The Motley Fool

Worried about your State Pension income? Here are 2 FTSE 100 dividend stocks I’d buy today

Image source: Getty Images

With the State Pension amounting to just £8,767 per year, many retirees are likely to need a second income in older age.

Since the FTSE 100 appears to offer good value for money at the present time, with it having a dividend yield of around 4.5%, there are a number of opportunities to generate a growing passive income across the large-cap share universe.

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

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

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

With that in mind, here are two FTSE 100 stocks that could offer an improving income outlook, as well as relatively stable financial performance over the long term.

AstraZeneca

It’s been a difficult journey for pharmaceutical company AstraZeneca (LSE: AZN) over the last decade. It has seen its profitability fall heavily due to the loss of patents on key drugs, with this leading to a lack of dividend growth in recent years.

Now though, the company appears to be in a relatively strong position. It has invested heavily in its pipeline under a strategy that has sought to focus on core growth areas. This strategy is now expected to bear fruit, with the business forecast to post a rise in net profit of around 12% in the current year.

This could stimulate AstraZeneca’s dividend growth prospects, and lead to an improving income outlook for its investors. It now has a dividend yield of just 3.4%, but its potential to increase dividends at a pace that exceeds inflation could lead to a robust outlook from an income perspective.

Alongside this, the company’s defensive appeal could help it to outperform the wider FTSE 100 at a time when the prospects for the global economy remain highly uncertain.

Unilever

Unilever’s (LSE: ULVR) recent updates have shown that its current growth strategy is paying off. It has focused investment on fast-growing markets across the emerging world, with them now making up the lion’s share of its revenue. They are also the main catalyst behind the company’s growth rate, and are likely to remain so over the medium term as wages in countries such as China move higher at a rapid rate.

Like AstraZeneca, Unilever’s dividend yield is below that of the wider FTSE 100 at the present time. The consumer goods company is set to record an income return of just 2.9% in the current year. However, with its bottom line forecast to produce a gain of 10% this year and its dividend payments being covered 1.6 times by profit, the scope for a rapidly-rising dividend seems to be high.

Although Unilever may lack the defensive appeal of some of its FTSE 100 peers, its potential to enjoy above-average growth over the long run seems to be high. It has a wide range of popular brands in a number of different markets. This provides it with a wide economic moat which, alongside its growth potential, makes it an enticing income opportunity for the long term.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Peter Stephens owns shares of AstraZeneca and Unilever. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended AstraZeneca. 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.