FTSE 100 investors! I think these are 3 of the best dividend shares for beginner portfolios

For new FTSE 100 (INDEXFTSE:UKX) investors, now could be the perfect time to buy into these three companies.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Are you new to investing and ready to build a dividend portfolio? If so, you may be looking at hundreds of stocks and feeling somewhat overwhelmed. 

Today, I’d like to discuss three FTSE 100 stocks that you may want to analyse for potential inclusion in a long-term portfolio.

All investing involves some level of risk and there’s no guarantee as to how any of these three stocks are going to perform in the coming years. However, they all have characteristics that may make them appropriate for most portfolios. They offer regular cash payments to shareholders in the form of a dividend, are companies with large market caps, and come from a wide range of sectors, offering some degree of diversification.  

Admiral Group

In mid-August, insurer Admiral Group (LSE: ADM) released interim results that pleased the City. Most of our readers would be familiar with the group’s offerings that include vehicle, household and travel insurance in the UK. It also owns Confused.com, a price comparison website. Outside the UK, it has several other insurance and price comparison businesses.

Pre-tax profits rose 4% in the six months to June, to £218m. Investors were pleased to note that motor policies grew by around 70,000 year-on-year to 4.33m.

Year-to-date ADM shares are up about 5.6%. The dividend yield stands at 4.2% and the stock is expected to go ex-dividend next in May 2020.

Like the legendary investor Warren Buffett, who loves insurance companies, you may want to include the stock in a long-term portfolio. 

Carnival

Carnival (LSE: CCL) is the world’s largest cruise operator and its shares are dual-listed on the LSE and  NYSE in the US. The group’s different cruise line brands operate a combined fleet of over 100 vessels visiting more than 700 ports globally. 

Annually, the combined fleet welcomes almost 11.5m guests aboard, or about 50% of the global cruise market.

I believe that the potential growth, especially in emerging economies of Asia as well as Latin America, is likely to be a major catalyst for CCL shares. Even in the US, only an estimated 4% of the population takes cruise trips annually.

The cruise operator offers quarterly dividends with a yield of around 4.4%. The shares, which went ex-dividend on 21 November, trade at a trailing P/E of 9.5. The group also has an extensive share repurchase programme.

Unilever

If you are nervous that we may potentially be headed for an economic slowdown both in the UK and globally, then consumer products giant Unilever (LSE: ULVR) may be a stock to consider.

After all, the group managed to weather the recession of 2008/09 quite well, in part due to its growing exposure to the developing world. Now its revenues coming from emerging markets are over 50% of its total. The strength of its brands gives the group the benefit of terrific pricing power. 

On 17 October, ULVR released its third-quarter 2019 trading statement that got a mixed reception from investors and the share price declined. However, it has since recovered, another sign that most investors regard any pullback as a buying opportunity.

It also offers quarterly dividends with a yield of around 3%. The shares went ex-dividend on 31 October. The company has also bought back stock during the year.

If you want to invest in a multinational company whose consumer products have predictable and steady demand, then you may want to do due diligence on Unilever.

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.

tezcang has CCL covered calls (December 6 expiry) on CCL ADR shares listed on NYSE. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Admiral Group and Carnival. 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.

More on Investing Articles

Google office headquarters
Investing Articles

1 reason I like buying S&P 500 shares – and 1 reason I don’t

Will this investor try to improve his potential returns by focusing more on S&P 500 shares instead of British ones?…

Read more »

Young woman holding up three fingers
Investing Articles

3 SIPP mistakes to avoid

Our writer explains a trio of potentially costly errors he tries to avoid making when investing his SIPP, on an…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

Here’s how (and why) I’d start buying shares with £25 a week

Our writer uses his investment experience and current approach to explain how he would start buying shares on a limited…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Here’s my 5-step approach to earning passive income of £500 a month

Christopher Ruane explains the handful of steps he uses to target hundreds of pounds in passive income each month.

Read more »

Investing Articles

2 UK shares I’ve been buying this week

From a value perspective, UK shares look attractive. But two in particular have been attracting Stephen Wright’s attention over the…

Read more »

Investing Articles

A lifelong second income for just £10 a week? Here’s how!

With a simple, structured approach to buying blue-chip dividend shares at attractive prices, our writer's building a second income for…

Read more »

Investing Articles

Here’s how I’d use a £20k Stocks and Shares ISA to help build generational wealth

Discover how our writer would aim to turn a £20k Stocks and Shares ISA into a sizeable nest egg by…

Read more »

Investing Articles

Billionaire Warren Buffett just bought shares of Domino’s Pizza. Should I grab a slice?

Our writer takes a look at a few reasons why Domino's Pizza stock might have appealed to Warren Buffett's Berkshire…

Read more »