It’s a great time to buy FTSE 100 shares because many have a high dividend yield right now. But time could be running out to bag these bargain stocks.
The markets have been depressed for a while and there may be a bull phase coming. Although such outcomes are not certain.
I’m shopping for shares now
But in a bullish stock market, valuations will likely rise causing those dividend yields to reduce. So I’m shopping for shares now before it’s too late.
For example, I like the look of Smurfit Kappa (LSE: SKG), the paper-based packaging company. With the share price near 2,968p, the forward-looking dividend yield is around 4.5% for 2024.
City analysts expect incremental annual increases in the dividend ahead. And most brokers following the firm rate the shares as either a ‘buy’ or a ‘strong buy’.
In April, the company reported a decent first-quarter performance. And the directors said they expect the demand environment to improve as the year progresses.
Meanwhile, the share price remains depressed. And I see the situation as an opportunity to buy good value with the shares.
However, the business is exposed to the ups and downs of the economy. And any big downturn arriving could affect trading. Nevertheless, the stock tempts me now. And if I had spare cash to invest, I’d be inclined to consider adding the stock to my diversified portfolio.
But I’m also keen on Next (LSE: NXT), the diversified fashion, homewares, and beauty products retail giant.
The company sells from stores and online, and that hybrid approach helped the business trade well through the challenging pandemic years.
With the share price near 6,714p, the forward-looking dividend yield is around 3% for the trading year to January 2025. And although that yield is not as high as Smurfit Kappa’s, I think the stock would make a good addition to my portfolio.
However, retail businesses like this tend to have inherent cyclicality. And if economic conditions deteriorate, it’s likely the business could suffer.
Steady dividends likely ahead
Nevertheless, City analysts expect steady dividends ahead from the company. And I’d be inclined to align my portfolio with the fortunes of the business by buying some of the shares now.
However, I’ve also got my eye on Unilever, the fast-moving consumer goods business. With the share price near 4,265p, the forward-looking dividend yield is just above 3.7% for 2024.
City analysts expect mid-single-digit percentage advances in the dividend this year and next. And that suggests the business is ticking along in good health.
In April, Unilever posted a decent set of first-quarter results with a positive outlook statement.
There’s always the risk that the company’s branded consumer products could fall out of favour with a cash-strapped public. But for the time being, the trading numbers of the business have been holding up well.
I’d be inclined to embrace the risks and add a few of the shares to my diversified long-term portfolio.