These high-yield FTSE 100 shares have all tanked in value in 2023. Here’s why I’d buy them in my Stocks and Shares ISA today.
National Grid
Rising interest rates are a threat to National Grid (LSE:NG) by pushing its debt servicing costs ever higher. However, I still think its highly defensive operations make the company a top buy today.
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Not only does the power transmission business provide an essential service, it has a monopoly on what it does. As a consequence, the company has brilliant profits visibility during downturns like this.
I also like National Grid as it has excellent long-term growth opportunities because of the green energy revolution. I don’t think these qualities are reflected in the company’s modest forward price-to-earnings (P/E) ratio of 14.1 times.
The FTSE firm offers a 5.9% dividend yield for this financial year (to March 2024). This steadily rises to 6.2% for fiscal 2026 too, with brokers expecting steady dividend expansion for the next three years at least.
Anglo American
Commodities producers like Anglo American (LSE:AAL) face significant short-term danger as China’s economy cools. This is due to the Asian nation’s position as a major raw materials importer (it sucks up between 55% and 60% of the world’s copper alone).
Yet I believe this danger is baked into the mining giant’s low P/E multiple of 9 times. I fully expect the base and precious metals digger’s share price to soar from current levels as the new commodities supercycle gets under way.
A growing global population has steadily driven metals consumption higher. But thanks to themes like the growing green economy, the technological revolution, and increasing urbanisation and infrastructure spending, demand growth is set to be especially strong during the next 20 years. This means profit growth at Anglo American could surge ahead of historical norms.
Today, the miner also carries a healthy 4.6% dividend yield for 2023. This comfortably beats the forward average of 3.8% for FTSE shares.
Aviva
I’m also considering upping my stake in Aviva (LSE:AV) after its share price turned lower again. Investors have begun selling the company again as chatter concerning a potential takeover has gone quiet.
Sales of financial services can fall sharply during economic downturns. So Aviva is vulnerable to a profits hit, given the tough conditions in its core UK marketplace.
On the plus side, the firm’s leading position in the general insurance sector should help it to weather any turbulence. It’s the biggest provider in the UK and has the third-largest market share in Ireland.
But this isn’t why I bought the FTSE 100 firm for my portfolio this month. I think earnings here will soar over the long term as elderly populations in its markets rapidly grow. This should supercharge demand for its wealth and retirement products, in my opinion.
Today, Aviva shares carry an 8.2% dividend yield, and trade on a forward P/E ratio of 10.2 times. I find this sort of all-round value for money hard to resist.
