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Two FTSE 100 dividend stocks I’d buy NOW

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As we begin November, stock market volatility is elevated. It’s not hard to see why. Covid-19, the US election, Brexit… there’s a lot of uncertainty right now.

Personally, I think this uncertainty is creating some fantastic buying opportunities for long-term investors, particularly in the dividend stock area. At present, plenty of well-established FTSE 100 companies are offering very generous yields. Here’s a look at two such dividend stocks I’d buy now.

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A FTSE 100 dividend stock with a 5% yield

One FTSE 100 dividend stock I believe looks attractive at the moment is BAE Systems (LSE: BA). Its share price has been hammered recently. A month ago, it was near 500p. In the last week however, it has dipped below 400p.

There are a few reasons BAE’s share price has tanked over the last month. One is that investors are concerned that a Joe Biden US election win could result in lower US defence spending. Another is that there’s concern that government spending on Covid-19 will reduce the funds available to defence departments.

Both concerns are valid. However, I see the share price pullback as excessive. While Biden may not be as keen on defence as Trump, he’s made it clear that, if elected, he’ll push for continued military modernisation, including efforts to upgrade technology, strengthen cybersecurity, and develop drones and other autonomous vehicles.

And I don’t think defence spending in other countries is going to fall off a cliff. Given the high level of geopolitical tension worldwide, governments can’t afford to completely ignore defence.

It’s worth pointing out that only a few months ago, BAE’s chairman bought a ton of shares in the company at around the 480p mark. This suggests he thought there was value at that price. Today, the shares are much cheaper.

BAE is forecast to pay about 23p per share in dividends for this year. At the current share price, that equates to a yield of about 5.2%. The FTSE 100 stock’s forward-looking P/E ratio is about 10. All things considered, I see a lot of value here.

A dividend yield that’s hard to ignore

Another FTSE 100 dividend stock I’d snap up now is pharmaceutical giant GlaxoSmithKline (LSE: GSK). Like BAE, it’s underperformed recently. Over the last three months, its share price has fallen by about 10%. I think this share price weakness has created a great buying opportunity for dividend investors.

Glaxo’s third-quarter results, issued on 28 October, weren’t brilliant. For the period, turnover was down 3% at constant exchange rates while adjusted earnings per share were up just 1%. However, I’m convinced the long-term story here remains attractive.

In the long run, the company should benefit from both the world’s ageing population and increased healthcare spending in emerging economies. Meanwhile, by splitting up its business into two separate companies, it should create value for shareholders.

GSK is forecast to pay out 80p per share to investors this year. At the current share price, that equates to a dividend yield of 5.7%. In today’s low-interest-rate environment, I think that’s hard to ignore. The stock’s forward-looking P/E ratio is a very undemanding 11.7. Putting this all together, I see this FTSE 100 dividend stock as a buy right now.

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Edward Sheldon owns shares in BAE Systems and GlaxoSmithKline. The Motley Fool UK has recommended GlaxoSmithKline. 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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