Is Brewin Dolphin Holdings (LON:BRW) a buy for your ISA?

The ISA deadline is almost here, so now's the time to make the most of your allowance for this tax year. That's why I have been using Stockopedia's screening tools to identify financially sound companies paying out attractive dividend yields that would look good in my Stocks and Shares ISA. 

One such company is wealth management services group Brewin Dolphin Holdings (LON:BRW), which pays out a rolling 4.92% of its share price in dividend payments and has generated an impressive 20.4% compound annual growth rate in net income over the past five years.

Brewin Dolphin Holdings (LON:BRW): financial health and dividend yield

Stockopedia applies algorithms to its stream of financial data to automatically calculate the Piotroski F-Score for every stock on the market. It shows that Brewin Dolphin Holdings (LON:BRW) scores 8 out of a possible 9. By investing in companies scoring 8 or 9 by these measures, Piotroski showed that, over a 20-year test period through to 1996, the return earned by a value-focused investor could be increased by an astounding 7.5% each year. 

The effects of this high F-Score can be seen in the group's improving net cash position, which has improved from £135m to £187m over the past five years. Even better, it suggests that the company is well-placed to continue to pay out attractive dividends in the years ahead.

That said, Brewin's dividend cover leaves something to be desired at 1.15 times. If the group is to continue growing its dividend - as it has done for the past seven years - then ideally it would grow earnings at an even faster rate to bring this dividend cover up to a more acceptable level of 1.5-2x.

What does this mean for potential investors?

Brewin Dolphin Holdings has an F-Score that suggests it could be a promising investment candidate worthy of further research - but it's only a first step. Higher F-Score stocks can still have weaknesses and may trade at premium prices compared to other stocks. We've identified some areas of concern with Brewin Dolphin Holdings that you can find out about here.