Investors have rushed to sell FTSE 100 stocks over the past few weeks. However, some companies are now starting to look oversold.
With that in mind, here are three FTSE 100 dividend stocks, which appear to have fallen too far too fast, that I’m buying for my Stocks and Shares ISA today.
FTSE 100 income champion
Shares in FTSE 100 income champion Phoenix Group Holdings (LSE: PHNX) have fallen by around 20% over the past few weeks. It is difficult to see why.
Should you invest £1,000 in Aviva right now?
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The company is one of the largest pensions consolidators in Europe. It buys pension policies from other businesses and then manages them on behalf of retirees.
Phoenix can use its economies of scale to reduce costs and earn better returns for savers.
As the company is managing these assets with a multi-decade time horizon in mind, it is unlikely to be affected by any near-term economic uncertainty. That suggests the business is well placed to generate healthy profits for shareholders in the long run.
Management seems to agree. Over the past few weeks, managers and directors have spent nearly half a million pounds boosting their stakes in this FTSE 100 dividend champion.
With the company’s dividend yield currently standing at 7.6%, now could be a good time for income investors to follow suit.
Pensions champion
FTSE 100 dividend leader Aviva (LSE: AV) operates a similar business model to that of Phoenix.
The company manages pensions for millions of people across the UK. It also provides insurance services.
Both of these are relatively defensive businesses. While the demand for pension planning and insurance might drop in the near term, over the long term, the need for these services is only likely to expand.
Aviva is well-placed to weather the storm and come out stronger on the other side.
A few weeks ago, the organisation announced that its solvency ratio as of 13 March was 175%, even after taking into account the final dividend payment for 2019. The company had a net cash position of £2.4bn.
As such, now could be a great time to snap up a share in this FTSE 100 stalwart. The shares are currently dealing at a forward price-to-earnings (P/E) multiple of 4.7. They also offer a dividend yield of 12.4%. That seems too good to pass up in the current interest rate environment.
Global diversification
International FTSE 100 financial services company Prudential (LSE: PRU) has also seen heavy selling by investors over the past few weeks.
Earlier last week, management came out to reassure investors by saying that the organisation remains “financially resilient.” Even after the recent market turmoil, the group’s capital ratios are still well within management guidelines.
What’s more, Prudential’s international diversification gives it a level of protection against business uncertainty in the US and UK. Management is so optimistic about the company’s prospects, the group recently bought out the minority partner of its Thai joint venture.
With a dividend yield of 3.4% on offer, Prudential looks attractive as an income investment after the recent declines.
The stock is also trading at a P/E of 6.4, its lowest valuation in more than five years. That is a discount of around 30% to the rest of the financial services sector.
Considering the company’s financial strength, now might be a great time to buy this FTSE 100 growth and income champion.
