2 FTSE 100 dividend growth stocks I’d buy in a Stocks and Shares ISA today

These two FTSE 100 (INDEXFTSE:UKX) stocks could offer improving income investing prospects in my opinion.

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Although the world economy may face an uncertain period at the present time, a number of FTSE 100 stocks offer increasing levels of profitability over the medium term.

This could lead to them paying higher dividends. This may not only boost their income investing prospects, but also increase demand among investors as they price-in improving financial prospects.

With that in mind, here are two FTSE 100 stocks that offer dividend growth potential. While they may not be among the highest-yielding shares in the index, they could generate impressive total returns.

Intertek

‘Total Quality Assurance’ provider Intertek (LSE: ITRK) released a trading statement on Thursday. Revenue in the first four months of 2019 increased by 5.3% to £924.3m, with it recording growth across its various segments. It has been able to maintain its operational discipline on margin improvement and cash conversion, with it being on target to meet previous guidance for the full year.

Although the stock currently has a dividend yield of just 2.1%, it has an excellent track record of dividend growth. For example, over the last four years it has increased dividends per share at an annualised rate of 19%. Despite this rapid rate of growth, dividends are set to be covered over twice by net profit in the current year. This suggests that there could be further growth ahead over the medium term.

With Intertek’s bottom line expected to rise by over 8% in the current year, it seems to be performing well. This could translate into a rising share price, as well as further dividend growth that may produce a high yield for holders of the shares over the coming years. As a result, the stock could be worth buying today for the long term.

Standard Chartered

Also offering the potential to deliver impressive dividend growth is emerging markets-focused bank Standard Chartered (LSE: STAN). The company is expected to increase dividends per share at an annualised rate of 26% over the next two financial years. This puts it on a forward yield of 3.6%. With dividends due to be covered 2.7 times by profit, so there could be scope for further fast-paced growth in shareholder payouts over the coming years.

Clearly, Standard Chartered has experienced a difficult period. Its performance has been held back by regulatory risks, while the uncertain outlook for the world economy could hurt its future business performance.

However, with the stock appearing to offer a wide margin of safety, its risk/reward ratio could be appealing. It trades on a price-to-earnings growth (PEG) ratio of just 0.5, which indicates that its shares could be undervalued given their growth prospects.

With what appears to be a sound strategy, low valuation and improving dividend growth outlook, the company could offer an impressive total return relative to the wider FTSE 100 over the long run. As such, now could be the right time to buy it after a difficult period.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Standard Chartered. The Motley Fool UK has recommended Intertek and Standard Chartered. 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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