I’m on the hunt for top FTSE 100 dividend shares to add to my investment portfolio. Here are two I think would make great long-term investments.
7.5% dividend yields!
I already own FTSE 100 dividend shares Barratt Developments and Taylor Wimpey in my Stocks and Shares ISA. And I think Persimmon (LSE: PSN) would make another great addition to my shares portfolio. Its 7.5% forward dividend yield actually smashes the readings which those other income stocks currently offer.
Demand for freshly-built homes is soaring, thanks to a blend of terrifically-cheap mortgage products and massive government purchase incentives.
I think low Bank of England interest rates are here to stay for some time yet to help the economic recovery following Covid-19. And the British government is doubling-down on its vote-winning strategy of helping first-time buyers to get on the property ladder.
Just yesterday, the First Homes project was launched, a programme that will help key workers and local people buy newbuild homes at whopping discounts of up to 50%.
I think UK housebuilding shares like Persimmon are great buys, despite the threat of rising costs. Latest data showed cost inflation across the construction industry struck all-time highs in May.
UK construction 🏗 PMI for May reveals a familiar story. Rapid growth in output and orders but accelerating inflationary pressures. Output hits 64.2 (highest since Sep-14). New orders hit a record high 68.8. But input cost inflation hits 94.7!! ⚠️ a record high.
— Richard Ramsey (@Ramseconomics) June 4, 2021
A FTSE 100 dividend share to hold forever
I believe Polymetal International (LSE: POLY) is another FTSE 100 dividend share that’s worth serious attention. It’s not just because the gold miner carries a mighty 8.7% dividend yield for 2021. The company looks cheap from an earnings perspective too. Today, it trades bang on the bargain-benchmark prospective price-to-earnings (P/E) ratio of 10 times.
Prices of precious metals sank sharply in the first few months of the year as Covid-19 vaccines improved investor mood over the economic recovery. But gold prices have started rising again and, at $1,870 per ounce, are less than $200 below last summer’s record highs again.
I think they could keep rising too as fears over global inflation rise, the US dollar continues to fall (a change that makes it more cost-effective to buy dollar-denominated assets like gold) and a stream of new coronavirus variants emerge.
There’s no guarantee Polymetal’s profits will soar if gold prices jump to new peaks. The company has a history of impressing on the production front in recent times. Though the complex and unpredictable nature of metals mining means that costly problems are an ever-present threat.
Still, I think having exposure to gold is always a good idea for protection against sudden economic downturns, as last year’s surge to record highs shows. And I think FTSE 100 dividend share Polymetal is an attractive way to do this.
Don’t miss our special stock presentation.
It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.
They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.
That’s why they’re referring to it as the FTSE’s ‘double agent’.
Because they believe it’s working both with the market… And against it.
To find out why we think you should add it to your portfolio today…
Royston Wild owns shares of Barratt Developments and Taylor Wimpey. 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.