7.2%+ yields! Are these the best dividend stocks to buy right now?

Inflation’s soaring in the UK right now. The consumer price inflation gauge has struck its highest in almost a decade, at 3.2%. Economist consensus suggests it’s going to go much higher too, as supply chain problems worsen and fuel costs soar. Predictions of 4%-plus by the end of the year are now the norm.

It’s clear UK share investors like me need to do their research to make a decent real return in this climate. With this in mind, here are what I think could be two of the best dividend stocks to buy to guard against surging prices.

7.2% dividend yields!

Glencore (LSE: GLEN) is one of the best dividend stocks to buy from the FTSE 100 right now. Not only do yields here sit at an impressive 4.7% and 7.2% for 2021 and 2022 respectively, projected dividends are covered 2.8 times and 1.9 times by anticipated earnings through this period.

These are in and around that sought-after reading of 2 times, a level that AJ Bell’s experts describe as “ideal [as] profit is double the amount the company is paying out to shareholders.”  They say that a reading of 2 times or above means a stock “can continue to invest in the business and has scope to maintain its dividend payment in a bad year.”

I think demand for Glencore’s vast range of commodities could fly as the global economy steadily recovers over the next few years. Moreover, I reckon colossal global investment in green technology could supercharge consumption of its metals and minerals and drive profits even higher.

I think the FTSE 100 firm’s a great buy for me, despite the threat posed by a possible crash in the Chinese real estate market to its profits.

One of the best insurance stocks to buy?

I also think Direct Line Insurance Group (LSE: DLG) could be one of the best stocks to buy to protect against runaway inflation. Yields here sit at an eye-popping 8.5% and 8.2% for 2021 and 2022 respectively.

Now Direct Line doesn’t have the sort of impressive dividend cover as Glencore. In fact, projected payouts are barely covered by estimated earnings. However, this FTSE 250 business has considerable financial reserves to call upon to meet these forecasted payouts.

Its strong balance sheet in fact has also encouraged Direct Line to embark on a share repurchase programme. Excellent cash generation during the first half left it with a solvency capital ratio of 195% after dividends and share buybacks, up 4% year-on-year.

I also like the company’s dividend prospects as its operations are ultra-defensive, meaning that earnings are relatively stable during good times and bad. This gives it the confidence to maintain a generous dividend policy, even when the broader economic outlook darkens.

Consumer spending on general insurance remains strong at all points of the economic cycle. And Direct Line is a market leader, thanks to its colossal brand strength. I’d buy this dividend stock, even as climate change threatens to push its costs steadily higher.