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2 dirt-cheap FTSE 100 dividend stocks I’d buy in an ISA today for 2020

With the FTSE 100 currently yielding over 4%, there are a wide range of large-cap income stocks that offer high potential returns.

Certainly, the prospects for the world economy in 2020 may prove to be risky. Factors such as a global trade war and political risks across major economies may hold back investor sentiment to some degree.

However, these two FTSE 100 shares appear to offer wide margins of safety and long-term growth potential. As such, they could be worth buying in a Stocks and Shares ISA today.

Imperial Brands

Despite experiencing a challenging 2019, the outlook for Imperial Brands (LSE: IMB) could be more positive than its current share price suggests. The company has an improving position within next-generation products such as e-cigarettes, with their revenue growing by around 50% in the most recent financial year.

Furthermore, the firm has a strong position within a range of tobacco markets. This could provide it with the cash flow necessary to enhance its presence in next-generation products so that it is able to deliver an increasingly sustainable growth outlook. On this front, it is aiming to become more disciplined in its goal of raising revenue from newer products that may eventually replace cigarettes.

Of course, Imperial Brands faces potential regulatory change. This could hurt its financial performance, while a new CEO may look to alter its strategy and dividend policy. However, with the stock currently offering a dividend yield of over 12%, it could have a wide margin of safety and income investing appeal. Therefore, it could be an attractive income share that is currently under-rated by investors despite the uncertain future that it faces.

BHP Group

Another FTSE 100 share that could offer income investing potential is BHP (LSE: BHP). The mining company has been able to cut unit costs by 20% in the last five years, while increasing volumes by around 10%. The end result has been an improvement in its operational and financial performance that could strengthen its position across a range of commodities.

BHP will have a new CEO in position at the start of 2020. As with any business, this could mean there is a shift in strategy. However, with the company having a wide range of operations and a strong asset base, it appears to be in a solid position to capitalise on a forecast improvement in global GDP growth in 2020.

The company currently has a dividend yield of around 6%. Clearly, the nature of its business means that its shareholder payouts are subject to sudden change should its operating environment deteriorate. However, with the company having a solid track record of performance during a range of economic conditions, it could produce impressive total returns in the coming years. As such, now could be the right time to buy a slice of the business for the long term.

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Peter Stephens owns shares of Imperial Brands. The Motley Fool UK has recommended Imperial Brands. 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.