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3 FTSE 100 dividend stocks with yields over 6% I’d buy today

The FTSE 100 achieved one of its best performances on record last year. However, even after this, there are still some pockets of value in the index, especially for income seekers.

With that in mind, here are three FTSE 100 dividend stocks with yields of more than 6% that appear undervalued to me.

HSBC Holdings

One of the largest companies in the FTSE 100, HSBC (LSE: HSBA) has been under pressure over the past 12 months. Civil unrest in the bank’s home region, Hong Kong, has hit growth, and it does not look as if this disruption is going to come to an end any time soon.

Further, HSBC is struggling with low interest rates around the world. With rates low, the bank can charge customers so much to borrow, which hurts profitability.

Still, it seems to be coping well with these headwinds. It is cutting costs to stay competitive, and HSBC’s global footprint means that it can offer customers comprehensive services its competitors cannot.

Management is planning to unveil a new growth strategy alongside full-year results in February. In the meantime, investors can pick up a yield of 6.6% from the stock. As the payout is covered 1.4 times by earnings per share, it looks quite safe for the time being.

M&G

It is starting to become clear that shares in M&G (LSE: MNG) were deeply undervalued when they came to the market in October last year.

Since the company’s spin-off, the stock has risen by more than a quarter, and it looks as if this is only just the beginning.

It appears that investors are betting on a better than expected performance from the company when it reports its maiden results.

Indeed, shares in M&G are currently dealing at a forward price-to-earnings (P/E) ratio of 6.6. That’s compared to its sector average of 14.2.

Moreover, the stock will yield 6.1% this year, according to analysts. Based on these figures, it seems as if the shares offer a wide margin of safety at current levels.

As such, if you’re looking for cheap income, it might be worth snapping up shares in this global asset manager. Considering the stock’s performance over the past three months, it does not look as if it will remain undervalued for long.

Standard Life Aberdeen

Recent trading updates from Standard Life Aberdeen (LSE: SLA) imply that this business is struggling. The company is suffering from rising outflows from its investment funds.

Investors are deserting Standard Life’s offerings in favour of cheaper passive funds. This trend has been gathering pace for some time, and it’s impacting all asset managers.

However, there’s more to Standard than the group’s core asset management business. It also owns stakes in insurance companies around the world. These investments could be worth substantially more than their value on the firm’s balance sheet.

This is where the value lies. As such, it seems as if Standard Life offers value at current levels. The stock is trading at a price-to-book (P/B) ratio of just under one, compared to the market average of 1.4.

Moreover, the stock offers a dividend yield of 6.8%. So, it seems as if the share offers the potential for both income and capital growth at current levels.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended HSBC Holdings. 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.