The Motley Fool

I’d buy these 2 FTSE 100 dividend shares and retire on a passive income

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.

A person holding onto a fan of twenty pound notes
Image source: Getty Images.

I wouldn’t buy and hold every FTSE 100 dividend share until retirement and beyond. But I do like big-cap dividend-paying companies with defensive underlying operations. I think both these selections have the potential to provide my portfolio with capital growth via a rising share price and income growth via shareholder dividends.

A strong record of dividend growth 

Unilever (LSE: ULVR) completed the unification of its company legal structure in November. And, for the first time, now trades with one market capitalisation, one class of shares and one global pool of liquidity. Thank goodness! Simplicity is always best if it can be achieved. And the company is maintaining its listings on the Amsterdam, London and New York stock exchanges. So, there should be no problem for investors wanting to buy and sell the company’s shares.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

And buying shares in Unilever strikes me as a good idea right now because the share price has eased back a bit recently. However, the fast-moving consumer goods giant is still an attractive candidate for a long-term investment for me.

I like the defensive nature of the sector. Unilever makes products that many people deem to be essential and they tend to show loyalty to the firm’s powerful brands such as Domestos, Ben & Jerry’s and PG Tips. And that leads to stable cash flow, which is ideal for keeping the shareholder dividends rolling out.

The company’s five-year record shows steady annual growth in the dividend. And I reckon that growth looks set to continue after a slight wobble this year because of the pandemic. Meanwhile, with the share price at 4,325p, the forward-looking dividend yield for 2021 is around 3.6%. I’d buy some of the shares now to lock that rising income stream into my portfolio. And I’d hold for at least the next five years, and probably much longer than that.

Accelerating investment for growth 

In November, Smurfit Kappa (LSE: SKG) raised a gross €660m in a share placing. That represented just over 8% of the company’s issued share capital immediately before the placing. And the money raised will help the paper-based packaging supplier capitalise on structural growth opportunities.”

I think the business has some defensive qualities because it serves the fast-moving-consumer-goods sector. And Smurfit Kappa is also an important cog in the trend towards e-commerce and all the parcel deliveries that flow from that trend.

The company reckons it will use the net proceeds of the placing and cash coming into the business from trading to accelerate investment over the next three years. As such, I think this is an interesting time to buy shares in the company.

Indeed, the directors reckon the ongoing development of e‑commerce and rising demand for sustainable, paper-based packaging present opportunities for Smurfit Kappa. So, accelerated investment now will help the company increase its competitive advantage and enhance its operational efficiency.

Meanwhile, with the share price near 3,412p, the forward-looking dividend yield is near 3% for 2021. I’d buy and hold some of the shares to collect the dividend stream while waiting for growth to materialise over the long haul.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

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 daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Unilever. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.