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3 FTSE 100 dividend stocks with 5%+ yields I’d buy in October

I’m not going to make any political predictions about the month ahead. But what I am going to do is highlight three FTSE 100 dividend stocks with 5%+ yields I’d like to buy in this uncertain climate.

A renewable champion?

After a long period of weakness, the SSE (LSE: SSE) share price has risen by nearly 15%, from its July lows of under 1,100p. The stock really picked up some speed on 13 September, when the energy group revealed a $500m deal to sell its retail business to rival OVO Energy.

SSE has been looking for a buyer for its energy supply business — which sells electricity and gas to consumers — for a while now. Offloading this unwanted division will leave the group free to focus on its core renewable energy and network businesses.

I think the deal is good news. Smaller, more focused businesses tend to perform better. Although this year’s planned dividend cut is a disappointment, I think it’s necessary and will leave the company better positioned to provide a sustainable payout.

Even after the cut, SSE stock will still offer a dividend yield of 6.6%, at the current share price. For income investors, I think this slimmed-down business could be worth a look.

One stock I’ve been buying

FTSE 100 advertising giant WPP (LSE: WPP) is another example of a sprawling business that’s being slimmed down and refocused. Since new boss Mark Read replaced founder Sir Martin Sorrell last year, he’s sold 44 companies and will soon have generated proceeds of £3.6bn.

Net debt is down by more than £700m and will fall further when a $3.1bn deal to sell a 60% stake in market research agency Kantar is completed later this year.

Read has avoided a dividend cut and has also promised to return $1.2bn from the Kantar sale to shareholders. My sums suggest this could deliver a one-off return of about 76p per share, or around 8% of the current share price.

In my view, Read has successfully restructured the business to place it on a sound financial footing. The next challenge he faces is to return WPP to growth. That could take longer. But in the meantime, the shares trade on a modest 10 times forecast earnings and offer a yield of 6%. I’d remain a buyer here.

The end of DIY?

Bearish investors are predicting the end of DIY, spelling trouble for B&Q owner Kingfisher (LSE: KGF). Is this fair? The rising number of younger people living in rented accommodation does suggest DIY could become less popular. However, I think investors looking at Kingfisher need to take a broader view.

Departing chief executive Veronique Laury has made good progress unifying the product ranges sold across the group’s stores in the UK and France. There are already signs that profit margins are rising as a result. Trade supplier Screwfix is also growing fast, with sales up by 10% during the first half of the year.

The Kingfisher share price has fallen by more than 30% over the last two years, leaving the stock trading on less than 10 times earnings and offering a 5.3% yield. I think that’s too cheap for a company still generating plenty of spare cash and has almost no debt.

I don’t think Brits are going to stop shopping for DIY and see Kingfisher as a contrarian buy.

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Roland Head owns shares of WPP. 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.