2 dirt-cheap dividend shares to consider this ISA season!
Investing in dividend shares can be a great way to source a passive income. For ISA users, though, time is running out — any of the £20,000 annual allowance not used in the next few weeks is lost forever.
Investors don’t need to actually buy shares to beat that deadline. Just depositing cash before 6 April is enough to secure this tax year’s allocation. But is there any reason to wait before buying dividend shares? Probably not, in my view, as the London stock market’s packed with high-yield shares and brilliant dividend growers right now.
What’s more, a lot of these income stocks currently trade at rock-bottom prices. Want to see two of my favourites?
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Growth and yield
I don’t have any spare cash to invest right now. But when I do, I’ll consider adding TBC Bank Group (LSE:TBCG) shares to my own portfolio.
Dividends have soared in the post-pandemic period, and in 2025 the bank lifted the total dividend 10% year on year. City analysts expect them to keep growing over the medium term, leaving a brilliant 6.2% dividend yield for 2026.
Dividends are never guaranteed, but I’m confident the Georgian bank can keep delivering enormous and rising cash rewards. It has gigantic capital reserves — its CET1 ratio clocked in at 18.9% as of December. What’s more, this year’s predicted dividend is covered 2.7 times by anticipated earnings.
This provides a margin of error if, say, economic conditions worsen and customer loans decline. This may affect TBC’s share price, but I’d still expect dividends to keep growing strongly. And over the long term, I expect earnings to surge as Georgia’s economy rapidly expands, driving the domestic financial services industry. Pre-tax profit jumped 21.7% last year.
At £43.85, TBC shares trade on a forward price-to-earnings (P/E) ratio of just 5.9 times.
8%+ dividend yield
Alternative Income REIT (LSE:AIRE) is another high-yield hero that I think deserves attention from value investors. Its dividend yield for 2026 sits at 8.3 times, and its dividend yield at 8.2%.
Like other property stocks, this real estate investment trust (REIT) has sunk in recent weeks. It’s fallen as soaring oil prices have raised inflationary expectations, and reduced hopes of interest rate cuts. Higher central bank borrowing rates can put considerable strain on asset values.
A prolonged Middle East conflict could cause further share price weakness. But will this impact Alternative Income’s dividends? I’m confident it won’t. Under REIT rules, at least 90% of the trust’s annual rental profits must be paid out to shareholders. That’s in exchange for juicy tax breaks.
Dividends could still suffer, though, if higher interest rates hit economic growth. However, this REIT’s diversified portfolio greatly reduces the danger of rent collection and occupancy issues that could hammer dividends — its properties include hospitals, petrol stations, care homes, and retail parks.
Tenants are also tied to long contracts, providing added earnings (and thus dividend) visibility. This is another great dividend share to consider for the long term.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.
