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2 FTSE 100 dividend stocks that could be ideal for retirees

If you’ve already dispensed with the work gear and are enjoying a life of retirement, then you may well be seeking shares paying big dividends now rather than later.

There are plenty of such stocks to pick across the FTSE 100. Right now I’m looking at two of them.

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Big yields

News that RSA Insurance Group’s (LSE: RSA) operating profit took a hefty whack in the first-half — this dropped 15% between January and June to £304m — doesn’t dent my bullish belief in the firm.

The insurer’s pointed reversal was down to adverse weather conditions which were £53m in excess of the five-year average. Of course such troubles are part and parcel of the industry, and with climate change leading to more and more extreme weather phenomena across the globe, the likes of RSA Insurance are susceptible to such bills sailing above historical averages.

Still, there was plenty to like in the company’s half-year release, and particularly so in Scandinavia and Canada where premiums grew on a constant currencies basis during the period, despite tough economic conditions. And with the firm getting a grip on costs too, with total written costs falling 2% in the first six months of 2018, it’s no surprise that City analysts expect earnings to keep rattling higher.

Rises of 8% and 13% are forecast for 2018 and 2019 respectively. One subsequent cause for cheer is that RSA Insurance changes hands on a cheap forward P/E ratio of 13.4 times, inside the accepted value territory of 15 times or below. The second cause is that these estimates lead to expectations of additional dividend expansion.

Last year’s 19.6p per share reward is predicted to rise to 27p in the current period, and to jump again to 33.7p in 2019. This means that yields sit at an enormous 4.2% and 5.3% respectively. I am convinced that its improving balance sheet and solid earnings picture leave these estimates looking pretty rock solid.

Even bigger yields!

Vodafone Group (LSE: VOD) is another Footsie income share worthy of a place in any retiree’s investment portfolio.

The telecoms titan has long offered up market-smashing yields thanks to its tremendous cash generation. So even as earnings have fluctuated, the business has still had the strength to raise shareholder rewards.

In the 12 months to March 2018, free cash flow boomed 22% to more than €4bn. As a consequence, even though profits are anticipated to slip 8% in fiscal 2019, the City is predicting that last year’s 15.07 euro cents per share dividend will likely be maintained through to the end of next year, meaning Vodafone’s forward yield registers at 7.4%.

Those looking for value may not approve of Vodafone’s elevated prospective P/E ratio of 18.8 times. This wouldn’t deter me from splashing the cash, though, given the company’s brilliant prospects in emerging markets, a quality that is expected to put profits back on an upward path with a 14% rise in fiscal 2020. Besides, those giant yields help to take the edge off.

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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.