I find that the Stocks and Shares ISA deadline always comes around super quickly. At the start of the year, I think that it’s ages away. Then all of a sudden we’re in the middle of March, getting ready for Q2 and the ISA deadline.
I’ve got plenty of my allocation left for this current ISA year, so I won’t be able to fill it all before the deadline. But with the spare cash I do have, I’m looking to add some shares in ahead of the looming 4 April deadline.
A FTSE 100 stalwart
The first stock I’m looking at adding to my Stocks and Shares ISA is Anglo American (LSE:AAL). The global mining company is a true giant, with a market capitalization of over £40bn.
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I’ve written about the company a few times over the past six months, as the company has continued to deliver strong share price growth. It’s up 514% over a five-year period, and is one of the stocks I put in my example portfolio to show how I could turn £1,000 into £10,000.
The strong growth has been helped by rising commodity prices. The copper price is up over 60% over five years. Aside from this is the high profit margin from mining. The 2020 results shows an impressive EBITDA margin of 43%.
It has also gained over the past couple of years thanks to the larger shift towards appealing to ESG investors. Anglo American’s commitment to a 30% reduction in greenhouse gas emissions by 2030 is positive. The “Social Way” project of a fairer way to do business is also encouraging.
I my opinion, the potential risk of adding Anglo American to my Stocks and Shares ISA comes from reputational issues. Late last year a lawsuit was filed in Zambia relating to alleged mass lead poisoning from the mines. Another issue is the constant health and safety risk, such as casualties from working in the mines.
An income stock for my Stocks and Shares ISA
The second company I’d look to add for my Stocks and Shares ISA is SSE (LSE:SSE). The well-known energy company services a lot of the UK and has done for several decades.
I think SSE shares are a good addition to my ISA for income generation. I’m not ruling out capital growth as well, but the stock has provided a dividend yield of above 5% for the past 10 years.
The company operates in a competitive environment, but at the same time is one of only a handful of energy businesses dominating the market. As such, I don’t see SSE losing a lot of ground to new entrants due to the economies of scale. On the other hand, I don’t see the business growing exponentially in coming years either.
SSE knows a lot of focus is on the dividend, and in the most recent trading update addressed this in just the second paragraph! This shows to me that it’s a priority for a lot of shareholders to know about the proposed dividend per share.
One concern I have with energy companies like SSE is the impact of regulations with the likes of Ofgem. Last September, SSE was fined £2m for failing to publish needed documentation. Further fines and reputational damage could hurt the share price.
