Should I buy this cheap FTSE 100 dividend stock after today’s news?

This FTSE 100 stock trades on a low PEG ratio and carries market-beating dividend yields. Should I buy it for my shares portfolio today?

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Investor confidence in property stock Land Securities Group (LSE: LAND) has improved considerably during the past 12 months. The FTSE 100 firm was last trading at 713p in Friday business, rising almost a quarter in value from this point in 2020. By comparison the broader Footsie has increased 19% over the period.

It’s no surprise as to why Land Securities has outstripped the FTSE 100 in this time. The retail, leisure, and office space provider is highly cyclical. Signs of a strong economic rebound have boosted sentiment towards the business. Critically, the easing of Covid-19 lockdowns have allowed its non-essential retail tenants to open their doors again.

More bad news

Land Securities isn’t a UK share I’ve invested in, though. The outlook here might be better than it was a year ago, sure. But the property play still faces significant threats to long-term growth as online retail is tipped to keep grabbing custom from bricks-and-mortar operators. Changing shopper habits in the wake of the pandemic, and a steady rise in investment in e-commerce across the retail sector, should benefit the virtual channel.

Data released today from researcher CoStar Group underlines the threat to property stocks like Landsec. It shows that just 79 department stores are still trading in Britain, down an eye-popping 388 from 2016 levels. A great number of these closures have been in shopping centres operated by the likes of Landsec. The closures could keep mounting, too, as its tenants fight for custom and costs like wages and business rates increase.

FTSE 100 builds for the future

That said, Land Securities is taking steps to rejuvenate the declining physical retail space. It hopes to improve footfall in its retail properties by investing heavily to make them more fun and pleasant places to shop. The company is also changing the mix of its assets by moving away from pure retail to latch onto the booming leisure sector. Physical retail will always have a place in the broader industry which offer an experience that e-retail cannot match. And these steps could help the business thrive in this segment.

It could also be argued that the risks to Landsec are baked into the share price right now. The business currently trades on a forward price-to-earnings growth (PEG) ratio of 0.8. Any reading below 1 suggests that a stock could be undervalued by investors.

An added bonus to buying Land Securities today is that at current prices its dividend yield sits at a fatty 4.6%. This beats the broader FTSE 100 average of 3.4% by a decent distance.

In my opinion, though, Landsec’s low rating reflects its high risk profile today. Its retail assets face an uncertain future while the growing popularity of flexible working could hit demand for its office space in future, too. I’d much rather buy other blue chip shares right now.

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 has no position in any of the shares mentioned. The Motley Fool UK has recommended Landsec. 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.

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