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Highlights
- One of the top global indices, UK’s FTSE 100, is offering an average dividend yield of 3.41% at present.
- FTSE 100 stocks have been on the radar of investors as they have the potential to act as a hedge against inflation.
The UK market has been in turmoil lately and the value of the blue-chip FTSE 100 index has gone down by over 5% over the past year. Despite this, it is among the top-performing global indices. At around 11:00 AM (GMT+1) on 28 June, the FTSE 100 index was rallying by 1.15%, at 7,341.58. At present, the index is offering an average dividend yield of 3.41%. Even though this might not be enough to beat the soaring inflation levels, FTSE 100 stocks have great capital growth potential.
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With the cost-of-living crisis escalating, economists have been predicting that the UK is headed for a recession. With the shrinking GDP growth, declining business activity, falling consumer confidence, and soaring household bills, the UK economy has been showing signs of slowing down significantly. The Bank of England (BoE) has been sticking to its monetary policy tightening stance and has consistently been raising the interest rates to counter the impact of rising inflation.
Amid this economic turmoil, dividend-paying FTSE 100 stocks have been on the radar of investors as they have the potential to act as a hedge against inflation. FTSE 100 companies pay out billions of pounds in dividends and the shareholder payout is expected to be higher this year owing to soaring oil and commodity prices.
Let’s look at 3 FTSE 100 dividend payers that investors may add to their portfolio amid recession fears.
Rio Tinto plc (LON: RIO)
Rio Tinto plc, the UK-based metals, and mining group, on 28 June had a market cap of £63,101.64m. The shares of Rio Tinto have depreciated by -14.27% over the last one year as of 28 June, with its YTD returns placed at 6.23%. The company offers a huge dividend yield of 12.7% and boasts of a price-to-earnings (P/E) ratio of 4.78. Rio Tinto plc was trading at GBX 5,197.00 and it was up by 2.89%, at 11:32 AM (GMT+1) on 28 June.
Imperial Brands plc (LON: IMB)
The Bristol-based firm was initially called Imperial Tobacco Group plc, and is presently the fourth-largest cigarette-producing firm globally. Its live market cap is £17,492.26 million. On 28 June, the shares of Imperial Brands were witnessing an appreciation of 19.94% over the last year and with its YTD return at 15.65%. With a P/E ratio of 8.64, the company is currently offering an annual dividend yield of 7.6% to its investors. On Tuesday, Imperial Brands plc’s shares were trading witnessing a gain of 1.82% with the trading price at GBX 1,874.00 at 11:39 AM (GMT+1).
Anglo American plc (LON: AAL)
Anglo American plc, the UK-based metals producer's market cap stood at £41,913.00 million as of 28 June. The Anglo American has given its investors YTD gains of 5.70%, with its share prices appreciating by 7.47% over the last year. AAL offers an annual yield of 7.5% with a P/E ratio of 5.62. Anglo American plc’s shares were trading at GBX 3,188.50, up by 1.76%, at 11:43 AM (GMT+1) on Tuesday.
