2 FTSE 100 dividend stocks I’d buy in a Stocks and Shares ISA today

These two FTSE 100 (INDEXFTSE:UKX) dividend shares could offer wide margins of safety and bright growth prospects in my opinion.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Buying FTSE 100 dividend stocks could prove to be a shrewd move in the long run. Various studies have shown that a large proportion of long-term total returns from investing in the stock market are generated by dividends and their subsequent reinvestment.

Furthermore, stocks that have the potential to deliver rapidly-rising dividends over a sustained period could become increasingly in demand among investors. This may lead to rising share prices that could enhance the total returns on offer.

With that in mind, here are two FTSE 100 stocks that appear to offering improving dividend prospects.


The recent performance of FTSE 100 mining company Glencore (LSE: GLEN) has been relatively disappointing. It has suffered from weak investor sentiment due to regulatory risks, as well as the prospect of a general slowdown in the world economy. As such, its shares trade on a price-to-earnings (P/E) ratio of just 7.2, while they offer a dividend yield of 6.2%.

Over the long run, the company could have a bright future. It is ramping-up production of the materials that are used to produce batteries for electric cars. With this likely to be a key growth area for the automotive sector, it would be unsurprising for their prices to rise. This could lead to a tailwind for the business over the coming years.

Since Glencore’s shareholder payouts are currently covered 2.2 times by profit, they seem to be sustainable at their current level. Although there may be more stable stocks available in the FTSE 100 at the present time, the company’s valuation and yield indicate that it offers a wide margin of safety. As such, now could prove to be the right time to buy it.


For investors who are concerned about the prospects for the world economy given the ongoing trade war between the US and China, gold and silver producer Fresnillo (LSE: FRES) could be a worthwhile investment.

The company could benefit from a rise in the price of precious metals over the medium term. Historically they have shown low positive correlation to the world economy’s outlook, and may even benefit from increased risk-aversion among investors.

This is expected to lead to rising profitability for the business, with Fresnillo forecast to post a rise in net profit of 27% in the next financial year. This is due to catalyse its dividend growth rate, with an increase in dividends per share of 24% forecast for the 2020 financial year.

Although the stock has a dividend yield of just 2.4% at the present time, it offers strong growth potential over the long run. This could mean that an investment today offers a relatively high income return over the coming years as dividends rise. Therefore, with the stock also having defensive characteristics, it could be a worthwhile purchase for income investors.

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.

Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo. 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.

More on Investing Articles

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

Dividend deals! 2 passive income stocks that still look undervalued

Royston Wild explains why these FTSE 250 passive income stocks might STILL be too cheap to miss, despite theirrecent price…

Read more »

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

Is BT Group one of the FTSE 100’s greatest value shares?

BT's share price looks like a bargain when you look at the P/E ratio and dividend yield. Is it one…

Read more »

Frustrated young white male looking disconsolate while sat on his sofa holding a beer
Investing Articles

The National Grid share price just plunged another 10%. Time to buy?

The National Grid share price is one of the FTSE 100's most stable, and nothing much happens to it? Well,…

Read more »

Young Black woman looking concerned while in front of her laptop
Investing Articles

Up 15% in 3 months, but I still won’t touch Vodafone shares with a bargepole

Harvey Jones has been shunning Vodafone shares for years. The FTSE 100 stock is finally showing signs of life, but…

Read more »

Growth Shares

This UK stock could be like buying Nvidia in 2021

Jon Smith thinks he's missed the boat with Nvidia shares, but flags up a UK stock that has some very…

Read more »

Businesswoman calculating finances in an office
Investing Articles

The FTSE 100’s Intertek delivers a bullish update — can the share price soar?

I’d describe Intertek as a quality business with a decent dividend income, but will the share price shoot the lights…

Read more »

Market Movers

Up another 10% yesterday, how high can the Nvidia share price go?

Jon Smith talks through the latest results but flags up why further gains could be harder to come by for…

Read more »

Investing For Beginners

Down 43% in a year, I think this value stock is primed for a comeback

Jon Smith flags up why a FTSE 250 share has fallen so much in the recent past, but explains why…

Read more »