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2 FTSE 100 dividend shares yielding 8% that I’d buy today

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FTSE 100 dividend shares have been hammered by the Covid-19 lockdown and economic disruption. About 35% of the UK’s top 100 companies have reduced or stopped dividend payments entirely in 2020. This means the ones that have confirmed they will still pay out are doubly attractive to investors.

And there are two high-yield FTSE 100 dividend shares in particular that I have my eye on.

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Standard Life Aberdeen

Standard Life Aberdeen (LSE:SLA) pays a huge 8% dividend yield. To generate passive income over time there are few better options. Good, solid FTSE 100 dividend shares are few and far between at present.

In April, Standard Life reassured investors it would continue with its final dividend payment for the year. It will cost the fund manager in the region of £300m, but it will cheer income seekers hungry for high-paying FTSE 100 shares.

CEO Keith Skeoch said at the recent AGM that despite the crash Standard Life Aberdeen actually had a positive net inflow to its funds. With weaker companies we would expect the opposite, as nervous investors pull cash from risky investments. He added that assets under management stood at £490bn. These figures suggest SLA is holding up nicely despite volatile markets.

The response from clients and customers has been considered,” Skeoch said.

More than a million private investors have positions in Standard Life. And new money coming in will aid the Standard Life’s strong balance sheet.

Some investors might be put off by a relatively high trailing price-to-earnings ratio of 27. At first glance this seems to make the shares very expensive. But look to forward P/E instead and the number comes down to 17.5 times earnings, which is about average for the FTSE 100.

To me, that says that SLA has the market’s confidence for the long term.

Cheap FTSE 100 dividend shares

A much more affordable FTSE 100 dividend share is Legal & General (LSE:LGEN). As of late May 2020, it is trading on a P/E ratio of just 6.5. In the depths of the mid-March stock market crash — the worst of its kind since 1987 — Legal & General’s share price dived to an eight-year low at 138p.

With hopes for lockdown easing buoying share prices across the board, the LGEN share price is in recovery too. Optimism for financial stability in the second half of 2020 means the share price is beginning to rise from the doldrums. As of 27 May, the share price is holding north of 200p.

And with a yield of 8.5% it remains one of the highest-paying FTSE 100 dividend shares available today. By committing to pay out £753m to shareholders, it made a strong commitment that has buoyed investor confidence.

Legal & General has also made a couple of very sensible moves, in my view. It took advantage of “favourable conditions” — extremely low interest rates — to issue £500m of very cheap debt. This will give the company the opportunity to fund acquisitions that in normal times would be far too expensive.

In annuouncing the fundraise CEO Nigel Wilson said the business “remains robust despite tremendous volatility and disruption. Our current strength underpins our future focus“.

I honestly believe the choices you make right now will make you the most profit of your investing life. Some investors have waited decades for prices to be this low. Don’t miss your chance.

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Tom Rodgers has shares in Legal & General. 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.

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