3 mega cheap FTSE 100 dividend stocks

While trading at a premium to its 2017 opening price, the share value of Barratt Developments (LSE: BDEV) has endured something of a rocky ride since the turn of January as fears persist over the health of the UK housing sector.

It seems certain that the uncertainties caused by Brexit — combined with the impact of slowing wage growth and rising inflation — should dampen buyer confidence in 2017 to some extent. However, the country’s entrenched housing shortage means that demand should continue to outpace supply long into the future, keeping home prices well supported.

Indeed, Barratt commented just today that “with a record forward order book, strong consumer demand and a positive lending backdrop, we remain confident in our outlook for the full year.

The City shares my optimistic take, although earnings at Barratt are expected to flatline in the near term before bouncing back in 2018. Still, the construction colossus sports a very-decent P/E ratio of 9.4 times for the year to June 2017, below the FTSE 100 forward mean of 15 times.

And the firm’s excellent cash flows are anticipated to keep propelling the dividend, resulting in a Footsie-beating 6.9% yield and smashing the blue-chip forward average of 3.5%.

Make smoking returns

I believe Imperial Brands (LSE: IMB) is also a great share for investors to buy and hold long into the future, and reckon now represents a great time for investors to pile-in.

An anticipated 8% earnings rise in the 12 months to September 2017 creates a P/E ratio of 13.8 times. But it is in the dividend arena where Imperial Brands really stands out, the manufacturer sporting a chunky yield of 4.7%.

Brands like Davidoff and Pall Mall have made the British business a reliable earnings generator, allowing revenue to keep growing even as total cigarette volumes continue to fall.

And Imperial Brands’ decision to increase investment in these Growth Brands and shutter hundreds of local labels across the globe should allow the firm to keep growing revenues at an excellent rate. I expect the company’s bottom line to keep expanding as product rollouts and marketing spend rises across the globe.

The right medicine

Healthcare giant GlaxoSmithKline (LSE: GSK) is also relatively cheap on paper.

A forward P/E ratio of 14.7 times falls below the forward blue-chip average. And City predictions of an 80p per share dividend for 2017, tallying up with Glaxo’s vowed programme for shareholder rewards, yields a stunning 4.9%.

Some would argue that these valuations match the pharma play’s high risk profile — after all, the business of drugs development is fraught with soaring capex bills and lost revenues in the event of testing setbacks or failures.

But I believe the quality of Glaxo’s R&D team, allied with its focus on fast-growing treatment areas, should ease these concerns and unlock exceptional earnings growth. Indeed, the Brentford firm has announced positive testing updates for its HIV and COPD treatments alone in recent weeks.

The number crunchers share my positive take, and expect last year’s earnings recovery to continue with a 9% rise in 2017. I reckon Glaxo is in strong shape to deliver increasingly-lucrative returns to its shareholders.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended Imperial Brands. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.