I asked ChatGPT to find 3 shares for a brand new SIPP, and it picked…

One other yr is drawing to an in depth and we’re all a bit nearer to retirement, however have we acquired our ISA and SIPP accounts sorted out? We Britons typically go away issues till the final minute, and surveys usually discover round a 3rd of us don’t have any retirement plans past the State Pension.

ChatGPT was fast to unearth a couple of share choices for a SIPP, however all this actually did was present that fairly a couple of analysts are speaking about them. Nonetheless, three of the preferred proper now are amongst my favorite dividend shares. That’s encouraging however didn’t precisely train me something.

British American Tobacco

As we see from the chart above, British American Tobacco (LSE: BATS) shares have climbed strongly previously couple of years — similar to the opposite two. However we’re nonetheless a beautiful potential dividend yield of 5.7%. And extra importantly in my books, it’s raised its annual dividend for greater than 25 years in a row, matching the coveted S&P 500 Dividend Knight standing.

British American is value contemplating for a SIPP effectively, for my part, because it pays quarterly dividends. That shouldn’t matter after we’re increase our retirement pots and reinvesting the money. However as soon as we’re drawing revenue, common funds could make issues a bit smoother.

The primary danger may appear apparent — the entire tobacco factor. Will it lastly exit of trend, and what would possibly regulation do to it? I feel it may very well be round for a great whereas but.

Nationwide Grid

Let’s begin with maybe the largest danger going through Nationwide Grid (LSE: NG.) shareholders. The bedrock of many a retirement portfolio launched a large £7bn fairness subject in Might 2024, aimed toward contributing to £60bn in new power infrastructure spending.

It rattled the share worth and reset the per-share dividend downwards from 2025. And it blew the cobwebs off buyers who’d assumed the corporate would by no means change and would simply carry on paying increasingly annually. Lesson: no dividend is ever assured, and there are not any exceptions.

The reminder that this could be a capital-intensive enterprise is welcome. However I nonetheless price Nationwide Grid as a long-term money cow to consider. We’re a extra modest 4.1% dividend yield now. But it surely must be strongly lined by earnings. And forecasts present progressive rises over the following few years.

Aviva

I purchased Aviva (LSE: AV.) for its long-term dividend potential, with an eye fixed on its turnaround technique. And it’s come by means of on each counts. With the share worth greater than doubling previously 5 years, the forecast dividend yield is now down to five.5%. However that’s nonetheless enticing, beating even at the moment’s excessive inflation.

At interim outcomes time, Aviva maintained “steerage for mid-single digit progress within the money price of the dividend past FY2025.” And that matches forecasts for well-covered progress within the subsequent few years.

My primary concern is the Aviva share worth is perhaps getting a bit toppy now, with a ahead price-to-earnings (P/E) ratio of 14. I’m undecided that leaves sufficient security room for the cyclical danger that at all times accompanies this sector. But it surely’s nonetheless a agency maintain in my very own retirement plans.