Today I’m running the rule over three big-yielding FTSE 100 shares. Could these be some of the best dividend stocks to buy for my portfolio right now?
A dividend powerhouse
I think National Grid (LSE: NG) could be a perfect dividend stock for these uncertain times. Rocketing inflation and the ongoing public health emergency threaten to derail the global economy. This means the profits, and by extension dividends, at stacks of cyclical UK shares could come under the cosh.
This isn’t something that National Grid needs to worry about. The service it provides to keep Britain’s pylons and power lines in good working order remains essential at all points of the economic cycle. The sort of earnings stability that this brings gives the company the freedom to pay market-beating dividends to its shareholders.
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National Grid isn’t totally without risk, of course. Keeping the electricity grid working is expensive business and this can have a big impact on profits. However, I think this risk is offset by the comfort that its ultra-defensive operations bring. Today the power play carries a decent 5.4% forward dividend yield.
Even bigger dividends!
Vodafone Group (LSE: VOD) is another FTSE 100 firm carrying huge dividend yields. At 7.1%, this smashes the broader index’s forward average of 3.5%. The telecoms titan is a cash machine with a long track record of paying big dividends. This makes it a great buy for a dividend-hungry investor like me.
Competition is intense in Vodafone’s key European markets. Rising wealth levels in its African emerging markets means that the race for customers is heating up there, too. But I feel that Vodafone has the brand power and the financial clout to counterbalance this problem. For example, it is heavily investing in 5G to capitalise on this fast-growing mobile network. It now offers the service in almost 250 cities globally.
One final thing: at current prices Vodafone trades on an undemanding forward P/E ratio of 12 times. I think the share carries excellent all-round value.
9.1% dividend yields
I’d also consider buying Polymetal International (LSE: POLY) to create a well-balanced shares portfolio. Having exposure to gold is considered a good way of insuring oneself against major events that can sink broader financial markets. Gold’s surge to record highs north of $2,000 per ounce last summer, as stocks indices sunk amid the coronavirus crisis, is great evidence of this.
There’s no guarantee that gold prices will soar, of course. I believe there are good reasons why yellow metal values will rise again, like persistently strong inflation, a weakening US dollar, and geopolitical tension between the US and China. But this is by no means a guarantee and at the moment bullion demand is actually falling. The World Gold Council says that gold-backed exchange-traded funds experienced outflows of 25.5 tonnes in October.
Polymetal could experience prolonged revenues pressure should demand keep sinking. Still, it’s my belief that the miner’s share price reflects this risk. Today the FTSE 100 firm trades on a forward P/E ratio of just 8.5 times. Oh, and right now this dividend stock’s yield sits at a mighty 9.1%.
