The Best FTSE 100 Dividend Stocks to Consider

Roberto Rivero

Dividend stocks can make a great addition to an investment portfolio, offering investors the opportunity to diversify whilst earning regular income on your portfolio which can either be kept or reinvested to compound your position. 

The UK’s benchmark index, the FTSE 100, is comprised of the 100 largest companies listed on the London Stock Exchange (LSE) by market capitalisation and many of these are regular dividend payers. In this article, we will highlight two of the best FTSE 100 dividend stocks to consider adding to your portfolio for additional income in 2022. 

How to Choose the Best Dividend Stocks 

Before we dive into our picks for the best FTSE 100 dividend stocks to consider in 2022, it is worth quickly identifying some of the metrics investors should consider when choosing the best dividend stocks. Below are some of the most important factors investors should examine when picking dividend stocks

  • Dividend Yield
    • Annual dividend per share as a percentage of current share price 
  • Earnings per Share (EPS)
    • A company’s earnings divided by the number of shares 
  • Dividend Payout Ratio
    • Annual dividend per share as a percentage of EPS 
  • Continuous Dividend Payments
    • Has the company got a proven history of continuously paying dividends? 
  • Payout Growth
    • Have dividend payments been growing over time? 
  • Debt
    • High debt is a red flag for dividend stocks 

The Best FTSE 100 Dividend Stocks to Consider in 2022 

The FTSE 100 is comprised of the 100 largest companies listed on the London Stock Exchange (LSE) by market capitalisation and, among these are many reliable and generous dividend stocks. Below are two of our picks for the top FTSE 100 dividend stocks to consider in 2022.

Rio Tinto 

Rio Tinto is the second-largest metals and mining corporation in the world and is the first on our list of top FTSE 100 dividend stocks. 

Rio Tinto, who paid a record dividend during 2020, has a long history of paying generous dividends to its shareholders. Since 2000, its annual dividend has increased each year on all but four occasions, two of which the dividend remained the same. On the other two occasions (2009 and 2016) dividend payments fell but were still distributed.  

Source: Dividenddata.co.uk - Rio Tinto - Annual Dividend History 2000 – 2020. Date Data Captured: 10 January 2022 

 

At the time of writing, the mining giant has an incredibly high dividend yield of more than 9.5%. Although, this high yield is partly down to a drop in share price in 2021, which, in turn, is largely down to iron ore prices tumbling considerably last year. Whilst Rio Tinto works with several different commodities, in 2020, just under 60% of its gross sales came from iron ore, meaning that the drop in price significantly affected their income. 

However, 2022 and further ahead looks more promising for Rio Tinto, after their acquisition of a lithium project in Argentina. Demand for lithium is set to skyrocket going forward as electric vehicle manufacturing continues to grow.  

Depicted: Admirals MetaTrader 5 – Rio Tinto Weekly Chart. Date Range: 12 July 2015 – 7 January 2022. Date Captured: 7 January 2022. Past performance is not a reliable indicator of future results. 

 

British American Tobacco 

Our next pick for FTSE 100 dividend stocks to consider in 2022 may not be a popular choice among many readers. British American Tobacco (BAT) is certainly not an ethical stock but with a current dividend yield of more than 7.5% it is one of the highest yielding FTSE 100 dividend stocks. 

BAT operates in around 180 countries, owning a wide range of cigarette brands and a growing line of next-generation tobacco products. 

Tobacco companies, although controversial, generally have a solid history of providing shareholder value through regular dividend payments, and BAT is no different. Since 2000, BAT has raised its dividend payment every year (note that at the end of 2017, BAT changed the frequency of its dividend payment from semi-annually to quarterly and, therefore, that year is excluded from this statement). Bear in mind that these consistent increases in dividend pay-outs continued even during the ‘Great Recession’ of 2008 and the outbreak of the Covid-19 pandemic in 2020, which demonstrates the company’s commitment to their shareholders. 

Source: Dividenddata.co.uk -British American Tobacco - Annual Dividend History 2000 – 2021. Date Data Captured: 10 January 2022 

 

Aside from the question of ethics, which will be enough to put off many investors, there also remains the question of what the future holds for tobacco companies. Although the number of smokers throughout the world remains relatively high, it has decreased considerably over recent years, as the negative health effects become more and more publicised – this is particularly true amongst the younger generation. 

This downward trend in people who smoke has been reflected in a downward trend in the share price of BAT, which fell more than 40% in the five year period ending 31 December 2021. However, BAT, as with other tobacco companies, have invested heavily in next-generation products, such as e-cigarettes, to try and tackle falling demand. Although these next generation products still account for a relatively small percentage of total revenue, it is a percentage which is growing. 

Depicted: Admirals MetaTrader 5 – British American Tobacco PLC Weekly Chart. Date Range: 12 July 2015 – 7 January 2022. Date Captured: 7 January 2022. Past performance is not a reliable indicator of future results. 

 

FTSE 100 Highest Dividend Yielding Stocks 

Now that we have revealed two of the best FTSE 100 dividend stocks to consider in 2022, to round things off, we have compiled a list of the current ten FTSE 100 highest dividend yielding stocks. 

FTSE 100 Highest Dividend Yielding Stocks
Company Sector Dividend Yield 
Evraz Mining

15.04%

Rio Tinto

Mining

9.68%

BHP Group

Mining

9.62%

M&G

Fund Management and Financial Services

8.85%

Imperial Brands

Tobacco

8.46%

Persimmon Housebuilder

8.41%

Polymetal International

Mining

8.27%

British American Tobacco

Tobacco

7.65%

Phoenix Group Holdings

Life Insurance

7.19%

Vodafone

Telecommunications

6.57%

Source: Dividenddata.co.uk – Date Data Captured: 10 January 2022. 

How to Invest in Dividend Stocks with Admirals 

With an Invest.MT5 account from Admirals, you can invest in both of the FTSE 100 dividend stocks highlighted in this article, as well as many others, and collect potential income through any dividend distributions.  

If you are wondering how to invest in dividend stocks with Admirals, follow these steps: 

  1. Sign up with Admirals 
  2. Open an Invest.MT5 account 
  3. Download the MetaTrader 5 trading platform 
  4. Press Control + U to bring up the ‘Symbols’ window, where you can search for the FTSE 100 dividend stocks you wish to invest in, then press ’Show Symbol’ to add the stock to the Market Watch window 
Depicted: Admirals MetaTrader 5 - Symbols

 

  1. Look for your dividend stock in the Market Watch window on the left-hand side of the trading platform, right-click on it and press ‘Chart Window’ to open a price chart 
  2. Click ‘New Order’ at the top of the screen in order to bring up an order window. Here, you can select the number of FTSE 100 dividend stocks you wish to purchase and click ‘Buy’ to send the order to the market 
Depicted: Admirals MetaTrader 5 – Rio Tinto Daily Chart. Date Range: 13 May 2021 – 11 January 2022. Date Captured: 11 January 2022. Past performance is not a reliable indicator of future results. 

 

Invest with Admirals 

As well as these two dividend stocks, Invest.MT5 account holders can also buy more than 4,300 other shares and over 200 over 200 Exchange-Traded Funds (ETFs) from 15 of the world’s largest stock exchanges! Other benefits include: 

  • Opening an account with a minimum deposit of just €1 
  • Competitive transaction fees and no account maintenance fee 
  • Exclusive access to our Premium Analytics portal, at no extra cost! 
  • Free use of the world’s number-one multi-asset trading platform, MetaTrader 5 

To start enjoying these benefits and many more, click the banner below to open an account today: 

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INFORMATION ABOUT ANALYTICAL MATERIALS:  

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:  

  1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
  3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
  4. The Analysis is prepared by an independent analyst Roberto Rivero, Freelance Contributor (hereinafter "Author") based on personal estimations.
  5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
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