The Motley Fool

The FTSE 100 dividend shares I think every portfolio should include

Image source: Getty Images.

For any sensible portfolio, dividends should be a consideration. Even if focusing on growth, having some stocks with decent yields, particularly if reinvested, can help a portfolio move in the right direction through the lean years as well as the good.

Personally I look to the FTSE 100 and FTSE 250 for my dividend shares, wanting stable blue-chips as a foundation that supports any riskier investments. Here are three stocks I have for just this reason.

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...

Royal Dutch Shell

The oil major Royal Dutch Shell (LSE: RDSB) has been a cornerstone of my portfolio for years. As it currently stands, the firm offers a dividend yield of about 6.5% — a very nice figure that comes about through some edging off in the share price rather than the company over-extending itself.

Shell has some of the most consistent dividends in the FTSE 100, including extraordinary dividends when there is cash to spare, and has seen its payouts increase almost 6% year-on-year for the past five years. It’s a stable blue-chip that, while subject to crude price fluctuations like all oil firms, has diversified and shown an ability to make sensible decisions when necessary.

Meanwhile the company has committed to a number of share buybacks and dividend increases for at least the next two years, and looking at the its financials, I agree with my fellow Fool G A Chester, there is potential for growth here as well as income.

BAE Systems

The UK giant BAE Systems (LSE: BA) offers another stable base to any portfolio. A defensive stock both by industry and in its nature as an investment, the company currently offers a dividend yield of about 4% — the lower end of what I would look for as an income stock, but solid nevertheless.

Another consistent performer in terms of dividend payouts, BAE has been able to increase dividends by about 2% year-on-year. Even with some recent gains in the share price, the stock comes in with a forward-looking P/E of about 12, making it pretty cheap for a company so well established.

HSBC Holdings

The final company I think of as a long-term solid performer, is the London-based, Asia-focused HSBC Holdings (LSE: HSBA). Having seen its price edge lower this month, the current yield stands at a very nice 6.7% — one of the highest on the FTSE 100.

HSBC has increased these dividends by an average 6% per annum for the past five years, and while banking and financial stocks are sometimes towards the more volatile end of what I consider blue-chips, HSBC has a solid brand and the finances to back it up.

As with many UK stocks at the moment, the uncertainty surrounding Brexit is a worry, but I think HSBC will be in a strong position in the long run, no matter what the outcome. Royal Dutch Shell and BAE Systems meanwhile, are also well placed to weather economic storms – exactly what I want as the backbone of a portfolio.

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...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Karl has shares in Royal Dutch Shell, BAE Systems and HSBC Holdings. The Motley Fool UK has recommended HSBC Holdings. 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.