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Have £1,000 to invest? Here are two FTSE 100 dividend stocks to consider

Despite the fact the FTSE 100 is at a relatively high level at present, there is still plenty of value to be found within the index, especially if you’re a dividend investor. Here’s a look at two FTSE 100 dividend stocks that I like the look of right now.

Aviva

Insurance and investment specialist Aviva (LSE: AV) offers strong value at the moment. The company has had its problems in the past, but it looks as though the turnaround strategy that it implemented a few years back is now paying off. Today, Aviva is a leaner, stronger business than it was in the past, with the group now generating significant cash flow. According to Chief Executive Mark Wilson, the firm now expects “good, sustainable growth” from all its businesses.

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Yet despite the company’s turnaround, it still trades at a bargain-basement valuation. With earnings of 57p per share expected this year, the stock is trading at a forward-looking P/E of just 8.8. When you consider that the median forward P/E across the FTSE 100 is 14.3, Aviva certainly looks cheap on a relative basis.

From a dividend investing perspective, it offers considerable appeal. Last year, the group rewarded investors with a dividend payout of 27.4p per share which equates to a trailing yield of 5.5% at the current share price. While that’s a fantastic yield in today’s low-interest-rate environment, there could be even higher yields to come as City analysts expect the group to lift its dividend by 10% this year and next year.

Weighing up the bargain valuation, super yield and excellent dividend growth prospects, I think Aviva could make a fantastic long-term holding.

Whitbread

Another FTSE stock that I believe could be worth a closer look right now is hospitality giant Whitbread (LSE: WTB). While you may not be familiar with the name, there’s a good chance you know its key brands as the group owns both Costa Coffee and Premier Inn.

Whitbread has a pair of very accomplished brands in these two and the group is targeting strong growth over the next five years, both in the UK and abroad. In a recent Q1 update, the company advised that it opened 4,200 Premier Inn rooms in the last 12 months and that it has plans to open another 4,000-4,500 rooms in the year ahead.

The company is planning to split off Costa, which makes strategic sense from a shareholder point of view. The proposed demerger would see Premier Inn remain under the ownership of Whitbread, while Costa would be listed as a separate company. Whitbread’s largest shareholder, Elliott Advisors, believes that an extra £3bn of value could potentially be created by splitting off the coffee chain, and that Costa shares could receive a re-rating.

At the current share price, Whitbread trades on a forward P/E ratio of 15.1, and offers a prospective dividend yield of 2.6%. I believe these metrics offer appeal for long-term investors.

Of course, there are many other FTSE 100 stocks that could be good long-term picks. If you’re looking for investment ideas, check out the free report below. 

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Edward Sheldon owns shares in Aviva. 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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