Two FTSE 100 stocks I’d add to my dividend portfolio today

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The FTSE 100 index has had a good run so far this year, rising more than 10%. As a result, there’s not as much value on offer for investors as there was at the start of the year. Having said that, with a number of sectors remaining out of favour, there are still plenty of stocks within the index that do offer significant value right now. Here’s a look at two dividend stocks I’d be happy to buy for my own portfolio today.

Sustainable packaging solutions

Mondi (LSE: MNDI) is an under-the-radar FTSE 100 company that specialises in sustainable packaging solutions. Spun off from mining giant Anglo American around 12 years ago, the group is fully integrated across the packaging and paper value chain and operates in over 30 countries.

Mondi’s share price has fallen around 12% over the last year on the back of concerns over industry supply and demand dynamics and the possibility of a global economic slowdown. However, to my mind, the long-term growth story remains attractive – as a supplier of sustainable packaging solutions, the group looks well placed to capitalise as society continues to become more environmentally aware. For example, as a major producer of paper bags, the group should benefit as the world moves away from plastic. A trading update yesterday revealed that for the half-year to 30 June, Mondi is expecting underlying earnings per share to be between 4% and 11% higher than last year.

At the current share price of 1,830p, the shares trade on a forward-looking P/E ratio of just 11.2 and offer a prospective dividend yield of 4%. To my mind, these metrics are attractive given the group’s long-term growth prospects. As such, I’d be happy to buy the stock for my own portfolio today.

Long-term growth story 

Another FTSE 100 dividend stock that I’d be happy to buy for my portfolio right now is financial services giant Prudential (LSE: PRU). Like Mondi, the stock is a little out of favour at the moment. 18 months ago, Prudential shares were changing hands for 2,000p, however, today they can be picked up 15% cheaper.

There are a number of reasons why Prudential shares are still well off their early-2018 highs. For starters, the group’s substantial exposure to China is spooking investors amid the ongoing trade war between the Asian powerhouse and the US. Secondly, Prudential is in the process of de-merging its UK and European operations, which adds further uncertainty to the investment case.

However, looking beyond these short-term issues, I see significant investment appeal in the stock. In my view, Prudential’s exposure to fast-growing countries across Asia provides the potential for significant long-term growth, as by 2040 Asia will account for around half of global GDP, according to McKinsey. Increasing demand for financial services products such as savings accounts and life insurance across the region in the years ahead should benefit Prudential. 

PRU shares currently trade on a P/E ratio of just 10.9 and sport a prospective dividend yield of a healthy 3%. At that valuation, I think the shares are a bargain.

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Edward Sheldon owns shares in Mondi and Prudential. The Motley Fool UK has recommended Prudential. 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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