This year’s ISA allowance expires in three weeks from today, and I’m hunting around for some top British stocks to buy before the 5 April deadline. The following two FTSE 100 stalwarts are rarely off my ‘buy’ list, and with good reason. Both have a great track record of delivering long-term income and growth throughout the economic cycle.
I rate Reckitt Benckiser Group (LSE: RB) as one of the top British stocks of all. This household goods company boasts a vast range of brands that people pop into their shopping trolleys without a second thought, such as Air Wick, Harpic, Dettol and Nurofen.
This gives investors defensive solidity, as most people can stretch to these everyday purchases in a recession. It also offers exposure to the emerging markets growth story, as middle-class consumers around the world buy them in greater quantity too. The Reckitt Benckiser share price never looks cheap, and that is the case today. Right now, it trades at 20.3 times forward earnings. That looks like a buying opportunity to me, especially since it is down 18% in the last six months.
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I’d buy these top British stocks
While the stock initially benefited from the pandemic, as people bought more cleaning goods, its health division lost sales as fewer people caught coughs and colds during lockdown. I would expect other top British stocks to benefit more when lockdown is over. Shops selling essentials have remained open throughout, helping Reckitt Benckiser maintain sales. People will be looking to splurge on something more exciting than deodorant when they are let loose.
But I would buy Reckitt Benckiser for the long term. To retirement and beyond, in my case. The forecast yield of 2.8% is nicely covered 1.8 times and was paid throughout the pandemic. Management’s attitude is progressive and dividend payments should increase over time.
I would supplement this with National Grid (LSE: NG), another top British stock that would give me more generous income today. This is as solid as a utility can get, as it manages the wires and pipes that businesses and homes rely on for power, both in the UK and north-east US.
FTSE 100 income hero
National Grid has been a terrific source of dividends for years, with the payout funded from strictly regulated earnings. The stock is now forecast to yield 6%, making it one of the top British income stocks of all. I find that hard to resist at a time when the average instant access account pays just 0.18%.
I don’t expect massive share price growth and the National Grid share price is trading at similar levels to five years ago. Management also has to invest a hefty £10bn in its transmission networks over five years and pursue net zero carbon targets. Regulator Ofgem also proposed cutting its maximum return on equity by 40% from today’s level. I still think today’s entry price looks attractive, with the stock trading at 14.2 times earnings
National Grid remains one of the top British stocks for income seekers, and I would add it to my ISA portfolio today.
