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2 dirt-cheap FTSE 100 dividend stocks I’d buy and hold for the long term

Saudi Arabia’s fall-out with major oil exporting rival Russia over production costs has kicked off an aggressive oil price war. Thanks to this, global stocks have plummeted even further. The FTSE 100 index was down by over 7% after opening on Monday. Long-term investors in the market should exercise caution in this market crash, without panicking, and use it as an opportunity to buying consider stocks trading on cheap valuations.

The pummelling of equity markets over the last two weeks has left investors struggling to weigh up the economic impact of Covid-19. Add to this a crash in oil prices and a major sell-off seems daunting to investors as they face the prospect of substantial losses. 

That said, here are two FTSE 100 dividend stocks that look insanely cheap to me. I think any investor with a long-term horizon would do well to consider adding them to any portfolio.

Legal & General

Legal & General (LSE: LGEN) is a multinational financial services company based in London. The company provides a multitude of services for clients including investment management, lifetime mortgages, pensions, annuities, and life assurance.

The company’s goal is to improve lives through ‘inclusive capitalism’. Implementing this, alongside an impressive business strategy, accounts for the 30% increase in the share price from January 2019 to the beginning of 2020. The price continued to climb upwards until the outbreak of the coronavirus sent markets into correction territory.

In a recently released full-year results report, the company boasted a 12% rise in year-on-year operating profit to £2.1bn. Interestingly, while growth was spread across all divisions, the institutional retirement business delivered a particularly strong set of results.

Dividend yield is currently sitting at around 7% and has recently fluctuated between 5% and 7%. In the full-year report, the board recommended a final dividend of 12.64p per share. Full-year payment increased 7% to 17.57p.

An impressive set of results failed to stimulate any substantial increase in the company’s share price. This is primarily thanks to the current market conditions. However, with a price-to-earnings ratio of around 7.91 at the time of writing,  anyone looking to pick up a bargain and hold for the long-term would do well to consider shares in Legal & General.


Last week, Aviva (LSE: AV) posted record full-year profits. The company reported a return on equity of 14.3% and a 6% rise in operating profit to £3.2bn. This impressive set of results should provide the insurance and investment firm with momentum to continue growing over the long term.

The company lifted its dividend by 3% to 30.9p per share and now has a staggering yield of 9.74%. On top of this, a price-to-earnings ratio of 5.38 indicates that there’s certainly value to be had. What’s more, despite record operating profits, the share price barely moved.

Overall, Aviva’s strong and resilient balance sheet, designed to withstand volatility, should significantly reduce to impact of the virus on the company’s performance. 

Outstanding financial performance coupled with a sustainable and reliable business strategy can only mean one thing. I think Aviva will continue to grow steadily into the future, providing investors with an attractive dividend yield. For me, the company is a strong buy for long-term investors, especially at its current dirt-cheap price.

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Matthew Dumigan 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.