3 top FTSE 100 dividend stocks I’d buy right now

Royston Wild discusses three FTSE 100 (INDEXFTSE: UKX) dividend giants with exceptional investment prospects.

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St. James’s Place (LSE: STJ) isn’t having the best of it right now, but thanks to its gigantic dividend yield, I think it’s still worthy of your attention today.

The asset manager’s performance remains resilient despite weakness across global investment markets and total inflows in 2018 rose 8% to £15.7bn, according to financials released last month. But inflows slowed markedly in the final two months and pointed to a much tougher climate that it’ll have to navigate this year. 

What’s encouraging, though, is the way St. James’s Place is able to offset the worst of these tough conditions through its impressive client retention skills. It’s one of the reasons why City analysts still expect earnings to keep growing this year and next. And in my opinion it’s in great shape to keep growing profits over the long term as it expands its operations to latch onto growing demand for investment advice in the UK.

Dividend chasers will be cheered by news that dividends are expected to keep growing over the medium term too, and a chubby 5.4% for 2019 is available to tap into right now because of the anticipated 51.5p per share total payout.

Flying high

Airlines have been suffering from increased fuel costs over the last year, putting immense pressure on margins. International Consolidated Airlines Group (LSE: IAG) is expected to see earnings flatline on a year-on-year basis by City brokers in reflection of these obstacles, with the cheap airfare environment in Europe predicted to add some strain too.

Despite this, the FTSE 100 flyer is still anticipated to keep raising the annual dividend and a total reward of 31 euro cents per share is being tipped, a figure that creates a gigantic 4.2% yield. Its increasing exposure to the rocketing budget segment is setting it up to deliver strong profits growth in the years ahead, as are the measures it is taking to boost its fleet size and route network. I’m confident that it will have the confidence and the strength to continue hiking dividends long into the future.

Its failure to snap up Norwegian Airlines may have been disappointing but tough conditions for Europe’s budget flyers will no doubt present fresh opportunities for IAG to expand its operations through acquisition activity.

Board games

Concerns over developing oversupply in the containerboard market may have smashed Smurfit Kappa Group’s (LSE: SKG) appeal with investors last year, but its rising share price more recently suggests that the investment community has finally woken up and smelt the coffee.

The threat of rising supply from Chinese producers is a setback but it’s by no means catastrophic for the likes of Smurfit Kappa. Through the strength of its market-leading products, as well as its broadening geographic footprint (it made significant acquisitions in France, The Netherlands and Serbia last year alone), it can continue to command strong demand from its customers, in my opinion.

Besides, it’s doubling down on efforts to boost profit margins and helped by recovering input costs, these jumped 280 basis points in 2018 to 17.3%, providing more reason to be optimistic over its long-term growth prospects.

City analysts are predicting additional dividend raises for 2019, to 102 euro cents per share. And this creates a tasty 3.9% yield.

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.

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.

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