Passive income stocks are a great way to boost returns and I am always on the lookout for dividend stocks to get the most out of my investment portfolio. These are three FTSE 100 dividend stocks I have earmarked for September. They show potential for growth with above-average dividend yields.
National Grid (LSE: NG) offers a dividend yield of 5.23% on its current share price of 923p. The FTSE 100 company has shown steady growth in the last decade with a slight drop off in 2020-21 during the pandemic. The company recorded operating revenue of £3.2bn. Although earnings per share dropped 6.8% to 54.2p, the company managed to grow its dividend by 1.1% to 49.13p.
In fact, the company has increased its dividend yield every year since 2000 and I think it is on track to a 6% dividend yield in 2021. For me, this is a sign of a shareholder-centric business model focussed on steady, long-term returns.
The company also recently acquired Western Power Distribution, cementing its place as UK’s primary power grid operator.
Its share price growth in the short term isn’t too shabby either. Over the last six months, the share price has increased 12%. However, the five-year returns stand at -19%, which could put off investors. Also, the sector is highly regulated by the government which is a concern for me as any economic slide could potentially affect earnings.
But the company’s importance and focus on dividend yield make it a must-have FTSE 100 dividend stock for my passive income portfolio.
Growing sector dividend stocks
Mining stocks are flying and I see Polymetal shares as a golden investment opportunity. It has an incredible 7% dividend yield combined with an attractive entry point at the moment. At its current share price of 1,456p, the stock is trading at a forward price-to-earnings (P/E) ratio of 8.6 times. This makes the company a bargain in my books.
Analysts are wary of potential inflation in the coming months and are also predicting a fall in dollar prices, which could immensely benefit Polymetal. I think precious metals could be seen as a safer bet, prompting a jump in sales.
I am aware that Polymetal shares have been on a 20% decline in 2021. Despite this, the 7% dividend yield and growth potential make Polymetal a must-have FTSE 100 dividend stock for my portfolio.
Similarly, the insurance sector could see a massive boost after the global Covid dust cloud lifts. Aviva’s recent business restructure has boosted its dividend yield after recent sell-offs which increased its cash holdings. The company boosted its interim dividend by 5% to 7.35p which brings the total dividend yield to a solid 5.16%.
Despite strong competition in UK, the company has a strong market share and analysts predict its share price to rocket to 800p in 2024. In August, I stated that I expect its already impressive returns to grow significantly in the next decade. I also see increased importance placed on healthcare and life insurance post-pandemic. This is why Aviva is the third company on my list of FTSE 100 dividend stock to buy.
Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028 — more 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.
Suraj Radhakrishnan has no position in any of the shares mentioned. The Motley Fool UK has recommended National Grid. 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.