The Motley Fool

I’d buy these FTSE 100 shares for their dividends

Image source: Getty Images

Soon after the coronavirus crisis began, many companies had to scrap their dividends. But over the past months, dividend shares began to resume payouts. In my view, the current situation in the markets makes dividend shares the top strategy for the next year. Let me explain why. 

The UK stock market is in a tricky place right now. Analysts and economists are still trying to figure out the disconnect between the stock markets and the economy, which has been one of the most discussed topics in the financial world this year. Although the world economy has suffered its deepest recession and is expected to shrink by 5.2% according to World Bank forecasts, stock markets have actually rallied.

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...

Generally, I would say that the most important reason for the rally is persistently low interest rates, which led to the boost in stock prices. And as long as interest rates remain low, I think dividend shares with high yields are key to building a successful portfolio right now. As such, I’m going to take a look at three FTSE 100 shares that offer a high dividend yield.

Passive income: 3 dividend shares I’d buy right now

Taking the above into consideration, here are three top UK shares with high dividend yield I’d buy right now for a passive income. 

Standard Life Aberdeen — The nearly 8% dividend yield currently offered by Standard Life Aberdeen makes this stock the perfect buy and hold option for me right now. This high dividend yield is especially an attractive return in the current low-interest-rate environment. 

This year, Standard’s shares dropped by nearly 20%, however, the investment company is starting to show good signs of recovery lately. Since late October, Standard’s shares rose by 25%, and the company’s new CEO Stephen Bird brings new hope for investors. Looking forward, Standard Life Aberdeen has recently announced that it plans to sell its Parmenion platform. In my opinion, this is good news for the company and might push the stock price higher. 

Aviva — Shares in Aviva have fallen around 24% since the start of the year. Still, in my opinion, it remains one of the best UK shares to buy right now. A month ago, I suggested that Aviva shares looked like a bargain. Since then, its shares soared from 256p on Oct 29 to 322p on Nov 29, an increase of 25%. Looking forward, I strongly believe that shares of Aviva will continue rising as it offers a high yield of 6.5%. 

British Petroleum — The oil and gas company has seen its shares lose around 45% of its value in 2020. This was quite expected given the fact the Covid-19 has paralyzed oil and gas companies. Moreover, the oil crisis in March had a huge impact on oil companies like BP. 

Still, British Petroleum pays a quarterly dividend for shareholders, and its annual yield, which stands at 6.01%, makes it one of the best dividend FTSE 100 shares. Overall, I think BP is a great bargain right now for a long-term investment. 

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

Tom Chen has no position in any of the shares mentioned. 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.

Our 6 'Best Buys Now' Shares

The renowned 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 enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.