I’m searching for the best FTSE 100 dividend stocks to buy for my portfolio next month. Which of these popular blue-chip shares should I snap up?
Lloyds Banking Group
Forward dividend yield: 6.2%
Rising interest rates have been a huge boost to banks like Lloyds Banking Group (LSE:LLOY) over the past 18 months.
They’ve boosted profits by widening the gap between the interest they give to savers and charge borrowers (known as the net interest margin, or NIM).
Encouragingly, these companies look set to continue benefiting from Bank of England interst rate moves in August and possibly into 2024 too. Indeed, Lloyds has hiked its full-year NIM forecasts recent days and predicted it “to be greater” than 3.1% in, up from 2.94% in 2022.
Yet I still have no plans to buy the bank. I think the Lloyds share price could continue declining as the tough economic environment dampens loan growth and pushes credit impairment charges higher.
The company set aside another £662m to cover bad loans in the first half of 2023 alone.
The worry for Britain’s banks is that the UK is in danger of a prolonged downturn too. On top of this, competition from challenger banks and building societies is also steadily heating up.
Glencore
Forward dividend yield: 7.4%
Mining giant Glencore (LSE:GLEN) and its share price could on the other hand perform strongly in the weeks and months ahead. I think it could have further room to grow following weakness in the first half of the year.
Signs that China is to ramp up stimulus measures are a positive signal for commodities demand. So are clues of ongoing strength in the US economy.
In fact, the IMF’s decision to hike its global growth forecasts (to 3% from 2.8% this week) suggests investor appetite for cyclical stocks like commodities companies could heat up.
Glencore is a stock I’d buy today to own for the long haul. I think profits at the raw materials producer and trader could rise strongly as the world embarks on a new commodities supercycle.
I’d purchase its shares even though rising supply in certain markets could hamper profits growth.
Vodafone Group
Forward dividend yield: 9.3%
As a long-term investor, I also find Vodafone Group (LSE:VOD) shares very attractive right now. That’s despite trading troubles in Germany following the ban on product bundling.
I think now could be a time to buy the telecoms company as a recovery play. Latest financials this week showed that turnover improved in the three months to June.
It also revealed “broad-based service revenue improvement across almost all European markets”.
New chief executive Margherita Della Valle has a plan to keep the company moving in the right direction. These include doubling down on its Vodafone Business division and slimming down its global operations to cut costs.
It’s early days, but the noises so far are encouraging. I think the Vodafone’s share price could rise strongly after a prolonged period of underperformance as 5G adoption takes off.
Soaring telecoms demand in Africa could also power the FTSE firm’s profits higher.
