Even an uncertain economic landscape isn’t damaging my appetite for FTSE 100 dividend stocks.
This is because there are many top income shares out there that could thrive even as inflation soars. Here are three Footsie heroes I’d buy for my portfolio today.
Admiral Group
Price: £22.50 per share
Dividend yield: 7.8%
I think Admiral Group could be a perfect dividend stock for me to buy in these tough times. Broader consumer spending looks set to remain under pressure as the cost of living crisis worsens. But motor insurance is a legal requirement and therefore not something that people will stop buying in worrying numbers.
I like Admiral in particular because of the strength of its brands. The company commands an industry-leading 14% of the market — as personal finance website NimbleFins notes — and was only one of a few insurers to grow its book in 2021.
Insurers like Admiral do face a threat in the form of claims-related inflation. But all things considered, I think it still remains one of the best safe-haven dividend stocks I could buy right now.
National Grid
Price: £11.30 per share
Dividend yield: 4.8%
Firms that operate in highly regulated industries like energy provision face constant regulatory threat. Take National Grid (LSE: NG), for instance. The threat of nationalisation is an ever-present that investors need to deal with. A government decision to bring the firm’s Electricity System Operator division back into public hands last month illustrates the point perfectly.
Still, right now I think the pros of owning National Grid shares outweigh the risks. I like the essential nature of its services. Power demand remains pretty stable at all points of the economic cycle. This provides the FTSE 100 firm with the financial means and the confidence to pay big dividends, whatever happens.
I also like National Grid because of its monopoly on Britain’s electricity network. This gives an added layer of security to profits by removing competitive dangers.
SSE
Price: £18.10 per share
Dividend yield: 5%
Electricity generator SSE (LSE: SSE) faces the same regulatory peril as National Grid. What’s more, as a major renewable energy producing stock, it faces the problem of revenues disappointment when the sun doesn’t shine and the wind fails to blow.
However, as someone who believes in the investment potential of renewable energy, SSE is near the top of my shopping list. The growing popularity of responsible investing could propel SSE’s share much higher in the years ahead.
According to Hargreaves Lansdown, inflows in responsible investment flows leapt 28% between March and April to a whopping £1.2bn. This is a trend I expect to endure as concerns over the climate increase and interest in renewable energy stocks in particular takes off.
Meanwhile, SSE’s defensive operations — like those of National Grid — make it a great dividend stock for me to buy for these uncertain times.