I think these FTSE 100 dividend shares are now too cheap to miss. Here’s why I’m looking to add them to my Stocks and Shares ISA when I next have spare cash to invest.
Glencore
Latest export data from commodities-hungry China would have made for grim reading over at mining giant Glencore (LSE:GLEN). This showed outward shipments tumbled 6.4% in October, suggesting the downturn in metal prices could have further to run.
But this doesn’t deter me as an enthusiastic dip-buyer. I believe this threat is baked into the company’s rock-bottom valuation. It currently trades on a forward price-to-earnings (P/E) ratio of just 9.1 times.
I also believe prices of the miner’s copper, aluminium, iron ore and other raw materials will rocket over the next decade, helping profits (and by extension Glencore’s share price) to soar from current levels.
Demand for industrial metals is expected to boom, thanks to a mix of:
- Strong economic growth in emerging markets.
- A rapidly multiplying global population.
- Technological advances that are driving sales of electronic products.
- Continued urbanisation in developing regions.
- Vast spending on infrastructure in the West.
- Accelerating demand for green technologies (like renewable energy hardware and electric vehicles).
I think Glencore could be one of the best ways for me to capitalise on the new commodities supercycle too. As well as producing huge amounts of metal, it also has a considerable marketing division which helps investors hedge risk. Digging for raw materials is a highly complex and costly endeavour, after all.
Today, the company also offers a mighty 7.6% dividend yield. I think it offers excellent all-round value at recent prices.
HSBC Holdings
I’d also like to add HSBC Holdings (LSE:HSBA) shares to my portfolio. Like Glencore, it could prove an effective way for me to capitalise on soaring economic growth rates in developing regions.
Also like the mining giant, this Asia-focused company faces near-term uncertainty as China’s economy wobbles. It is especially vulnerable to a continued decline in the country’s real estate sector. The FTSE 100 bank set aside $500m during the third quarter to cover these industry difficulties.
However, I still believe the potential long-term rewards of owning HSBC shares outweigh these concerns. Demand for financial products is tipped to boom as population and wealth levels in its Asian heartlands sharply increase.
The bank has grown its global customer base to a whopping 39m, making it the second-largest UK bank behind only Barclays. This number should keep climbing rapidly as well, as the company invests heavily in its fast-growing regions. It is spending $6bn between 2021 and 2025 to supercharge profits in China, Hong Kong and Singapore alone.
Today, HSBC shares trade on a forward P/E ratio of 5.9 times. They offer a huge 8.3% dividend yield too. I think the bank is too cheap to ignore right now.
