The Motley Fool

2 FTSE 100 dividend stocks to buy in September

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.

FTSE 100 dividend stocks play an important role in my investment portfolio. Not only do they provide me with regular passive income but they also add a degree of portfolio stability.

Here, I’m going to highlight two FTSE 100 dividend stocks I see as attractive at present. I’d be happy to buy both as we begin September.

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 a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

A top FTSE 100 dividend stock

One dividend stock that strikes me as a ‘buy’ right now is Smith & Nephew (LSE: SN). It’s a leading healthcare company specialising in orthopaedic implants and advanced wound management solutions. Its share price has pulled back recently and I think this has provided a great buying opportunity.

Smith & Nephew struggled during Covid-19 last year due to the fact that so many elective medical procedures had to be postponed. However, it’s now making a strong recovery. For the six-month period to 3 July, revenue was up 28%. For the full year, the group expects revenue growth of 10-13% (I think there’s a good chance it will exceed this). If revenues and profits continue to rebound, its share price should too.

Smith & Nephew isn’t the highest-yielding stock in the lead index. Currently, the prospective yield here is only around 1.8%. I still see appeal in that yield however. This is a company with an excellent long-term dividend growth track record and I expect its dividend payouts to continue rising over the long term as profits expand.

One risk to consider here is further Covid-19 setbacks. If the Delta variant results in a high level of hospitalisations, Smith & Nephew could be disrupted again.

But I’m comfortable with the risks. With the stock trading at 19 times next year’s earnings (versus 27 times for US rival Stryker), I see value here.

Attractive dividend yield

Another FTSE 100 dividend stock I like the look of right now is Unilever (LSE: ULVR). It’s a leading consumer goods giant that owns a wide range of brands such as Dove, Domestos, and Hellmann’s. Its share price has also pulled back recently (mainly due to concerns over higher input costs) and I see this as a good opportunity to build a position.

Unilever’s recent half-year results were quite solid, in my view. For the six months to 30 June, sales were up 5.4%. E-commerce sales jumped 50% while sales in the emerging markets were up 8.3%. These figures suggest to me the company’s heading in the right direction, despite the fact that inflationary pressures are impacting profits.

At present, Unilever shares offer a prospective dividend yield of around 3.7%. That yield’s very attractive, in my view. By contrast, the median forward-looking dividend yield across the FTSE 100 index is around 3.2%. It’s worth pointing out that a yield of 3.7% is quite high for Unilever.

The key risk here, in my view, is that inflation could continue to be a problem for the company. It’s worth noting that last week, analysts at JP Morgan downgraded the stock to ‘underweight’ on the back of inflation concerns.

The contrarian in me sees an opportunity here however. With the stock currently a little bit out of favour and trading on a forward-looking P/E ratio of under 19, I think it’s a good time to be buying.

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 still 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 a 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!

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Edward Sheldon owns shares of Smith & Nephew and Unilever. The Motley Fool UK has recommended Smith & Nephew and 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.