During the past few weeks, a large number of FTSE 100 dividend stocks have decided to put their payouts on ice. This has been a disaster for income investors. The FTSE 100 was one of the best indexes in the world for income seekers. It now looks as if it could lose that crown.
However, income hunters aren’t out of options just yet. Some FTSE 100 dividend stocks are still standing by their distributions. With that in mind, here are two FTSE 100 dividend stocks that could be great additions to your Stocks and Shares ISA this month.
FTSE 100 dividend champion
Unilever (LSE: ULVR) is one of the FTSE 100’s top dividend stocks. It doesn’t look as if this is going to change anytime soon. The company’s dividend yield, which currently stands at 3.8%, is covered 1.5 times by earnings per share.
That suggests there’s plenty of scope to maintain the payout, even if earnings fall by around a third.
While it’s unlikely the company will be able to escape the crisis unscathed, Unilever is one of the largest producers of personal hygiene products in the world. Demand for these products has surged over the past few weeks. That suggests Unilever’s sales may not suffer as much as some of its FTSE 100 peers.
So far, management has not commented on how the crisis has affected the business. Nevertheless, Unilever has announced it’s committing €100m to help the fight against the pandemic through donations of soap, sanitiser, bleach and food. On top of this, management has committed a further €500m of cash-flow relief to support its suppliers.
These actions should ensure the business is ready to go when the economy returns to normal. As such, Unilever looks well-placed to weather the current storm and could come out stronger on the other side.
Cleaning king
Like Unilever, FTSE 100 consumer goods champion Reckitt Benckiser (LSE: RB) also gets a large chunk of its sales from cleaning products. This should provide some protection against a decline in sales in other parts of the business.
Indeed, the company has already announced it’s planning further investments to increase its production capacity of critical cleaning products, such as disinfectants sanitisers and soaps, to help fight the virus.
These additional investments will impact the company’s bottom line in the near term but should pay off over the long run.
Therefore, if you’re looking for an income investment to add to your Stocks and Shares ISA in April, it could be worth taking a closer look at Reckitt.
The company currently supports a dividend yield of 2.8%. The payout is covered 1.7 times by earnings per share. That implies earnings could fall by around 40% before the dividend is in jeopardy.
Unfortunately, you’re going to have to pay a premium for Reckitt’s defensiveness. The stock is dealing at a forward price-to-earnings (P/E) ratio of 20.7.
However, considering the group’s position in the market for cleaning products, as well as its dividend cover, this could be a price worth paying to get your hands on one of the FTSE 100’s top income stocks.
