I’m always on the hunt for stocks to add to my ISA. I’ve made better use of it in 2024 than in years gone by. But I still have a chunk of my allowance left. So I want to go shopping.
If I had some spare cash today, these would be at the top of my list for stocks to consider buying.
Safestore
I like the look of Safestore (LSE: SAFE) shares at the moment. They already hold a place in my portfolio. But down 8.4% in 2024, I’m keen to top up.
That means the stock’s down 6.9% over the last 12 months. But I reckon now would be a shrewd time to add it to my holdings.
The shares look dirt cheap. They trade on just 6.6 times earnings. For context, the FTSE 250, which Safestore is a constituent of, trades on an average of 12 times earnings.
Alongside that, the stock has a 3.8% dividend yield. Again, it outperforms the wider index here, with the average yield on the FTSE 250 3.3%.
Its payout’s increased by more than 300% in a decade. Now that’s impressive. Dividends are never guaranteed, but I’m optimistic the business will keep rewarding shareholders handsomely in the upcoming years.
What could keep the Safestore share price in a rut? Well, high interest rates are a big problem. They increase debt servicing costs. In turn, Safestore has to push up its rental prices. In the last couple of years, its occupancy rates have wavered as a result.
But despite short-term challenges, I’m adopting a long-term outlook. And I’m bullish. Even with challenging conditions, Safestore has posted a relatively strong performance in recent times. I’m also excited by its ongoing expansion into Europe.
London Stock Exchange Group
Moving over to the FTSE 100, I’m also tracking London Stock Exchange Group (LSE: LSEG). Where Safestore has struggled, LSEG has prospered. The stock’s up 6.7% year to date.
There are plenty of reasons to like the stock. While it may not look like a conventional pick, I actually like the business for the exposure it provides to artificial intelligence (AI).
Its recent deal with Microsoft has seen the two firms enter a 10-year partnership that will boost LSEG’s AI capabilities. We all know just how much growth potential the AI sector has. So that’s rather exciting.
On top of that, I was encouraged by its recent half-year update to investors. Sales were up 5.4% year over year. Its capital markets division saw an impressive 17.4% growth.
Looking ahead, the business said: “We look forward to further progress in the second half of the year, and are reiterating all of our medium-term guidance”.
It faces some risks. One is that a weak UK economy may deter companies from going public. As it makes money from listing fees, this would harm its revenues.
But as a business with a dominant market position and strong growth potential, as well as its AI exposure, I reckon LSEG’s one for me to take a closer look at.
The post I reckon these 2 stocks could be brilliant buying opportunities for my ISA appeared first on The Motley Fool UK.
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Charlie Keough has positions in Safestore Plc. The Motley Fool UK has recommended Microsoft and Safestore Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
