The clock’s ticking. Investors have a little over five weeks in order to max out their ISA allowance of £20,000 for the 2018/19 tax year. Your allowance can’t be rolled over beyond April 5 and so the benefits of the wrapper disappear into the ether, possibly costing you a small fortune in valuable tax benefits.
For individuals holding stocks and shares ISAs, this requires some serious attention, and fast. While you can leave it to the very last minute to load up, that can be stressful. Also, the sooner you invest the better chance you have of benefitting from the current bull run being enjoyed across global equity markets with the potential for an increase in your purchases’ value.
Fashion arm is flying Let me start you off: Associated British Foods (LSE: LON:ABF) is one share that I believe is worth loading into your ISA before the upcoming cut-off date.
The FTSE 100 business is one I’ve long been excited about, primarily because of the stunning revenues opportunities being created by its aggressive Primark expansion drive. And I’m delighted to say that latest financials this month have underlined the terrific potential in some of its foreign marketplaces.
ABF said that sales at its cut-price clothing stores would be roughly 4% higher in the six months to March 2, reflecting the fruits of its new stores opened in Brooklyn, Berlin, Seville, Almeria and Toulouse. Like-for-like sales fell 2% in the period, sure, but strong trading in many of its overseas territories underlined the long-term sales possibilities of its clothing arm.
The company noted “particularly strong” revenues growth in Spain, France, Italy and Belgium in the first half, while it also witnessed “strong” trading in its newer US growth region. And Primark’s growing wingspan has much further to go — ABF plans to open 900,000 square feet of new selling space in the remainder of the fiscal year with a new store planned for the Slovenian capital of Ljubljana.
This upcoming store opening possibly signals big things for Primark in Central and Eastern Europe, the retailer also having recently signed leases for its first stores in the Czech Republic and Poland. This is a sage strategy given the brilliant growth rates in this part of the world.
Dividend growth star Now let’s talk about dividends. Associated British Foods has proved a proud payout raiser in recent times and last year it hiked the full-year reward 10% to 45p per share.
City brokers expect this run of annual increases to continue, although with earnings growth expected to only fractionally rise in fiscal 2019, a more marginal dividend rise to 47p is anticipated. It’s still a good idea to remain buckled in though as, with profits expected to pound 11% higher next year, a more meaty dividend increase, to 51.4p, is forecast.
There are bigger yields out there than ABF’s readings of 2.1% and 2.3% for this year and next respectively. However, as Primark’s global takeover marches on and steps to improve margins here click through the gears, I believe the Footsie firm’s a great share to buy for those seeking strong and sustained dividend expansion in the years ahead.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods. 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.
Motley Fool UK 2019