I’m on the hunt for top FTSE 100 dividend shares to add to my investment portfolio. Here are two I think would make great long-term investments.
7.5% dividend yields!
I already own FTSE 100 dividend shares Barratt Developments and Taylor Wimpey in my Stocks and Shares ISA. And I think Persimmon (LSE: PSN) would make another great addition to my shares portfolio. Its 7.5% forward dividend yield actually smashes the readings which those other income stocks currently offer.
Demand for freshly-built homes is soaring, thanks to a blend of terrifically-cheap mortgage products and massive government purchase incentives.
I think low Bank of England interest rates are here to stay for some time yet to help the economic recovery following Covid-19. And the British government is doubling-down on its vote-winning strategy of helping first-time buyers to get on the property ladder.
Just yesterday, the First Homes project was launched, a programme that will help key workers and local people buy newbuild homes at whopping discounts of up to 50%.
I think UK housebuilding shares like Persimmon are great buys, despite the threat of rising costs. Latest data showed cost inflation across the construction industry struck all-time highs in May.
UK construction ? PMI for May reveals a familiar story. Rapid growth in output and orders but accelerating inflationary pressures. Output hits 64.2 (highest since Sep-14). New orders hit a record high 68.8. But input cost inflation hits 94.7!! ⚠️ a record high.
Richard Ramsey (@Ramseconomics) June 4, 2021
A FTSE 100 dividend share to hold forever
I believe Polymetal International (LSE: POLY) is another FTSE 100 dividend share that’s worth serious attention. It’s not just because the gold miner carries a mighty 8.7% dividend yield for 2021. The company looks cheap from an earnings perspective too. Today, it trades bang on the bargain-benchmark prospective price-to-earnings (P/E) ratio of 10 times.
Prices of precious metals sank sharply in the first few months of the year as Covid-19 vaccines improved investor mood over the economic recovery. But gold prices have started rising again and, at $1,870 per ounce, are less than $200 below last summer’s record highs again.
I think they could keep rising too as fears over global inflation rise, the US dollar continues to fall (a change that makes it more cost-effective to buy dollar-denominated assets like gold) and a stream of new coronavirus variants emerge.
There’s no guarantee Polymetal’s profits will soar if gold prices jump to new peaks. The company has a history of impressing on the production front in recent times. Though the complex and unpredictable nature of metals mining means that costly problems are an ever-present threat.
Still, I think having exposure to gold is always a good idea for protection against sudden economic downturns, as last year’s surge to record highs shows. And I think FTSE 100 dividend share Polymetal is an attractive way to do this.
