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Value investors! Could this unloved, 9%-yielding FTSE 100 dividend stock be THE buy of 2019?

It’s been a great start to 2019 for much of the FTSE 100 but unfortunately for TUI Travel (LSE: TUI) the ride hasn’t been as happy.

Its share price has actually tanked 31% in the year to date, due chiefly to a shock profit warning in early February. Released against a backdrop of disappointing economic datasets from across its European marketplace too, this mass dash for the exits can be understood to a large extent.

But could this sharp selling pressure present a great dip-buying opportunity for long-term investors? I think so. That heavy de-rating now leaves TUI dealing on a forward P/E ratio of 7.5 times, sitting some way below the generally-regarded bargain benchmark of 10 times.

Profits guidance downgraded

Let’s have a look at that terrible trading statement. In it, the package holiday giant declared its target of growing annual underlying EBITA by 10% in three years to fiscal 2020 was in tatters as it downgraded projections for the current year.

TUI said that it expects underlying earnings to flatline in the 12 months to September from the record €1.18bn achieved last year. This sharp downgrade reflected lower margins as it sought to protect bookings. The Footsie firm was punished by the summer heatwave which caused holidaymakers to book their holidays later, as well as overcapacity in the Western Mediterranean as travellers switched to other sunny climes on the continent.

A subsequent first-quarter update released exactly a month ago saw TUI’s share price sink even further. While turnover swelled 4.4% at constant currencies between October and December, underlying losses at the group galloped to €83.6m from €36.7m a year earlier. As well as those bookings issues, the impact of sterling weakness on margins sold to British customers also took a bite out of the bottom line.

… but the long-term outlook remains compelling

In days gone by I’ve lauded the travel titan’s long-term profits prospects as it expands its operations, and my opinion on this is unchanged. In the current year alone it’s set to open almost 30 new hotels and launch three cruise ships, and shareholders (and holidaymakers alike) can look forward to the business steadily opening up its range of destinations as well.

Clearly there’s a cloud hanging over TUI right now and the deteriorating economic landscape in Europe threatens to prolong this a little longer. As I said though, I would consider these risks baked into the company’s low, low share price right now, and that current levels represent an attractive buying-in for patient investors.

Moreover, I consider TUI a particularly-tasty proposition for income hunters. Thanks to City predictions of a 65p per share annual dividend this year, shareholders can enjoy a jumbo 8.4% dividend yield. And for fiscal 2020, the yield marches to 9.1% because of a projected 70.3p reward. It’s clearly not without risk, but I think that low rating and those smashing dividend yields make it one of the hottest Footsie shares to snap up today.

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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.