BP plc isn't the only 6% FTSE 100 dividend stock I'd buy today

If you're seeking solid long-term dividends, It's hard to see why you'd need to go outside the FTSE 100 right now -- especially as the recent slump in the UK's top index has pushed up yields.

According to the Dividend Dashboard, produced quarterly by AJ Bell, in December the FTSE 100 was offering an average forecast dividend yield of 4.3% for 2018, which is significantly above its long-term average. At the time, the index stood at 7,540 points, but has since dropped to around 7,080 -- which suggests the average yield is better than 4.5% now.

So why would you go for the big dividends from BP(LSE: BP)? Well, for one thing, the FTSE fall has hit BP shares too, and has helped push the forecast yield to 6.2%. Beating the FTSE average for dividends means investing in stocks that make reliable long-term payments -- and BP is certainly one of those.

BP maintained its dividend right through the oil price crunch, refusing to let the downturn detract from a long-term dividend strategy.

Solid again

The fourth quarter dividend for 2017 was maintained at 10 cents yet again, bringing in the same 40 cents per share as the previous three years. Again it wasn't covered by earnings, but that's set to change in 2018 as a big comeback in EPS is predicted.

And it looks realistic, after 2017 replacement cost profit soared to $6.2bn from just $2.6bn a year previously -- the Q4 figure of $2.1bn beat analysts' expectations of $1.9bn.

Chief executive Bob Dudley called it one of the strongest years in BP's recent history. He added: "We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders out to 2021 and beyond."

That sounds to me like a company set for big long-term dividend income, and I reckon now is a very good time to buy the shares.

Underrated

The insurance sector seems perpetually undervalued to me, and I think it's because of short-term uncertainty -- much of the business is dealing with short-term risk, after all.

The most recent issue facing Admiral Group(LSE: ADM) has been a regulatory change that saw the cost of personal injury claims climb and significantly damaged the company's interim profit.

But that didn't stop the company reporting record pre-tax profit for 2017 of £405m, up 43% on 2016 (a year which saw a rare dip). Chief executive David Stevens told us the firm had seen its year-on-year profits fall only twice in its 25-year history, saying it's "great to be back in the groove, with a 23rd year of record profits."

A special dividend worth 18.5p per share took the total for the year to 114p, for an 11% increase. Current forecasts are around the same level, and would provide a yield of 6.2% on today's share price.

Yield rising

Again, the FTSE dip has helped, pushing the shares down 8% since the start of 2018, and making that boosted yield possible.

I can't help thinking some people will see a forward P/E of 16 as somewhat fully valued, especially with the short-term volatility the sector can attract. But Admiral's 25-year record is exemplary, and for me it's one of the best managed in the industry.

My colleague Rupert Hargreaves named Admiral as one of his top two dividend stocks for 2018, and I can see why.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended BP. 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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