I’m searching for FTSE 100 dividend stocks to buy next month. With index-beating dividend yields from 4% to 6%, I believe these three shares could make good additions to my Stocks and Shares ISA.
Let’s take a closer look.
National Grid — 4.1% dividend yield
The National Grid (LSE: NG) share price is up 11% this year, outperforming the majority of FTSE 100 shares. It’s also up 33% on a 52-week basis. I put this down to the company’s impressive half-year results.
Operating profit was up 52%, earnings per share rose 66% and capital investment increased 22%. Looking ahead, CEO John Pettigrew stated National Grid’s on track “to continue to deliver a sustainable CPIH-linked dividend“.
The CPIH inflation rate is currently 6.2%. In that context, it’s reassuring for me that Pettigrew flagged continued dividend distributions as a key priority.
The utilities giant recently sold 60% of its gas transmission business to a consortium led by Macquarie. Given this arm of its business saw a 77% uptick in half-year operating profit, the National Grid share price could potentially face some wobbles as the company transitions towards Net Zero.
Nonetheless, it’s demonstrated strength across its divisions. Accordingly, National Grid is a dividend stock I’d buy in May.
Sainsbury’s — 4.4% dividend yield
Despite its status as a defensive stock, there’s been a 14% drawdown in the J Sainsbury (LSE: SBRY) share price in 2022. It’s also declined 2% over 12 months.
However, the grocery stock has a good dividend history, yielding between 3.8% and 4.9% for the past five years. The sole exception was 2020 at 1.6%, albeit several FTSE 100 dividend stocks halted distributions altogether.
Sainsbury’s has also successfully retained market share over recent years. It remains the UK’s second-largest supermarket behind Tesco, with over 15% of the market. I also like the stock’s forward price-to-earnings ratio at 10.48, which makes it cheaper than several industry competitors.
As living costs rise, Sainsbury’s consumers could potentially switch to budget chains, such as Aldi and Lidl. Nonetheless, I still see value in the Sainsbury’s share price today at 236p. I’ll wait for the full-year financial results tomorrow but, barring any nasty surprises, I think Sainsbury’s could be a useful dividend stock to add to my portfolio.
Vodafone — 6% dividend yield
Telecommunications company, Vodafone (LSE: VOD), has had a good start to the year. The Vodafone share price has climbed 11% in 2022, although it’s down 9% over 52 weeks.
Vodafone has a very impressive dividend track record among Footsie stocks. Its yield has never dropped below 5.4% in the past five years, making it a trusty passive income generator.
I’m also attracted to the stock’s exposure to markets beyond British shores. Vodafone operates Europe’s largest 5G network and owns M-Pesa, a mobile money service, which the company is rolling out throughout Africa. It boasts 187m mobile customers in eight African markets, representing over 40% of Africa’s total GDP.
I’m slightly concerned by the company’s debt position at an eye-watering €73bn, which could act as a headwind for the Vodafone share price as interest rates rise. However, that’s a risk I’m prepared to take on to invest in one of the most reliable FTSE 100 dividend stocks.
