6.7% dividend yields! 3 FTSE 100 shares to buy

These FTSE 100 shares offer some of the biggest dividend yields in the business. Here’s why I think they’re among the best UK stocks to buy right now.

| More on:

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.

Scene depicting the City of London, home of the FTSE 100

Image source: Getty Images.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’ve been searching the FTSE 100 for the best stocks to buy. And the following boast dividend yields which trash the broader 3.5% forward average currently carried British stocks. Here’s why I’d buy them today.

Why Id buy HSBC over Lloyds

Buying UK bank shares is too risky for many investors as low interest rates persist. I’ve warned of the risk this presents to the likes of Lloyds and Barclays time and again. However, HSBC Holdings (LSE: HSBA) is a FTSE 100 financial share I’d happily buy today, despite this headache.

This is because I believe HSBC’s focus on Asian emerging markets should still deliver excellent shareholder returns for the bank’s investors. Economic growth in these regions is tipped to continue outstripping GDP expansion in the West this decade. Meanwhile, the financial product market in these areas is highly underpenetrated, giving the Footsie firm plenty of opportunity to win business. I’d also buy HSBC shares on account of its 4.1% dividend yield.

Going for gold

I think Polymetal’s (LSE: POLY) another top FTSE 100 stock to buy today. As I say, central banks will likely keep their interest rates quite low for years to come, keeping inflationary concerns rumbling along in the background and supporting demand for hard currencies like gold. It’s a scenario which this particular UK mining share will be well-placed to exploit as it steadily ramps up production from its world-class Russian and Kazakh assets.

The complexities of digging for metals leaves Polymetal at risk of profit-hitting production issues and ballooning costs. But I feel these problems are baked into the company’s share price today. The business trades on a forward price-to-earnings (P/E) ratio of below 9 times. One final thing that makes it a top FTSE 100 share to buy today is its mighty 6.7% dividend yield.

Hand holding pound notes

A pharma firecracker

GlaxoSmithKline (LSE: GSK) has a long history of paying above-average dividends too. Okay, the FTSE 100 pharma giant hasn’t lifted the annual dividend for years. But the 80p per share payout it’s forked out since 2014 has still provided decent income flows for its shareholders. And City analysts are predicting an identical dividend for this year and next too, creating a mighty 5.6% forward dividend yield.

UK shares like this always carry a high level of risk as drugs development can often be bumpy. Not only can lab failures cost a fortune in lost revenues and soaring expenses, but regulators can put a torch to all that hard work by refusing approve a product.

That said, there’s several reasons I’d still buy Glaxo shares today. The Footsie firm has a great track record of getting its products signed off. The company has a packed pipeline in fast-growing therapy areas like oncology and vaccines. And demand for medical products looks set to boom as populations grow and healthcare investment in emerging markets increase.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays, GlaxoSmithKline, HSBC Holdings, and Lloyds Banking 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.

More on Investing Articles

Black father and two young daughters dancing at home
Investing Articles

1 FTSE 250 stock I own, and 1 I’d love to buy

Our writer explains why she’s eyeing up this FTSE 250 growth phenomenon, and may buy more shares in this property…

Read more »

View of Tower Bridge in Autumn
Investing Articles

The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here's one stock he'd willingly…

Read more »

Investing Articles

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »