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2 FTSE 100 dividend stocks I think should pay you for the rest of your life

I remain convinced that there remain few things safer than bricks and mortar right now. Buy-to-let may be off the menu for many, myself included, because of a combination of rising costs, fading tax relief and increasing regulation, but there are plenty of other ways to play the UK property sector.

Buying into the Footsie’s homebuilders is one such way to do this. Barratt Developments (LSE: BDEV) is a share that I myself own and I’m tempted to believe that it, like its peers, should continue to pay big dividends for many years to come.

Housing is one of those cyclical sectors where profits vary according to the health of the regional and/or global economy. The likes of Barratt have proved their resilience though because of the size of the UK’s homes shortage, and amidst a growing population and half-baked government plans to improve build rates, I’m certain that the business can continue to thrive.

Even the ongoing Brexit debacle has failed to stop demand for new-build sectors from marching steadily skywards. Barratt saw completion numbers up 4.1% in the six months to December, to 7,622 units, a result that pushed revenues and pre-tax profits 7.2% and 19.1% higher in the period. And with the FTSE 100 firm lauding its “high-quality land bank, strong forward sales, excellent financial position and efficient cash flow generation,” it felt confident enough to turbocharge the interim dividend by double-digit percentages again, to 9.6p per share. 

In the immediate future, City brokers are expecting profits and dividends at Barratt to keep rising, despite Brexit-related troubles, and as a consequence the business boasts an eye-popping 7.8% payout yield.

Safe as houses

Bunzl (LSE: BNZL) is another splendid ‘cyclical’ stock that’s proven its mettle in beating tough economic conditions to keep growing profits and dividends.

Shareholder payouts have grown each year for more than a quarter of a century, in fact, and latest financials in which it raised the annual dividend again convinced me that the diversified services provider can ride out the current turbulence in the world economy.

Group sales rose 9% at constant currencies to £9.1bn in 2018, with sales rising in all of its global territories, and thanks to its exceptional cash conversion, Bunzl is in great shape to pursue what it describes as an “active pipeline of acquisition opportunities” to keep bolstering its market position. The firm spent an extra £183m on M&A activity last year and has also announced another takeover in recent weeks, that of Liberty Glove & Safety to boost its existing safety product operations in its core US territory.

Once again, City analysts expect earnings growth to be spectacularly boring in 2019 (a 2% rise is forecast), but solid enough to facilitate another dividend rise. Currently a 53p per share reward is anticipated, up from 50.2p in 2018, and this yields an inflation-beating 2.2%. And as it builds its global operations organically and via M&A, I’m convinced it should continue to deliver lucrative returns long into the future.

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Royston Wild owns shares of Barratt Developments and Bunzl. 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.