2 mega-cheap FTSE 100 dividend stocks to buy!

I think these could be among the best FTSE 100 dividend stocks to buy right now. Oh, and they trade on rock-bottom earnings multiples too!

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I think these FTSE 100 shares could help me make excellent returns over the next decade. Here is why.

Dirt-cheap… on paper

Signs are growing that Britain’s housing market is cooling after 2021’s spectacular performance. The Bank of England last week said that mortgage demand for home purchase fell during the final three months of last year. Threadneedle Street thinks  the number will continue to fall during the first three months of 2022 too.

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Housebuilders such as Barratt Developments (LSE: BDEV) aren’t likely to see prices of their newbuilds rocket like they have during the pandemic then. At the same time, margins are coming under increasing pressure from rising building material costs.

The low earnings multiples of the likes of Barratt suggest a storm could be coming. Today, this FTSE 100 share trades on a forward price-to-earnings (P/E) ratio of just 9.1 times. It’s my opinion though, that such valuations don’t reflect just how brightly conditions in the housing sector remain.

Healthy growth + big dividends

A combination of historically-low interest rates, ongoing Help to Buy support for first-time buyers, and intense competition among lenders should keep property prices rising at a healthy rate. At the same time, government plans to build 300,000 new homes a year to stop the home price boom look bang in trouble.

City analysts believe Barratt’s earnings will rise 16% in this fiscal year (to June 2022) and increase an extra 3% in financial 2023. I’m backing Barratt and its peers to continue delivering solid and sustained bottom-line growth beyond the medium term too.

It’s important to note that I have skin in this particular game. I own Barratt shares in my stocks portfolio alongside Taylor Wimpey. I wouldn’t have bought these companies if I didn’t have a positive view of the UK housing market, of course. It’s also why I also count brick manufacturer Ibstock among my holdings.

At current prices, I’m considering buying more Barratt shares. As well as that low P/E multiple, the builder also carries a mighty 5.3% dividend yield.

Another FTSE 100 bargain!

I think HSBC Holdings (LSE: HSBA) could be set for more near-term turbulence than Barratt. Upcoming Federal Reserve interest rate hikes to curb the inflationary boom threaten to significantly damage economic conditions in Asia. But as a long-term investor I still think it could be too cheap to miss at current prices.

Today the FTSE 100 bank trades on an undemanding P/E ratio of 11 times for 2022. It also carries an index-beating 4.4% dividend yield (the Footsie forward average sits around 3.4% times). I don’t think soaring banking product demand in HSBC’s emerging markets is reflected in its current price.

World Data Lab analysts think a staggering 1bn Asians will join the middle class by 2030. These people will need places to park their cash and financial products to match their increased affluence. I think regional banking heavyweight HSBC will be in one of the box seats to make big profits from this megatrend.

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Royston Wild owns Barratt Developments, Ibstock, and Taylor Wimpey. The Motley Fool UK has recommended HSBC Holdings and Ibstock. 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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