The Motley Fool

Investing for income? 2 FTSE 100 dividend stocks I’d buy today

Image source: Getty Images.

These are challenging times if you’re investing for income. We’ve seen a rash of dividend stocks cancel their payouts recently. And there are likely to be further dividend setbacks ahead.

If you’re an income seeker, and are in the market for FTSE 100 dividend stocks, where exactly should you look? Which companies have prospects of maintaining their payouts in the near term, and growing them in the longer term? Here are two I think fit the bill.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...


Historically, some industries have coped better than others during difficult times for the economy. Utilities are one example. This means dividend stocks like the mighty National Grid (LSE: NG) and regulated water business United Utilities (LSE: UU).

Yes, the economic impact of Covid-19 is unusually acute, and the after-effects are likely to drag on for some time. But I think strong utilities like NG and UU remain good buys for anyone investing for income today.


United Utilities issued a trading update last week for its financial year ending 31 March. In a section on Covid-19, it reminded us of its strong credentials for weathering difficult economic conditions.

Management said: “Our revenues are fixed under the regulatory revenue control for the next five years, with shortfalls in any year being recoverable in later years. In addition we have a robust liquidity position extending out for 24 months, which is at the upper end of our policy range. This means that we are well protected against financial shocks that may be experienced as a result of the outbreak in the short-to-medium term.”

Dividend plans

The trading update made no change to the company’s expectation of paying a 42.6p per share dividend for its 2019/20 financial year. Nor to its dividend policy, targeting increases by CPIH inflation each year from 2019/20 through to 2024/25.

At a current share price of 898p (a 15% discount to its pre-market-crash level), the aforementioned 42.6p-per-share dividend gives a yield of 4.7%. I’d say that’s an attractive proposition, if you’re investing for income.

Strong candidate

Of course, no dividend is ever guaranteed. United Utilities said it recognises “a significant degree of uncertainty associated with how the current situation develops.” Also that the directors “will therefore continue to closely monitor our position and approach.”

However, I’d suggest these are precautionary statements. I wouldn’t read them as a softening-up of investors for a dividend suspension in the annual results in May. I rank United Utilities as a strong candidate to fulfil its dividend policy.

Another strong candidate

National Grid hasn’t issued a trading update since the spread of Covid-19. However, I believe this owner and operator of essential energy assets possesses similar qualities and strengths to United Utilities.

The group’s current dividend policy is “to aim to grow the ordinary dividend per share at least in line with the rate of UK RPI inflation each year for the foreseeable future.” Again, I think this is a FTSE 100 dividend stock in a strong position to fulfil its policy.

City analysts are expecting the company to pay an increased dividend of 48.72p per share for its financial year ending 31 March. At a current share price of 937p (a 12% discount to its pre-market-crash level), this gives a juicy yield of 5.2%.

In my view, this is another highly attractive proposition, particularly if you’re investing for income.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

G A Chester 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.