One dirt cheap dividend stock I’m desperate to buy and it’s not Persimmon or Vodafone 

This FTSE 100 dividend stock looks like it could beat the market when the economy starts to recover and I’d like to buy it today.

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I’m keen to take advantage of today’s super-cheap share prices to add another FTSE 100 dividend stock or two to my portfolio. With around 15 shares on the index yielding at least 6% a year, and some paying income of more than 10%, there’s plenty of choice.

I can’t afford to buy them all, obviously, so I’m sifting through the highest yielders to find where the best opportunities lie.

I have a tiny stake in housebuilder Persimmon, which until recently was yielding almost 20% a year. That was clearly ridiculous and management subsequently cut the dividend by three quarters. Today, it yields just 5.66%.

Should you invest £1,000 in Glencore Plc right now?

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Out shopping for income

It’s incredibly cheap though, trading at 4.24 times earnings as a house price crash threatens. I think it’s a little too early in the cycle to buy housebuilders, as we haven’t yet reached the point of maximum pain. 

Even if we had, I would prefer Taylor Wimpey, which looks a more solid operation but is also cheap at 5.56 times earnings. Better still, it’s forecast to yield a thumping 9.32% in 2023, and that may even be sustainable (although dividends are never guaranteed).

Telecoms giant Vodafone Group is another that catches the eye, trading at 7.35 times earnings while yielding 10.9%. I’m not putting any faith in its dividend though, as new broom CEO Margherita Della Valle looks to shake up this sprawling operation. 

She could save a heap of money by slashing the dividend in half. That’s what I’d do. Although a 5% yield would still be good, Vodafone is a mess than needs sorting and I’m standing clear.

The FTSE 100 dividend stock I’m really keen to buy right now is Anglo-Swiss commodity giant Glencore (LSE: GLEN). 

Its shares have been hit by weak market sentiment, dropping 16.4% over the last six months, after China’s post-Covid reopening disappointed. Over 12 months, Glencore is up 15.99%.

Created with Highcharts 11.4.3Glencore Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Commodity stocks are notoriously volatile, swinging up and down depending on the mood of the markets. They have inevitably been hit by rising interest rates, but as these peak they should recover. We saw that last week, after June’s 3% US inflation figure put a rocket under the FTSE 100. Antofagasta, Anglo American and Glencore all featured among the top 10 climbers.

This is the stock for me

Glencore still looks cheap, trading at just 4.4 times earnings, so there could be more to come. The recovery will no doubt be bumpy, so I’m not expecting instant returns. However, I only buy shares with a minimum 10-year view, and ideally longer.

Glencore is a leading producer of metals like copper, cobalt, zinc, and nickel, all required for the renewables revolution. It’s also a leading producer of company dividends, with a forecast yield of 7.94% this year and 7.04% in 2024.

The big threat is that the Chinese growth story is over and its voracious appetite will calm to more normal levels. Plus interest rates could stay higher for longer, squeezing demand while driving up costs. Glencore also has thin operating margins of just 6%. Yet I hope to add it to my portfolio, as soon as I find the cash.

Should you invest £1,000 in Glencore Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Glencore Plc made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has positions in Persimmon Plc. The Motley Fool UK has recommended Vodafone Group Public. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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