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Have £1k to invest? I’d buy these 5%+ FTSE 100 dividend stocks for my ISA right now

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Buying unpopular shares is never an easy task. There are usually risks surrounding them that could mean there are further declines ahead in their valuations.

However, over the long term there is often scope for recovery. And with falling share prices often come higher yields that can prove to be highly attractive for income-seeking investors.

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With that in mind, here are two FTSE 100 shares that could deliver high income returns in the long run following their recent declines in price.

ITV

ITV’s (LSE: ITV) transformation towards being a digital entertainment company appears to be making encouraging progress, according to the company’s most recent results. They showed a rise in online revenue of 18%, which suggests that there may be growth opportunities ahead for the business.

Clearly, as a cyclical business ITV is likely to struggle to produce strong growth while the UK’s economic outlook is uncertain. However, with the company set to reduce its overall costs by £60m in the next three years and it increasing its investment in online growth opportunities, it could become a stronger and more diverse business over the long run.

As the company’s share price has been under pressure in response to its modest near-term growth outlook, ITV now offers a dividend yield of 6.4%. Since it is covered 1.6 times by net profit, its dividend appears to be sustainable at its current level. This could mean that while the company’s share price and dividend growth rate are somewhat disappointing in the short run, its long-term income investing appeal is high.

Therefore, investors who are able to withstand what could prove to be a period of change and risk for the business may ultimately be able to benefit from relatively high rewards.

BHP

The 17% fall in the share price of mining company BHP (LSE: BHP) over the last three months is perhaps unsurprising given the uncertain outlook for the world economy. During that time, the global trade war has continued to intensify, while there have been concerns regarding the growth rates of countries such as China as tariffs begin to bite.

This could be bad news for the wider mining sector, as it is highly cyclical and relies on the capital investment being made by China. As such, should there be further concerns present regarding the global economic growth outlook, BHP’s shares could come under further pressure.

However, the business remains relatively robust. It has a diverse range of operations, while its balance sheet is stronger than many of its sector peers. This could mean that it is better able to overcome wider economic challenges, while a dividend yield of 7% suggests that the stock could produce high income returns. With its dividends being covered 1.5 times by net profit, they could prove to be highly sustainable over the long run.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV. 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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