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2 FTSE 100 dividend shares I’d buy for my ISA

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The promise of monster dividends stretching long into the future makes Vodafone Group (LSE: VOD) a brilliant pick for your ISA before the upcoming investment deadline.

City analysts are expecting the telecoms master to shell out a 15 euro cents per share dividend in the year to March 2018, up from 14.77 cents last year and helped by a 25% earnings rise. As a consequence, share pickers can lap up a gigantic 6.5% yield.

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And the good news carries on. In fiscal 2019, for which a 10% profits advance is forecast, Vodafone is predicted to pay a 15.2 cent reward. This pushes the yield to an even better 6.6%.

Some investors may still baulk at the Footsie play’s giant forward P/E ratio of 22.7 times. But look a little closer and the business could actually be considered decent value relative to its predicted growth trajectory, Vodafone rocking up with a sub-1 PEG multiple of 0.9.

The FTSE 100 is in great shape to keep reporting strong profits growth beyond the medium term too. Regulatory issues and problems surrounding phone sales in the UK have hampered performance in Europe more recently. But with the business having invested shedloads on improving its network in recent years, it is well placed to cotton on to improving economic conditions here.

Meanwhile, Vodafone is also continuing to reap the fruits of surging mobile demand in emerging markets as personal affluence levels grow. Indeed, during October-December, organic service revenues from the Africa, Middle East and Asia Pacific (AMAP) region jumped 6.8%, up from 6.2% in the prior quarter.

I am confident its strong profits outlook and formidable cash flows should keep dividends growing at a steady rate.

Diversified demon

Another hot last-minute pick for ISA investors is Bunzl (LSE: BNZL). The support services play may not pack the sort of inflation-mashing dividends of those over at Vodafone. But for those seeking dependable payout growth year after year it is impossible to knock it. After all, Bunzl has raised dividends for the last 25 consecutive years.

The company has its fingers in many pies. It supplies a wide range of services spanning many industries, giving it exceptional profits protection should weakness occur in one or two segments.

What’s more, Bunzl also carries splendid geographical diversification which gives earnings visibility that extra little boost, an essential characteristic of course for those seeking reliable dividend increases. And its aggressive approach to M&A (it spent a record £616m on acquisitions last year alone) is constantly building the foundations for sterling shareholder returns in the future.

Earnings at Bunzl are expected to spin 4% higher in both 2018 and 2019, providing a sound base for more dividend expansion.

Last year’s 46p per share payout is predicted to edge to 49.2p in the current period and again to 51.8p in 2019. The resultant yields stand at 2.4% and 2.5%. Again, these may not be the biggest on the market but they are pretty well covered by anticipated earnings, at 2.5 times through to the close of next year.

At current prices Bunzl changes hands on a forward P/E multiple of 16.5 times. That is far too cheap for a share with as stunning a growth and dividend record as this, in my opinion.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

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