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We’re in the final days before the 5 April ISA deadline, and investors are adding some of the UK’s most popular companies to their Stocks and Shares ISAs. But there’s one important point to note. We don’t need to rush any stock purchase decisions before the end of the week.
No, the ISA deadline is simply the last day we can contribute cash up to the 2025-26 annual limit of £20,000. Then once it’s in our accounts, we can take our time to decide what we want to buy with it. There’s no deadline on making our actual investment decisions
But we might be able to get some guidance by seeing what people have been buying in March. And the latest update from interactive investor shows a few of my favourite stocks among the 10 most popular. Two of them are on my shortlist, and their share prices have had very different five-year journeys.
Bank on a rebound
NatWest Group (LSE: NWG) is one, up 150% over the past five years. But at the time of writing, NatWest shares are down 23% since their 52-week high in early February. So while the FTSE 100 itself might not have crashed — that means a fall of 20% or more — the NatWest share price has.
It’s Iran, oil, inflation, and all of the rest of the fallouts threatened by the Middle East conflict. Things like that always hit the financial sector, because it underlies just about everything. But to me, the NatWest valuation still looked cheap even after that storming five-year gain, let alone after its recent fall.
NatWest is on a forward price-to-earnings (P/E) ratio of only 7.7 now — around half the Footsie long-term average. And the share price fall has pushed the forecast dividend yield up to 6%.
Now, the dividend isn’t guaranteed. And I can see a volatile time ahead for this one and other financial stocks. But is it one to consider buying on the dips, and holding in a Stocks and Shares ISA for the long term? I think so.
Build for the long term
It would be nice to be able to say Taylor Wimpey (LSE: TW.) is coming down from a strong five-year run too. But the truth is we’ve had year after year of events conspiring against the housebuilding industry. And just when inflation was seriously starting to soften and further interest rate cuts were on the cards… well, fellow builder Bellway perhaps said it best.
With its 24 March results, we heard: “The ongoing conflict in the Middle East heightens the risk of both inflationary cost pressures and an impact to customer demand, and we have already seen volatility return to the mortgage market.”
So, yes, there are some short-term threats, once again, to companies like Taylor Wimpey. But the long-term UK need for new housing isn’t going away… even if it has been stretching even long-term investors’ patience in the past decade and more.
And the — admittedly not guaranteed — forecast dividend yield is up at 8.8% now. Keep taking the cash while waiting for better times? Taylor Wimpey has got to be worth considering too.
