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2 FTSE 100 dividend stocks I think are absurdly cheap right now

Good sources of passive income are not always hard to find. There’s a huge amount of long-term value out there and you don’t have to mess around with risky small-caps to get it.

These FTSE 100 dividend stocks are offering stable annual payouts above 6% right now. That’s above and beyond any benefits that come from buying at or near their 52-week lows.

On the up

The UK’s largest commercial property owner Land Securities Group (LSE:LAND) is trading just 2.5% above its 52-week low. I also think its current 6%+ dividend is secure, because of Landsec’s track record in increasing dividends since 2015, rising from 31.85p per share to 45.55p per share.

Its trailing P/E shows you’ll pay 12 times earnings for the shares, which is pretty good value. So why are they so cheap? A £123m loss in the 12 months to 31 March was mainly due to fragile retail income. But there’s more than enough value in the business to compensate.

CEO Robert Noel has made it his mission between now and 2025 to switch asset allocation back to Greater London after dabbling in retail further north. For example, he used “buoyant market conditions” to sell Scotland’s second-largest retail park in a £244m deal with HSBC.

The firm’s London assets produced a 7.3% rise in net rental income in the last 12 months with £140m of total annual rental focused in the capital. And wider plans to pull back from the regions to focus on higher payers means 65% of its portfolio of offices, shopping centres and hotels are now in London.

Noel sees the writing on the wall for bricks and mortar UK retail, saying Landsec will “continue to reduce our allocation to this market segment further over time.” Chief financial officer Martin Greenslade has also indicated LAND could quit retail parks entirely.

Best of British

Weakness in retail has dragged down the net asset value of another big FTSE 100 property owner British Land (LSE:BLND). I think this makes the shares undervalued and that’s good news for those buying now as there’s also a 6%+ dividend on the cards this year.

The value of BLND’s portfolio is over 900p per share but buying in will only cost you 483p at time of writing. That’s a 46% discount. Net gearing, or the debt-to-asset ratio, is only 25%. And the shares are priced just 4% off their 52-week low. So now could be a great time to strike.

Boss Chris Grigg has extended a huge share buy-back campaign over the past two years, spending £500m to bring the shares back in-house, indicating the company feels it’s undervalued.

Like Robert Noel, Grigg has plans to vastly reduce the firm’s retail exposure, saying “only the best quality space in the right locations [is] viable long term“. Over the next five years, Grigg will cut its retail exposure from 45% to 30%.

The development of the Canada Water regeneration site in London’s Docklands also offers massive potential for creating more value in the business. The early-stage £4bn masterplan includes 53 acres of land in a prime location and could be bigger than the redevelopment of King’s Cross. It all adds up to plenty of potential for the shares.

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Tom holds no position in the shares mentioned. The Motley Fool UK has recommended British Land Co and Landsec. 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.