Home Stock Market 3 cheap FTSE 100 dividend stocks to buy today – The Motley Fool UK

3 cheap FTSE 100 dividend stocks to buy today – The Motley Fool UK

by callingemout
A person holding onto a fan of twenty pound notes

The FTSE 100 index has recovered a fair bit from the stock market correction that happened in the last week of February. In fact, as I write it is trading north of 7,400. If all goes well, it could be a matter of days before it makes a full recovery. But for now, more than one FTSE 100 dividend stock is trading at a discount and looking quite cheap. This makes it a great time for me to buy them today to earn a passive income. 

What are cheap FTSE 100 dividend stocks?

Before I get into the stocks, let me first define what I mean by cheap here. All stocks that have a market valuation lower than that for the FTSE 100 index as a whole, despite good prospects, are cheap in my opinion. It is a simple concept, but one that works, in my observation. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the current situation in Ukraine… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Click here to claim your free copy now!

Next, dividend stocks have been defined in a specific way here. Many FTSE 100 stocks pay dividends. But dividend yields for a number of them are so low that I cannot hope to make any substantial passive income from them. At least not in the foreseeable future. So, the dividend stocks considered here are only those that have a dividend yield higher than that for the FTSE 100 as a whole, which is at 3.7% right now. 

BP rides the oil price wave  

The first FTSE 100 cheap dividend stock I like is BP, the oil giant. At around 12 times, its price-to-earnings (P/E) ratio is somewhat lower than that for the FTSE 100 index at 15 times. Moreover, going by high oil prices, its prospects look good too. It also has a dividend yield of 4.4%. Of course rising oil prices themselves can derail the economy, which is not good even for BP, but for now it does not look like an imminent challenge. I have already bought BP and would buy more of it in the near future. 

SSE is a clean energy biggie

For those of us who would like to balance out investments in polluting industries like oil with clean energy ones, the answer is SSE. The power utility is the UK’s biggest producer of renewable energy. It has an even lower P/E of around 6.5 times at present, and a bigger dividend yield than BP’s of 4.9%. Its long-term prospects look good too, going by the shift towards green energy. Though, as a shareholder in the stock for the past few months, I have made limited gains. Its share price has been quite sluggish. I believe this is a short-term phenomenon, however. I could buy more now.

Royal Mail’s promising as e-commerce stays strong

Finally, I like Royal Mail. The letters and parcels delivery services provider is the cheapest of the three stocks, with a P/E of only 4.5 times. And it has a dividend yield of 4.6%. It has faced some problems recently, like delayed deliveries during the holiday season. With a recent rise in coronavirus related hospital admissions, it could face more such obstacles. But, I think over the long-term its prospects look great, going by the fast shift towards digital shopping seen during the pandemic. I hold it in my portfolio already, and could buy more when it is still down. 

Our 5 Top Shares for the New “Green Industrial Revolution”

It was released in November 2020, and make no mistake:

It’s happening.

The UK Government’s 10-point plan for a new “Green Industrial Revolution.”

PriceWaterhouse Coopers believes this trend will cost £400billion…

…That’s just here in Britain over the next 10 years.

Worldwide, the Green Industrial Revolution could be worth TRILLIONS.

It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead!

Access this special “Green Industrial Revolution” presentation now

Manika Premsingh owns BP, Royal Mail, and SSE. 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.

Source link

You may also like

Leave a Comment