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2 embarrassingly cheap FTSE 100 dividend stocks I’d buy today

The stock market crash means that many FTSE 100 shares now trade on relatively attractive valuations.

Indeed, even after the recent recovery in stock prices, some FTSE 100 shares still look too cheap. Their valuations suggest they offer margins of safety.

Here are two companies that appear to me to fit the bill. They may experience further uncertainty in the short term, but they seem likely to produce healthy recoveries in the long run. Therefore, buying these stocks today could help improve your financial situation in the years ahead. 

FTSE 100 dividend stock: Morrisons

The recent first-quarter update released by FTSE 100 retailer Morrisons (LSE: MRW) highlighted the financial impact that coronavirus is having on its performance.

While the crisis has thrown up some unprecedented challenges for the business, sales jumped by nearly 6% during the first quarter of the year.

Sales growth came from both the group’s bricks and mortar stores and its online operation. According to the business, it has increased its number of online delivery slots by more than 100% this year. 

Morrisons also reported that there was a significant recent increase in wholesale sales to convenience store partners during the first quarter. This further helped support overall group growth during the period. 

Unfortunately, while sales grew substantially during the first quarter, costs also grew. This caused the FTSE 100 company to review its cash return policy for the rest of the year. 

Morrisons is still planning to pay a regular dividend this year. However, it is unlikely to repeat the special dividend distributed last year. Yet even without this payout, the stock yields 4.6%. 

Therefore, with the FTSE 100 stock down around 10% since the beginning of the year, now could be an opportune moment to buy a slice of this dividend champion while it trades at a relatively low price. 

Prudential

Financial services firm Prudential (LSE: PRU) may face further uncertainty in the short term. Nonetheless, the company seems well-positioned to deliver relatively strong growth in the long run. 

After disposing of its UK business last year, the FTSE 100 company is primarily focused on Asia and the US. It is reportedly in the process of selling its US business Jackson Life. Analysts think this could be worth a substantial percentage of Prudential’s current market capitalisation.

When Prudential’s US business is gone, the corporation will be purely focused on the Asian life insurance and wealth management market. This is still a relatively undeveloped market. There are tens, and potentially hundreds, of millions of customers who will need the company’s services over the next few years. 

If Prudential can capture just a small share of this massive market, the stock could generate attractive returns over the long run. 

Despite this potential, shares in the financial services group are still off around 12% year-to-date. With a dividend yield of 2.6% on offer, now could be the time to buy a share of this growth champion for the long run. 

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Rupert Hargreaves owns shares in Prudential. The Motley Fool UK has recommended Prudential. 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.