Investors should always do plenty of research before pulling the trigger and buying UK shares. Even FTSE 100 shares with long earnings records and dividend growth can end up disappointing shareholders.
From the most celebrated FTSE blue-chip stocks to the tiniest of penny stocks, individuals who pore over trading statements, broker reports and other key materials have a better chance of success than others.
And the importance of doing such research becomes more important for investors who have little money. Their ability to diversify through a range of different stocks is much reduced, and thus their exposure to risk is higher. The importance of getting each investment decision right is much greater.
With this in mind, here are three FTSE 100 dividend shares I’d happily buy today. Their defensive qualities offer an extra layer of protection for investors.
National Grid
Keeping Britain’s lights on is an expensive business. And so power grid operator National Grid has accrued enormous amounts of debt. This means that, with interest rates rising, the cost of servicing its borrowings is taking a big bite out of earnings.
Yet I still expect the utilities giant to remain a robust profits generator. This is thanks in part to its defensive operations which, unlike those of many other UK shares, are largely unaffected by broader economic conditions.
I’m also bullish on National Grid shares because of its commitment to increasing its asset base in the UK and US. This underpins its target to grow annual earnings by 6% through to 2026.
Today, the company boasts a chunky 5.1% forward dividend yield.
United Utilities
Water supplier United Utilities is another deliciously dull FTSE 100 share on my radar. Keeping the water flowing and sewage processed are also two of modern life’s essential services. Thus profits can also be expected to increase steadily over the long term.
High debts are also a problem here. The watchful gaze of regulators is another danger that investors must consider. Indeed, the threat of heavy Ofwat fines is growing as the public outcry over dirty rivers rises.
Yet, on balance, I consider the potential rewards on offer here to outweigh the risks. The prospective dividend yield here sits at 4.6%.
GSK
Drugs development can be troublesome business. Costs can spiral out of control, and testing setbacks can have huge negative implications for sales forecasts. And products must always be of a high standard otherwise they won’t get past the regulator.
That said, I’d still buy GSK shares for my portfolio today. Past success is not a guarantee of future fortunes. But the FTSE firm’s excellent track record of getting its drug to market helps assuage any fears I have.
In fact, I believe the company’s shares could rise strongly in value over the long term. Global healthcare investment is steadily increasing as populations increase and wealth in emerging regions jumps. I think GSK’s focus on fast-growing therapy areas like vaccines will also pay off handsomely.
Today, the firm carries a healthy 3.7% dividend yield for 2023.
