The Motley Fool

Forget the Santander share price! I’d buy this FTSE 100 dividend champion

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

View of Canary Wharf
Image source: Getty Images.

The Santander (LSE: BNC) share price has been under immense pressure this year. Shares in the Spanish banking giant have declined by as much as 44% year-to-date, excluding dividends.

It’s easy to see why investor sentiment towards the lender has soured over the past few months. The coronavirus crisis has ignited one of the most significant economic slumps in history.

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...

At this stage, it’s impossible to tell how much of an impact this will have on the European banking industry and how quickly the economy will recover in the months and years ahead. 

As such, there could be further pain ahead for the Santander share price. 

Santander share price under pressure 

Some banks around the world have reported a spike in loan losses over the past few months as the coronavirus crisis has wreaked havoc on the global economy. These lenders had to write off tens of billions of pounds in assets as a result. 

The Spanish banking giant is likely to face the same fate, which could have a substantial negative impact on the Santander share price. 

What’s more, the lender may also struggle to return to growth in the years ahead. Before the crisis, Santander was already struggling. Low interest rates have steadily eroded the group’s profit margins over the past decade, and its costs have remained stubbornly high. Unfortunately, interest rates have only fallen further over the past six months. This may make it harder for the Santander share price to recover when the crisis is over.

On the other hand, FTSE 100 dividend champion Admiral (LSE: ADM) appears to have a bright future.

Unlike Santander, the insurance giant doesn’t need high interest rates to make a profit. Moreover, the organisation is built around an online business model, so its costs have always been much lower. 

Avoiding the worst 

Admiral also seems to have been relatively unaffected by the coronavirus crisis. Its customers have been driving less, which means insurance claims have dropped. This may help the company report a better than expected trading result for 2020.

Considering the company’s advantages, it’s no surprise Admiral has outperformed the Santander share price this year. Shares in the group are changing hands at roughly the same level they started the year. 

And, unlike the Santander share price, Admiral also continues to offer a dividend for its investors. The payout for the full year is expected to yield somewhere in the range of 4-5%. 

As such, now would be a great time to sell the Santander share price and buy Admiral instead. Not only does the insurance group offer the potential for higher profit growth in the years ahead, but it also continues to pay investors an extremely attractive dividend.

As the outlook for the Santander share price continues to deteriorate, Admiral may be the better investment for the long term. 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

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

Renowned stock-picker Mark Rogers and his 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 click below to discover how you can take advantage of this.