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Build a second income stream with these 2 terrific FTSE 100 dividend stocks

I’ve spent a long time eulogising about Mondi (LSE: MNDI) down the years, but it’s quite possible that the packaging giant’s outlook is stronger now than it has been for a very, very long time.

I’ve spoken about the brilliant progress it is making to expand its facilities across Europe and Russia. I’ve discussed its improving opportunities to pass hefty input costs on to its clients. I’ve mentioned the growing supply shortage in the packaging market that Mondi is in great shape to capitalise on now and well into the next decade at least. And I’ve described how its ambitious approach to acquisitions should give earnings that little extra kick up the backside too.

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All of these positive factors were highlighted in the Footsie firm’s latest trading statement this month, an update in which it advised that revenues rose 4% during January-June to €3.73bn, and underlying operating profit jumped 25% to €630m.

Mondi’s forward P/E ratio of 13.9 times is far too cheap in light of these qualities. However, they are not the only reasons to invest today.

Dividend dynamo

As I alluded to last time out, Mondi’s excellent record of earnings growth has allowed dividends to swell at quite a rate, and to culminate in a maiden special dividend that was forked out in 2017.

Needless to say the company’s bright profits picture bodes well for later dividends — City forecasters are anticipating bottom-line increases of 15% in 2018 and 6% in 2019.

Current Square Mile forecasts are suggestive of a 72 cent payment this year, up from 2017’s 62 cent reward. And another significant dividend rise to 76 cents is predicted for 2019.

Subsequent yields of 3% and 3.2% respectively are healthy, but admittedly not game-changers. However, given that demand for Mondi’s products is ripping higher and likely to continue doing so, it looks as if shareholder payouts are only heading one way: to the stars.

Indeed, the rate at which the company is already raising them could help investors to build a considerable second income stream.

5% yields!

If you’re on the lookout for jumbo yields now, though, GlaxoSmithKline (LSE: GSK) should be of interest to you.

Sure, the pharmaceuticals colossus hasn’t been raising dividends like Mondi in recent times. Heck, due to the patent losses that have hampered earnings growth, allied with the huge costs associated with its operations, GlaxoSmithKline has been forced to keep the payout locked at 80p per share for the past several years.

City analysts are expecting dividends to remain flat through to the end of 2019 at least. There are two things to remember, though. As I said, yields are considerable, standing at 5% through to this period.

And secondly, earnings are expected to flip higher again from next year as its catalogue of new, market-leading products lights a fire under the top line, meaning that dividends should begin rising again sooner rather than later.

At its current share price, GlaxoSmithKline deals on a forward P/E ratio of 14.6 times. This is far too cheap in my opinion given the size (and quality) of its product pipeline, which I am confident should blast both profits and dividends skywards again over the next few years.

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

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

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