2 FTSE 100 dividend shares I’d buy and aim to hold for 10 years

I’m scouring the market for some of the best FTSE 100 dividend shares to buy this month. Here are two I think could help me make terrific returns.

| 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.

Scene depicting the City of London, home of the FTSE 100

Image source: Getty Images.

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.

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.

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.

Hand holding pound notes

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.

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 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.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »