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Only have £1,000 to invest? This 11%-yielder is the FTSE 100 dividend stock I think that you should buy

Regular readers will know how bullish I remain on the FTSE 100’sgaggle of homebuilders.

I’ve staked my own money, as well as my reputation, on how robust their long-term earnings outlook remains, irrespective of how the Brexit saga has dented home price growth more recently (I own shares in Barratt Developments and Taylor Wimpey).

There are simply not enough homes to go around and this, exacerbated by the favourable lending environment for homebuyers, is helping sales of new-builds continue to tick higher. Persimmon (LSE: PSN), for one, recently noted that forward sales for beyond 2018 were up 9% year-on-year as of November 6, at £987m, the homebuilder being fully sold-out for the outgoing fiscal period.

Market resilience

Homebuyer appetite may not be rampant as in yesteryear, but even in the most challenging economic and political times, demand remains strong. This was illustrated in the latest mortgage approval data from UK Finance released this week, which showed the number of home loans signed off for purchases by major high street banks in October rose 3.6% on an annualised basis to 45,289.

Even in the toughest of economic landscapes people still need somewhere to live, after all. The recent lull in property price growth makes it a buyers’ market to a large extent too, and the arms race amongst Britain’s lenders is making it more and more attractive for many first-time buyers to take the plunge. Rates continue to fall and incentives like cash-back are becoming more popular as competition in the mortgage market intensifies.

As Persimmon itself noted last month: “Resilient consumer confidence and continued mortgage lender support have provided positive market conditions, with mortgage approvals for the third quarter ticking up from levels seen in the first two quarters of the year.”

That 11% yield

We heard talk about a possible housing market crash in the event of a Leave decision well before the summer 2016 Brexit referendum was held. I’m not expecting one and neither are City analysts with consensus earnings growth for Persimmon of 6% pencilled in this year and 2% in 2019.

The cliché may be lazy but it’s true: the homebuilders really are safe as houses, certainly in my opinion. A severe drop in property values remains hard to envisage, but even if one was to occur, as my Foolish colleague Alan Oscroft was quick to point out recently, the likes of Persimmon can still hurdle this problem and remain excellent profit growers.

And this means that the stocks should retain their status as exceptional dividend payers. Indeed, over at Persimmon, the number crunchers are anticipating shareholder payouts of 235p per share this year and next, resulting in a smashing 11% yield through this period.

All things considered, a forward P/E ratio of 7.7 times fails to reflect this construction star’s brilliant long-term profits outlook and suggests to me that the risks are being vastly overplayed. It’s an exceptional buy in my opinion, and that dividend yield makes it an unmissable stock to load up on today to me.

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Royston Wild owns shares of Barratt Developments and Taylor Wimpey. 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.