2 ultra-cheap FTSE 100 dividend stocks with 5%+ yields

With the FTSE 100 trading above 7,400, it's tough to find dividend stocks trading at reasonable valuations. However, not all stocks have performed as strongly, and I've found two high-yielding companies which have been lagging behind the market recently.

Ultra-low valuations

Shares in advertising and marketing giant WPP(LSE: WPP) are currently trading at ultra-low valuations, following a 32% fall in the value of the company over the past 12 months. WPP shares trade at just 9.7 times its expected earnings this year and offer a yield of 5.3%.

Certainly, WPP is going through one of its most difficult junctions in the company's history, as advertisers have cut spending and digital disruption has put the squeeze on revenue growth. However, for long-term investors, this could be a great contrarian opportunity to buy the company's shares on the cheap.

Sum of its parts

Analysts from Cenkos Securities reckon WPP trades at a substantial discount to the sum of its parts, as a break-up of the advertising group could see the company worth as much as £22bn, or about £17 per share. WPP's management has so far indicated that a break-up is not currently on the cards, but it seems clear that the company trades at a conglomerate discount and there is a need for urgent change.

WPP's joint chief operating officers Mark Read and Andrew Scott will probably still moot a possible sale of its less integrated divisions, such as its PR or market research units. In the meantime, however, their main focus will be to restore growth to the company.

On the downside, near-term headwinds will likely hold back a swift recovery in its share price. With few indications pointing to a pick-up in marketing spending by the major brands, structural factors will likely continue to drag on revenues and impact on earnings going forward. As such, WPP's shares may well remain unloved for some time.

Value play

Elsewhere, insurance group Aviva(LSE: AV) is another high-yield stock to consider for value investors.

Although Aviva's record on growth is unimpressive when compared to some of its sector peers, the insurer has made great strides in tackling its historic underperformance in profitability and its balance sheet concerns. Last year, operating earnings per share rose 7% to 54.8p, while its Solvency II cover ratio improved to 198%, from 189% in the previous year.

Excess capital

Looking ahead, I'm excited with what the company will do with its improved capital generation. The company is generating more capital than it is returning as cash to shareholders and is already sitting on roughly £2bn of excess capital, which could be used for acquisitions in new markets and investments in new technologies.

So far, though, City analysts don't seem too enthusiastic, as the group's investments in the past haven't reliably created value for shareholders. But with expectations being so low, there's a low hurdle to surprise and beat on the upside.

Still, analysts remain upbeat about the group's dividend prospects. They expect total dividends per share to grow from 27.4p in 2017, to 30p in the current financial year, giving prospective investors a very appealing forecast dividend yield of 5.8%.

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Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.