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These FTSE 100 dividend stocks look ludicrously cheap

If you’re looking for brilliant dividend stocks on a budget then the FTSE 100 should prove to to be a happy hunting ground for you.

Heck, I’m regularly scouring the index in the quest to dig out some of the brightest blue-chip bargains out there. I’ve been at it again recently and have managed to find another couple of great Footsie income stocks carrying undemanding valuations, one of which is TUI Travel (LSE: TUI).

Still flying

Upon hearing of a Q3 profits slip last week, share investors found themselves content to sell out of the package holiday provider. I see this as a short-sighted move, however, given that adverse currency movements and air traffic control strikes in France were particularly problematic between April-June.

Broadly speaking, trading conditions remain robust for TUI. Bookings for summer 2018 are up 4% year-on-year, with 86% of the programme having already been sold. And I am confident that robust economic conditions on the continent should keep its tickets well bought, allowing it to overcome its recent trading difficulties. Indeed, the FTSE 100 firm kept full-year guidance unchanged despite the weak third quarter.

City analysts are expecting earnings at TUI to grow 9% in the year to September 2018, and for it to follow this with a 13% advance in fiscal 2019. The first cause for celebration is that this leaves the travel titan dealing on a forward P/E ratio of 13.3 times, comfortably inside value terrain of 15 times or below.

The second is that these perky projections lead to predictions of further meaty dividend expansion. Last year’s payout of 65 euro cents per share is expected to increase to 72 cents in the current period and again to 80 cents next year. Consequently TUI carries chubby yields of 4.3% and 4.8% for fiscal 2018 and 2019 respectively.

Great dividend growth

Whilst NMC Health (LSE: NMC) may not be packing the same sort of gigantic yields as TUI, the pace at which the business is lifting dividends should put it on the radar of all savvy income investors.

This is a topic which I explored last time I wrote about the private healthcare provider in June. A long history of enjoying annual profits improvements by double-digit percentages has enabled it to pursue such an expansive policy. And with City analysts predicting that earnings should keep rising at an electric rate (by 35% in 2018 and 23% in 2019, to be exact), it comes as little surprise that payouts are predicted to keep exploding.

Last year’s 13p per share reward is anticipated to move to 18.9p this year and again to 24.1p in 2019. Near-term yields of 0.5% and 0.6% might not blow your socks off, but NMC’s immediate value certainly should. Looking past a forward P/E rating of 36.6 times, a corresponding PEG reading of 1 — bang on the widely-accepted bargain benchmark — shows how cheap the healthcare star is relative to its anticipated growth trajectory.

The Footsie firm hasn’t updated the market since last time I covered it, but I fully expect upcoming results — half-year numbers are slated for August 20 — to provide its share price with fresh rocket fuel, and so now is a canny time to buy-in. NMC’s market value has already swelled 40% in the year to date.

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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.