The Motley Fool

2 FTSE 100 dividend stocks I’d buy for extra income today

Image source: Getty Images

Making a decision on where to invest our hard-earned cash can often be a difficult choice – with so many options out there for potential investors.

One of those options is investing in stocks and shares, with the UK’s flagship FTSE 100 index a common place for many to start and maintain their portfolios.

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...

The government has introduced a new incentive for those interested in buying company stocks, known as a Stocks and Shares ISA. These accounts allow individuals to invest up to £20,000 per year and earn tax-free profits – making returns more lucrative than they would be in a standard sharedealing account.

Investors in shares and stocks aim to increase their returns through two main methods – growth in the company’s share price and profits returned to shareholders as dividends.

Some companies will be more generous with their dividends, while others reinvest their profits in the business to help drive further profits in the long term.

Two FTSE 100 companies that I would consider buying based on current dividend yields are J Sainsbury (LSE:SBRY) and Aviva (LSE:AV).


Shares in supermarket kingpin Sainsbury’s have flopped over 2019 after a number of setbacks, most notably the failed merger with Asda which was valued at £7.3bn. 

The company recently announced a reorganisation of its portfolio of stores, with 70 Argos branches due to close along with 15 supermarkets and 40 convenience stores.

The restructuring is expected to cut Sainsbury’s debt by as much as £750m. CEO Mike Coupe aims to cut costs in an attempt to improve operating and pre-tax profits, which have declined despite consistent revenue growth.

Sainsbury’s shares offer a dividend yield of 5.3% based on their current share price of 205p, a significant income return before share price growth is even considered. After factoring that in, it trades with a current price-to-earnings ratio of less than 10. I see plenty of upside potential for the supermarket chain if its cost-cutting plans have the desired effect.

Insurance pick

Another FTSE 100 dividend favourite that I’d consider adding to my portfolio is insurance company Aviva. 

Aviva currently offers a whopper dividend of 8% based on its 375p share price, and with its highly diversified range of insurance products I think there is room for future growth there as well.

The insurer has not had the easiest time of it in the last year, with the shares down more than 20% in the last 12 months. It has not been helped by the news that the Financial Conduct Authority (FCA) is considering the introduction of a series of measures to address competition issues in the UK.

The FCA found that consumers were not getting competitive prices for their home and motor insurance policies and said it will take steps to help loyal customers avoid paying more. While good for the consumer, it may not be great news for the likes of Aviva, Direct Line, Admiral, and many others.

Despite that, Aviva has a strong balance sheet and I believe most of the bad news about the company to be priced in already. Many other FTSE 100 companies will be fretting about the potential chaos from a no-deal Brexit, but Aviva’s strong multinational presence should provide protection against that and with an 8% yield, it’s another I’d add to my portfolio or Stocks and Shares ISA.

“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!

conorcoyle has no position in any of the shares mentioned. 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.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- 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.