The Motley Fool

The FTSE 100 dividend shares I’d buy and hold forever

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.

Businessman standing in front of screen
Image source: Getty Images.

As I type, Reckitt Benckiser (LSE: RB) is tipping towards fresh multi-year lows on Monday, a 2% decline taking the household goods giant to levels not seen since the summer of 2015.

In total. the maker of Nurofen painkillers and Veet hair remover has seen its share price drop 25% over the past year and, as difficult market conditions could persist for some time longer, I would not rule out further share price weakness.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Reckitt Benckiser’s latest trading statement last week hasn’t exactly filled me with confidence as troubles persist in its key markets, and the forecast-missing first quarter hasn’t exactly improved investor sentiment either.

In its Europe and Australia/New Zealand trading ops, the FTSE 100 business saw like-for-like aggregated revenues drop 1% from a year earlier during January-March, the company advising of “mixed” performances across the region and in particular weak demand for its Scholl footcare products.

While like-for-like growth in North America stood at a robust 6%, Reckitt Benckiser warned that performance further out will not be as impressive, in part because of the impact of rising competition for its Mucinex cold and flu medicine lines.

Powerbrands delivering the goods

In cheerier news, the brilliant sales opportunities of its emerging markets was laid bare by news that like-for-like sales across these growth markets rose 4% thanks to its Dettol, Finish and Durex so-called Powerbrands rising by double-digit percentages, as did total sales in the Greater China territory.

It is Reckitt Benckiser’s huge exposure to these growth markets, plus the brilliant pricing power of its brands, that convinces me it is a stock investors can buy now and stash away in the knowledge of strong and sustained earnings growth. And ongoing innovation across its labels should keep the top line moving skywards.

These qualities are expected to keep earnings on an upward tilt in the interim, even as troubles in its European markets persist. Profits rises of 4% and 8% are forecast for 2018 and 2019 respectively, figures that also lead to predictions of further dividend growth and chunky yields of 3.1% for this year and 3.3% for next year.

A forward P/E ratio of 16.6 times sits above the accepted value watermark of 15 times or below. But I believe the strong long-term profits outlook still makes it an excellent pick at these prices.

Another FTSE 100 beauty

I also reckon weapons builder BAE Systems (LSE: BA) is a sound selection for those seeking robust returns in the years ahead.

Lumpy contract timings are a common problem in the defence sector, and this is expected to create a 2% earnings dip at the Footsie company in 2018. However, this is expected to prove a temporary setback and a 7% rebound is forecast for next year. 

BAE Systems currently deals on a forward P/E multiple of 14.1 times and I consider this a bargain given the broadly-stable outlook for Western defence expenditure, not to mention the firm’s growing influence in emerging markets. And the broad range of its solutions (from cyberspace to submarines) provides earnings with that little extra visibility.

With dividend yields also standing at a robust 3.7% and 3.9% for 2018 and 2019 respectively, I reckon the arms giant is a great buy. As the world becomes less stable in the face of rising terrorist threats and increasing geopolitical instability, demand for BAE Systems’ products is unlikley to go away any time soon.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.