Looking to turbocharge returns from your Stocks and Shares ISA in 2020? Well, I think Polymetal International is one share that is a great buy for what promises to be a tumultuous year ahead, with presidential impeachment enquiries proceeding and November elections in the US, Brexit uncertainty persisting, political and economic crises engulfing Germany, trade wars escalating… the list goes on.
Against this backcloth, Polymetal’s share price has tracked gold values higher and the stock’s risen 46% so far in 2019. It’d take a braver man than me to suggest that it won’t keep marching next year. Oh, and one final thing: at current prices it boasts a chunky 4.8% dividend yield for 2020.
Strong and stable
Diageo has also risen this year, albeit by a more modest 10%. The same qualities that have driven the drinks giant skywards have also benefitted Unilever, its own share price rising by a fractionally better 11%.
Just as Polymetal can be considered a play on the cooling global economy, so can these major fast-moving consumer goods (or FMCG) suppliers. So beloved are their wide ranges of premium products that shoppers can be relied upon to stretch their budgets that little further to keep buying them. And their broad geographic footprints provide an added layer of security.
Unilever, for instance, has kept defying reduced consumer spending in some key territories and intense competition to post a 3.4% rise in underlying sales between January and September. Meanwhile, Diageo has said that its start to the current fiscal year (to June 2020) has been so strong that it expects net sales growth of between 4% and 6% in the period.
Diageo’s 2.3% forward dividend yield and Unilever’s reading of 3.3% for 2020 clearly aren’t the biggest, but the brilliant earnings visibility that allows dividends to grow year after year still makes these firms top income buys in my book. I bought both these shares back in summer 2018, and am tempted to increase my holdings given the strength of the past 12 months.
Firing on all cylinders
I consider BAE Systems to be another top income stock to buy ahead of the new year. Like the precious metals miners and global FMCG giants, firms within the defence sector are also lifeboats in stormy waters: conflict is one of the constants of human history in good economic times and bad, after all, making them reliable profits generators whatever the weather.
If anything, arms manufacturers are one of the most in-vogue stocks right now as rising political nationalism and increasingly aggressive foreign policy the world over boosts defence budgets. And BAE Systems underlined the favourable trading backdrop last month with news that earnings would likely rise by mid-single-digit percentages in 2019, a performance no doubt underpinned by its role as a critical provider to the US and UK armed forces.
No wonder, then, that the FTSE 100 firm has seen its share price boom 21% in the calendar year to date. With earnings expected to keep swelling over the next couple of years, so are dividends, and this leaves the defence star with a huge 4.3% yield for 2020.