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Forget the Cash ISA! These 2 FTSE 100 income champions yield 6%!

According to my research, the best flexible Cash ISA available on the market at the moment offers an interest rate of just under 1.4%.

However, around a third of the FTSE 100 constituents currently support a dividend yield of more than 5%.

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So, if you are seeking extra income, I think this is where you should be looking.

Special returns

One of my favourite FTSE 100 dividend stocks is the insurance group Admiral (LSE: ADM). Insurance can be a highly profitable business if done right, and Admiral seems to be doing just that.

Over the past six years, the company’s net profit has grown at a compound annual rate of 6% as it has steadily increased its market share of the UK car and home insurance market.

Management has also been investing in the group’s international divisions to complement growth at home. These businesses are not yet profitable, but they could be a great growth channel for Admiral in future years.

The insurer has also recently launched a loans business, where initial growth has been promising.

All of these efforts should help the company grow its distribution to shareholders in the years ahead. Historically, Admiral has returned virtually all of its earnings to shareholders through a combination of regular and special dividends.

City analysts expect this trend to continue. They’ve pencilled in a dividend yield of 6% for 2019 and 6.1% for 2020. While the stock does look slightly expensive – it is currently changing hand at a forward price-to-earnings ratio of 16.5 times – I think this is a price worth paying to gain access to Admiral’s market-beating dividend yield.

Cheap income

Another FTSE 100 income stock that I think you should consider instead of a Cash ISA is the UK’s largest free-to-air broadcaster, ITV (LSE: ITV).

Investors have been selling shares in ITV for the past two years on growth concerns, but, so far, the company has managed to surpass expectations. For example, in a trading update published last week, the firm informed investors that advertising revenue came in at the top end of the range in the third quarter, surpassing pessimistic City expectations, which were calling for a year-on-year decline.

This growth should help underpin the company’s dividend. At the time of writing the stock supports a dividend yield of 5.9%, rising to 6% next year. The distribution is covered 1.6 times by earnings per share, which leaves plenty of headroom if earnings should fall further.

As well as this attractive level of income, shares in ITV are dealing at a highly attractive forward earnings multiple of just 10.5. I believe this multiple fails to take into account the group’s strong competitive position in the UK’s media market and the value of its online business. Online revenues expanded by around 23% in the third quarter.

The market seems to be overlooking this business, but I think that is a mistake. With revenues growing at 23% per annum, it won’t be long before this becomes a major part of the business in my opinion. 

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Rupert Hargreaves owns shares in Admiral Group and ITV. The Motley Fool UK has recommended Admiral Group and 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.