Image source: Getty Images
My ISA contains a number of income shares to help me generate passive income.
If you look at the London market at the moment, there are quite a few stocks offering what I consider to be attractive dividend yields.
Here are five, each yielding at least 5%, that I would be willing to buy if I had extra money to invest in my stocks and Shares ISA.
Financial services
group of men is an investment manager that has had a good run in recent years. If we look at the last five years, for example, Man Group's share price has soared 65%.
Despite the share price growth, the yield here is 5.2%. This is above the benchmark average. FTSE 250 index of which Man is a member. With $176 billion in assets under management, I think the company could continue to perform well, although if we return to recession, that could lead fundholders to withdraw money, hurting profitability.
Another financial services company I would happily purchase for my ISA is FTSE 100 asset manager M&G.
The performance here is much higher than even Man's, 9.6%. I note that the president of the company spent his own money buying M&G shares this week. His strong brand, client base spanning millions and long experience in asset management all work in his favor as far as I'm concerned.
Less favorable is a similar risk for Man: unstable financial markets could see sales fall. Then again, perhaps the opposite will happen as buyers rush to take advantage of recent booms in markets from ai stocks to the Tokyo stock market.
Consumer products and services
No dividend is ever guaranteed, as evidenced by VodafoneThe plan to cut your pay per share in half. I already have it in my ISA, but I think its debt still represents a risk to earnings.
However, even after such a cut, the FTSE 100 telecoms giant will return 5.3%.
It has strong positions in markets across Europe, with a customer base in the hundreds of millions and exposure to the rapidly growing African mobile money market.
At 9.4%, the high performance offered by British American Tobacco (LSE: BATS) is compelling. The dividend has grown annually for decades, although only time will tell whether it survives the risk posed by falling cigarette sales. The company's strong brands and growing vaping business could be key.
Acquisition target
My fifth pick would be a company that yields 5%, but maybe not for much longer. This is because the paper manufacturer and packaging specialist D.S. Smith (LSE: SMDS) looks set to be acquired by the American giant International roleafter the US company surpassed the London-listed one Worlds out of race.
For now, the performance is juicy enough to grab my attention. The underlying business seems solid to me, which explains why competitors have been fighting to get hold of it.
The company announced this week that last year's sales were up 14% and pre-tax profits soared 75%. The dividend increased by a fifth.
If the takeover bid fails, DS Smith's share price could fall. But the rising price of international shares means they are more valuable than when they were first announced. Either way, I find the DS Smith business attractive.
