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£5k to invest? Here are 2 FTSE 100 dividend stocks I’d buy right now

The FTSE 100’s recent declines have thrown up some fantastic bargains for long-term investors. With that being the case, here are two FTSE 100 defensive dividend stocks that look to be attractive investments even though they have fallen in value over the past week.

AstraZeneca

Shares in global pharmaceutical giant AstraZeneca (LSE: AZN) have lost more than 10% since the middle of February. However, despite this decline, the company’s long-term fundamentals remain robust.

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The demand for healthcare around the world is only growing. An ageing population, coupled with increasing global wealth, means more people need healthcare, and more can afford to pay for it.

That’s excellent news for pharmaceutical companies. Astra will also benefit from its growth investments over the next few years. Since the middle of the decade, the company has been investing heavily in the development of new oncology drugs. 

The development of these treatments has been slow but steady. Analysts believe management’s patience will start to pay off during the next few years.

Indeed, over the next two years, analysts are forecasting an increase in net profit. It will hit $6.8bn in 2021, up from $2bn in 2018, according to current projections. These forecasts imply the business will earn $5.2 per share in 2021. That’s the highest level in at least six years.

These numbers suggest that while the market might think Astra is worth less today than it was at the beginning of last week, from a fundamental perspective, the business is still growing. As such, it now looks to be an excellent time to snap up shares in this blue-chip giant at a discount.

The stock is trading at a price-to-earnings (P/E) multiple of 20.9, at the time of writing. That suggests the shares are dealing at a PEG ratio of 0.8. A ratio of less than one implies a stock offers growth at a reasonable price.

GlaxoSmithKline

Shares in GlaxoSmithKline (LSE: GSK) also look appealing for many of the same reasons. Demand for the company’s products is only increasing and, as one of the world’s leading vaccine producers, management believes Glaxo can help the fight against COVID-19.

Still, at this point, it’s impossible to tell if Glaxo’s bottom line will benefit from its contributions to help fight the virus. Nevertheless, even without this boost, the company’s long-run growth potential is highly attractive.

Earnings per share are forecast to hit 121p for 2021. That’s up from 65p in 2014. On top of this, the stock offers a dividend yield of 5.1%. With the payout covered 1.5 times by earnings per share, it looks as if it’s secure for the foreseeable future. That’s barring any large, unforeseen adverse developments in the next few years. 

As well as its market-beating dividend yield, shares in Glaxo are also dealing at a P/E of just 13.5. That compares to the sector average of 16.5. Therefore, it looks as if the stock offers a wide margin of safety at current levels.

Overall, if you’re looking for two stocks that could be safe havens in stormy waters, you should consider adding Glaxo and Astra to your portfolio today.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended AstraZeneca. 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.