After an underwhelming start to the year, March looks like a great time to load up on FTSE 100 dividend shares.
London’s blue-chip index is down 1.18% year to date, which means shares are slightly cheaper, valuations a little more generous, and yields a bit higher. Here are three stocks I’d really like to buy this month.
On 30 January, I invested the last £1,250 of cash in my self-invested personal pension (SIPP) into insurance conglomerate Phoenix Group Holdings (LSE: PHNX). That bought me 218 shares at £5.11 each, but it’s easily my smallest portfolio holding.
Sky-high income
The Phoenix share price has fallen 3.35% since, and I’d like to take this opportunity to top it up. It offers the highest yield on the entire FTSE 100 at 10.22% a year. Double-digit yields are often a red flag, but the board seems committed.
Phoenix has to give the shareholders some incentive to stay loyal. The share price is down 22.05% over one year and 28.96% over five. As a result it’s super-cheap, trading at just 6.1 times earnings.
On current form, the Phoenix share price could idle for years. However, if that dividend proves sustainable, I’d still double my money in less than eight years. I’ll treat any capital growth as a bonus.
Asia-focused bank HSBC Holdings (LSE: HSBA) had a bumpy February. Its shares plunged on the 21st after a $3bn impairment on its stake in China’s Bank of Communications slashed Q4 profits from $5bn to $1bn year-on-year.
Yet HSBC still posted a 78% rise in full-year pre-tax profit to $30.3bn and announced a $2bn share buyback. Bargain seekers quickly took advantage, with the share price recovering 4% in the final week.
HSBC shares look tempting trading at 6.75 times earnings, while the yield of 7.87% makes this even more enticing. Operating in China brings political and economic challenges, but they’re hard to avoid anywhere these days.
Hat-trick of high yields
Taylor Wimpey (LSE: TW) has been one of my best-performing portfolio holdings, up around 20% since I bought it last year. It’s not looking so clever today. My shares plunged on Thursday (29 February) after the housebuilder revealed full-year profits almost halved on higher mortgage rates and weaker demand.
Everybody knew 2023 was tough. It was the admission that Taylor Wimpey would build fewer homes this year that did the damage. I bought the stock on the assumption that it would recover once inflation and interest rates started falling. For that to happen, it needs to build.
There’s no way I’m selling my shares. Not with Taylor Wimpey yielding 6.84%. I’ll keep re-investing all my dividends, while I wait for brighter days to arrive. House prices are up 1.2% in the last year and I expect more to come.
These three stocks would give me an average yield of 8.32%. If I was to put £5,000 in each, that would give me a passive income of £1,248 a year. I might get some capital growth, too, when the FTSE 100 springs into life. Let’s hope it happens in March — but after I’ve bought these stocks, rather than before!
