Volatility on the FTSE 100 this year has supercharged the high yields of many blue-chip stocks. There are now stacks of quality shares whose forward dividend yields smash the 3.8% index average.
Hargreaves Lansdown investors have been piling into some of these FTSE businesses in recent days. And I’m considering adding them to my portfolio for their exceptional all-round value.
Here are the top three stocks purchased during the last seven days.
Aviva
Insurance giant Aviva (LSE:AV) currently sits at the top of the tree. The business accounts for 2.76% of all buy orders through Hargreaves Lansdown in the last week.
It’s true that demand for its financial services could struggle as the global economy cools. Yet over the long term, sales of pensions and other retirement products is are for healthy growth as average population ages rapidly increase.
Aviva has the brand strength to make the most of this opportunity too. It’s also focusing far more than its rivals on digital to capitalise on the changing way consumers do their business.
Today its shares trade on a forward price-to-earnings (P/E) ratio of 7.2 times. They also carry a juicy 8.2% corresponding dividend yield.
Legal & General
Rival company Legal & General (LSE:LGEN) is a UK income share I already own. And at current prices I’m thinking of adding to my position.
As well as carrying a P/E ratio of 6.7 times for this year, its dividend yield sits at 8.9%.
The business accounts for 1.85% of all buy deals via Hargreaves Lansdown over the last week, putting it in second place. Bullish investors like me believe that, like Aviva, it’s well placed to exploit demographic changes in the West.
However, its broad geographic position could give it the edge. Its presence in Europe, North America and Asia protects group earnings from weakness in one or two territories. It also gives the company exposure to fast-growing emerging regions.
Competition is high across its markets. But I still expect earnings here to rise strongly over the next decade.
Vodafone Group
Telecoms giant Vodafone (LSE:VOD) is in third place among popular buys for Hargreaves Lansdown clients. It accounted for 1.77% of all deals, putting it fractionally ahead of Lloyds Banking Group.
Like those other shares it offers appetising all-round value for money. A forward-looking P/E ratio of 14.5 times sits well below the industry average. But what really grabs my attention is its super-high 9.2% dividend yield.
Vodafone has its share of problems right now. In particular, new telecoms laws in its single-largest market, Germany, is causing its customer base to steadily erode.
But encouragingly, new CEO Margherita Della Valle is introducing sweeping changes (including cutting 11,000 jobs) to turn the business in the right direction again. As the business invests heavily in ultra-fast broadband and 5G, I feel it could still deliver excellent long-term investor returns.
