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Two 10%-yielding FTSE 100 dividend stocks I’d buy today

Last week’s stock market crash saw the FTSE 100 fall to the lowest levels seen since 2011. As a result, my research suggests that there are 18 FTSE 100 stocks with forecast dividend yields of at least 10%.

To be honest, some of these payouts looked doubtful to me, even before the coronavirus outbreak. But I believe that some of these stocks now offer great value for income investors.

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I reckon that buying the right shares today should deliver years of market-beating income. In this piece I want to look at two big dividend stocks I own, starting with television group ITV (LSE: ITV).

Retune your television

The ITV share price has fallen by more than 40% so far this year and was trading at 85p at pixel time.

To be fair, this FTSE group was facing challenging conditions even before the coronavirus outbreak.  Things have now got much worse.

Travel firms are cancelling ad campaigns planned to promote this year’s summer holiday season. I suspect other advertisers will scale back their activity too. Based on the information available so far, ITV expects ad revenues to fall by 10% in April alone.

However, I think that focusing on the short-term outlook for TV advertising is missing the point. ITV is much more than just a conventional broadcaster. In 2019, the group generated 36% of all profits from programme production. Much of this content is sold to other broadcasters.

Super profits

There’s also another attraction. I mentioned that ITV was already facing challenging conditions. That’s true. But the company has remained highly profitable, despite this.

The group’s latest accounts show that ITV generated an operating margin of 16% in 2019 and earned a return on capital employed of nearly 24%. These are impressive figures that are well above the market average. They highlight the group’s historically strong cash generation.

Is the dividend safe? I think it’s hard to be certain at this time. But management says it plans to hold the payout unchanged at 8p again in 2020. At current shares prices, that would give a dividend yield of 9.4%.

On balance, I think ITV shares offer great long-term value at the moment. I’m hoping to buy more over the coming weeks.

An advertising concern

The shift online in the advertising world is also a concern for FTSE 100 ad giant WPP (LSE: WPP). The group’s recent results met with a downbeat reception when turnaround boss Mark Read said that performance would be flat, at best, in 2020.

That was before the impact of the coronavirus stepped up in Europe and the US. Being realistic, I expect WPP to report a fall in revenue and profit in 2020.

However, this shouldn’t necessarily cause any longer-term problems. Drilling down into WPP’s 2019 results tells me that the only region that didn’t report growth last year was North America. Elsewhere in the world, the group’s operations performed well.

The US market is WPP’s largest, so this remains a concern. But I think it should be fixable, given WPP’s size and presence in most key consumer markets. As with ITV, I think the bad news for WPP is already reflected in its share price.

WPP stock is now trading on less than seven times forecast earnings, with a dividend yield of around 10.5%. For patient long-term investors, I reckon this is a great opportunity to buy.

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It’s ugly out there…

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Roland Head owns shares of ITV and WPP. The Motley Fool UK has recommended 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.