3 high-yield FTSE 100 stocks I’m hoping to buy in October!

I think these high-yield UK dividend shares could be too cheap to miss. This is why I’m considering adding all three to my 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.

Young Black man sat in front of laptop while wearing headphones

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’m expecting to have some extra cash to invest in dividend-paying UK stocks next month. So I’m searching the FTSE 100 for the best high-yield shares to buy for long-term passive income.

Here are three I’m considering adding to my Stocks and Shares ISA. I’d buy them in October and look to hold them for years.

Aviva

Financial services giant Aviva (LSE:AV) has an opportunity to grow earnings strongly during the next 10 years.

In its UK, Irish, and Scandinavian markets, the size of elderly populations are increasing rapidly. As life expectancy rises in this fast-growing demographic, people are spending more on investment products, pensions, and life insurance policies to fund their retirement and leave something behind for their loved ones.

As a market leader, Aviva is well placed to exploit this opportunity, though investors need to be aware that competition in some of its markets is hotting up. FTSE 100 rival M&G, for instance, has just returned to the bulk annuity purchase market after exiting in 2016.

However, I think Aviva’s low price-to-earnings (P/E) ratio of 9.6 times for 2023 and 8.1% dividend yield make it too good to miss.

Glencore

Near-term earnings at Glencore (LSE:GLEN) could be more volatile than those of Aviva. Tough economic conditions in major commodities consumer China mean profits (and thus dividends) could disappoint.

But I’m confident that Glencore will still pay the predicted dividends that brokers expect. This is thanks to its strong balance sheet — the FTSE firm’s net-debt-to-EBITDA ratio stood at just 0.2 times as of June.

Today the miner carries an 8.2% dividend yield for 2023. And it trades on a P/E ratio of 9.1 times. I don’t think this low valuation reflects the bright long-term outlook for metals demand that could drive earnings here through the roof.

Phenomena such as the growing green economy and the digital revolution mean huge amounts of copper, nickel, and other base metals looks set to boom. And Glencore has the scale to exploit this opportunity through acquisitions and steady investment in existing assets.

HSBC Holdings

Mounting pressure in China’s real estate market poses a threat to Asia-focused HSBC’s (LSE:HSBA) profits. This week, property giant Sunac filed for bankruptcy protection in the US in what is a fresh sign of the sector’s troubles.

Yet it’s my belief that this threat is baked into HSBC’s rock-bottom share price. Today the bank commands a P/E ratio of just 6.2 times.

I remain quite bullish on the company’s trading outlook this decade. China’s government and central bank seem prepared to step in to avert a full-blown property sector crisis. So I expect profits to soar from current levels as rising personal wealth drives retail banking product penetration from current low levels.

HSBC has the brand recognition to grasp this massive opportunity. It is also spending billions in its core markets of China, Hong Kong, and Singapore to boost its market position.

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.

HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended HSBC Holdings and M&g Plc. 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

Investing Articles

Turning a £20k ISA into a stunning £38,023 a year passive income

Harvey Jones says investing regular sums in a Stocks and Shares ISA is a brilliant way of building up a…

Read more »

Growth Shares

Growth stock YouGov just fell 46%. Time to buy?

YouGov’s share price just fell from 820p to 440p after a poor trading update. Is now a good time to…

Read more »

Investing Articles

2 mouthwatering FTSE growth stocks I’d buy and hold for 10 years

Growth stocks purchased today could be the gateway to many years of capital growth and returns. Here are two picks…

Read more »

Investing Articles

Can the IAG share price really be as dirt cheap as it looks?

While most shares have recovered since the Covid days, the IAG share price is staying stuck to rock bottom. Surely…

Read more »

Investing Articles

BAE Systems shares are flying! Have I missed the boat?

Sumayya Mansoor looks into whether or not BAE Systems shares are still a good buy for her portfolio after the…

Read more »

British flag, Big Ben, Houses of Parliament and British flag composition
Investing Articles

1 heavyweight FTSE 100 share I’d buy as London retakes its crown

Some Footsie firms are extremely large, but that doesn't mean they couldn't get even bigger. Here's one such FTSE 100…

Read more »

Investing Articles

I’d buy 5,127 National Grid shares to generate £250 of monthly passive income

With a dividend yield of 6.5%, Muhammad Cheema takes a look at how National Grid shares can generate a healthy…

Read more »

Investing Articles

The FTSE 100’s newest member looks like a no-brainer to me!

This Fool explains why she sees the newest member of the FTSE 100 as a great opportunity after its recent…

Read more »