2 FTSE 100 dividend shares I’d buy to own for 10 years!

I think these FTSE 100 shares could be among the best for long-term investors right now. Here’s why I’d add them to my own investment portfolio.

| More on:

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.

A young black man makes the symbol of a peace sign with two fingers

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I don’t have unlimited reserves of capital I can use to buy UK stocks. So for the time being I’m building a list of FTSE 100 shares I plan to invest in.

Here are two British blue-chips I plan to buy if I have spare cash to spend.

Antofagasta

The process of mining for raw materials is extremely complex. Even the biggest and best-run commodities company can endure sudden and severe problems that can take a big bite out of earnings.

Take Antofagasta (LSE:ANTO) for instance. Production at the copper giant slumped 10.4% last year to 646,200 tonnes, due to two major problems at its Chilean operations. Droughts hit water supplies while a pipeline leak affected copper concentrates supply.

This, combined with lower copper prices, caused pre-tax profit to fall 26% from 2021 levels.

Yet despite these risks, I still believe investing in big miners like this is a good idea. It’s why I own Rio Tinto shares in my stocks portfolio.

Riding the supercycle

The world is tipped to embark on a fresh commodities supercycle. Trends such as soaring demand for renewable energy and buoyant construction activity in emerging markets are tipped to turbocharge demand for industrial metals.

Firms like Antofagasta should be well-placed to exploit this raw materials boom. Indeed, research from S&P Global illustrates the huge earnings potential for copper producers in particular.

Analysts predict that “copper supply shortfalls [will] begin in 2025 and last through most of the following decade”, a scenario that could lift metal prices.

They also say demand will double between now and 2035 and that “substitution and recycling will not be enough to meet the demands of electric vehicles, power infrastructure, and renewable generation”.

Chart showing projected copper demand.
Source: S&P Global

Antofagasta is expanding its operations to take advantage of a favourable price landscape too. Ongoing expansion at its flagship Los Pelambres mine, for one, will boost annual copper production by 60,000 tonnes over the first 15 years.

Further supply issues could cause some earnings volatility. But I’d still back it to deliver exceptional long-term profits growth.

Segro

For different reasons I believe real estate investment trust (REIT) Segro (LSE:SGRO) could also be a top stock for me to own for the next decade.

This FTSE 100 share builds, acquires and then lets out so-called big box commercial properties. These are the sorts of assets for which demand is booming as e-commerce continues to grow. They are popular bases for manufacturers, retailers and couriers alike.

However, supply of these critical properties is failing to meet this growing demand. And so Segro continues to enjoy impressive rental income growth (like-for-like rents grew almost 7% last year). A weak development pipeline in the UK market means this shortfall looks set to persist.

It’s true that company profits could suffer in the near term as the economy splutters. The business could find it more difficult to collect rents from its tenants in this landscape. But over the long term I still expect Segro shares to deliver excellent investor returns.

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 positions in Rio Tinto Group. The Motley Fool UK has no position in any of the shares mentioned. 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.

More on Investing Articles

Affectionate Asian senior mother and daughter using smartphone together at home, smiling joyfully
Investing Articles

How I’d invest my first £20k ISA to target £4,900 a year from dividend shares

Looking for dividend shares in a new Stocks and Shares ISA, and want diversification too? Here's how I'd go about…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

Yields of up to 7%! I’d consider boosting my income with these FTSE dividend stocks

The London market has some decent-looking dividend stocks right now, and I’m tempted by these two for growing income streams.

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »