Can you afford to miss out on these 2 FTSE 100-busting dividend yields?

The Motley Fool

The FTSE 100 is currently offering average dividend yields of 4.4%, according to the latest quarterly Dividend Dashboard from AJ Bell. That's quite a way ahead of its long-term average, and with an £87.5bn bonanza set to be handed out this year, these are surely great times for income investors.

And if 4.4% is the average, those seeking better dividends can surely do better. Here are two that I think could reward you well.

Bargain insurance

Our TV screens are awash with competing insurance ads these days and Direct Line Insurance Group(LSE: DLG) has been one of the winners.

We've seen earnings per share grow from 25.12p in 2013 to 29.43p last year, with forecasts suggesting rises to 32p by 2019. But more important for us, the dividend has been progressively hiked as the firm hands back surplus capital in the form of special payments.

Last year brought a total ordinary dividend of 20.4p per share, which alone would have yielded 5.3% and easily beaten the index. A special dividend of 15p took that to 35.4p for an overall yield of 9.2%.

That looks set to continue, as forecast total payments of approximately 30p per share would yield 8.4% on the current share price.

This year is off to a solid start and although total gross written premium for the first quarter dropped by 5%, the firm saw a 4.7% rise in direct own brands.

The freezing spell at the start of the year was expensive, incurring associated claims of around £50m -- which takes up most of the firm's assumption of approximately £55m in weather-related claims for the full year.

But even with that, Direct Line has reiterated its full-year guidance.

And with a solvency capital ratio (after having paid 2017's dividends) of 165%, I can see a few more healthy years for dividends yet.

Get it while you can?

The share price at Imperial Brands(LSE: IMB) has lost 30% over the past two years, presumably as investors worry about the increasing shunning of the noxious weed.

But 2017 capped nine consecutive years of 10% dividend growth -- and anyone who bought at the start of that run will have locked in some pretty amazing effective yields on their purchase price.

The latest hike, coupled with the share price downturn, boosted the dividend yield from 4% in 2016 to 5.4% in 2017. Further uplifts forecast by the City's analysts would see that up to 7% this year and 7.5% next.

But with the share price making upward moves recently, will we soon be too late to grab yields at this level? We might, just.

Imperial has dumped a lot of its non-core tobacco products in the US, which has led to a reduction in net debt. Its cost-saving measures should save around £100m this year. And while fears of people quitting smoking are very real, Imperial is making serious inroads into the vaping business which should hopefully see its market share in developed countries hold up.

Long-term, how much of a post-cigarette market Imperial can command is a big question. But I see those days as still some way off. And I also think much of the fear is already accounted for in the share price.

Imperial Brands shares are priced on forward P/E multiples of only around 10 and while I still see a steady stream of dividends, I'll consider that a bargain.

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