Two FTSE 100 dividend stocks I’d buy in February

Edward Sheldon looks at two FTSE 100 (INDEXFTSE: UKX) dividend stocks that have fallen 25% from their 2018 highs.

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While the FTSE 100 has bounced from its late-December lows and is now back above 7,000 points, there are still plenty of buying opportunities around at the moment, in my view. Here’s a look at two FTSE 100 dividends stocks I’d buy right now.

Prudential

Shares in financial services group Prudential (LSE: PRU) had a good January, rebounding after a late-December sell-off. However, at the current share price of 1,507p, the stock is still nearly 25% off its 2018 high of 1,993p. As such, I think it offers a lot of value right now.

What I like about Prudential is the group’s exposure to Asia as this provides a long-term growth story. While many investors are concerned about the health of the Chinese economy in the short term, I’m focusing on the bigger picture that wealth across Asia is rising rapidly. According to consulting firm McKinsey, the number of middle-class households across ASEAN member states is set to top 120m by 2025, approximately double the number in 2010.

This rise in wealth should result in a significant increase in demand for savings and insurance products. With Prudential generating 30% of its sales from Asia, the company looks very well placed to profit. Just recently, CEO Mike Wells said: “The profitable growth prospects of our Asia businesses remain substantial, given the increasing protection and savings needs of our customers and the extent of the footprint we have established.”

Prudential shares currently trade on a P/E ratio of 9.3 and offer a prospective dividend yield of 3.6%. I think that’s a steal for a high-quality company that offers a fantastic long-term growth story.

Hargreaves Lansdown

Another FTSE 100 dividend stock that offers a compelling long-term growth story is investment group Hargreaves Lansdown (LSE: HL). Like Prudential, it’s well off its 2018 highs right now due to the global equity market sell-off we experienced late last year. I think recent share price weakness has provided an attractive entry point.

Given current savings levels, Britons desperately need to save and invest more for retirement. And as a leader in the savings and investment market with a high market share, I think Hargreaves Lansdown looks extremely well placed to capitalise. I’ve been investing in shares for over 20 years now, and I can say that without a doubt, Hargreaves’ investment platform is the most user-friendly platform I’ve ever used.

Hargreaves reported half-year results last week and while assets under administration were down 6% (due to the fall across global equity markets in December) the number of active clients rose 4% for the period and net revenue was up 9%, which suggests the growth story is intact.

The shares aren’t particularly cheap, trading a P/E of 31.9 and sporting a yield of 2.5%. However, given the growth potential here, I think they’re worth a look at current levels after falling around 25% over the last four months.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon owns shares in Prudential and Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown and Prudential. 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.

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