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Stock market crash bargains: I’d buy these cheap FTSE 100 dividend shares today

The stock market crash has created some terrific bargains, in my view. Although the market has rallied powerfully since March, I think there are still a number of good FTSE 100 dividend stocks on offer.

This stock could yield 8%

My first choice is FTSE 100 insurer Aviva (LSE: AV), which is a long-term holding of mine. The Aviva share price is down by about 35% so far this year, but in my view, the stock now looks seriously oversold.

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At the end of March, the company said that it only expects to see an extra £160m of claims relating to COVID-19 — an affordable amount.

At the same time, management estimates that the group held surplus cash of 372p per share in excess of regulatory requirements. This suggests to me that the current share price of 270p is a genuine bargain.

Why are the shares so cheap? The market appears to be pricing-in big losses that have not yet come to light. There is some risk of this, of course, if market conditions remain difficult. But I think Aviva is suffering from poor investor sentiment too.

The shares currently trade on less than five times 2020 forecast earnings. Although the dividend has been suspended, I think a final payout for 2020 is quite likely. And I’d expect a yield for of 6% to 8% in 2021.

I see Aviva as one of the biggest bargains of the stock market crash.

Profits are rising

Telecoms giant Vodafone Group (LSE: VOD) has been through a challenging few years, but the group now appears to be benefiting from the changes we’ve seen in recent years.

Boss Nick Read is simplifying Vodafone’s operations, improving their profitability and cash generation. Sales rose by 3% to €44,974m last year, while free cash flow rose by 12.2% to €4,949m.

Although the coronavirus lockdown has resulted in a loss of revenue from mobile roaming, Covid demand has been strong in other areas of the business, which includes broadband and mobile networks.

Vodafone’s debt still looks a little high to me, the planned sale of the group’s European network of radio masts should solve this problem. In the meantime, the stock’s 6.4% yield is covered comfortably by the group’s annual free cash flow. If you want to invest fresh cash safely during the stock market crash, this looks like a good choice to me.

A share up 30% since the stock market crashed

The stock market bottomed out on 23 March. My final pick has risen by 30% since then, but still offers a forecast dividend yield of 7%. The company in question is FTSE 100 income stalwart British American Tobacco (LSE: BATS).

Although this company (rightly) attracts criticism for the health risks attached to its products, the reality is that it’s still a very large and profitable business. Investors who are happy to own this tobacco stock can benefit from generous cash flows and big, reliable dividends.

While the number of smokers is falling each year, this seems to be a slow process. So far, BATS has been able to increase its market share and prices to keep sales fairly stable.

Last year the company generated free cash flow of £6.5bn, comfortably covering £4.6bn of dividend payments. The dividend continues to look pretty safe to me, making this a rare opportunity to lock-in a 7% yield.

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Roland Head owns shares of Aviva and British American Tobacco. 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.