, I want to include companies that have a proven track record of growing the dividend. For example, United Utilities have grown its dividend consecutively for the past decade. BAE Systems has grown it in the past 18 years!
Both names are also well established in the FTSE 100. When I consider sectors like utilities and defence, I also believe that these will continue to have resilient demand into the future.
However, forecasting dividend payments in years to come is tricky, as companies have the flexibility to cut or change them as deemed appropriate.