2 of my top dividend stock picks for 2017

With the FTSE 100 index trading above 7,000 points, finding high quality dividend stocks trading at reasonable valuations isn't the easiest task. However after spending some time analysing a list of UK stocks yielding over 4%, I've identified two stocks that I believe offer good value for 2017 and beyond.

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Greene King

Shares in pub operator Greene King(LSE: GNK) have taken a beating since the Brexit vote, falling from just under 900p to trade at 710p today.

And it's no surprise really that sentiment towards the company has been dismal, as significant uncertainty still looms in relation to how Brexit will affect the UK economy and the entire hospitality industry faces increased cost pressures due to government initiatives such as the National Living Wage.

However, after the 20% share price drop, Greene King now trades on a forward P/E of just 9.8 and supports a dividend yield of 4.8%. On those metrics, I believe the pub king is one of the best value dividend stocks in the FTSE 350 right now.

The company has a formidable dividend growth track record, increasing its dividend by a compound annual growth rate (CAGR) of 10% since 1980. And with dividend coverage standing at a healthy level of 2.2, higher than many other UK companies with similar yields, it suggests that the dividend isn't in any danger of being slashed.

Half-yearly earnings reported in late October were robust, with group revenue jumping 14% and adjusted earnings per share rising 4.3%, and analysts are forecasting full-year revenue and earnings growth of 6.3% and 2.4% respectively.

The investment thesis isn't without risks and if the UK does fall into a catastrophic recession on the back of Brexit, it's likely that profitability at Greene King will suffer. The company has stated that it is "alert to a potentially tougher trading environment ahead." However it has also said it's well placed to "deliver another year of progress, value creation and returns for our shareholders," and therefore at the current share price, I believe Greene King offers a favourable risk/reward ratio.

Aviva

Another dividend stock that looks to offer value in my opinion is Aviva(LSE: AV). The insurer paid out dividends of 20.8p per share last year and with city analysts forecasting payouts of 22.7p and 25.7p for FY2016 and FY2017, the prospective yields for the next two years are an appealing 4.6% and 5.2%.

Aviva's share price has enjoyed a strong run since suffering heavily in the immediate aftermath of the Brexit vote, however despite the fact the stock now trades 11% higher than it did pre-Brexit, the shares still only trade on a forward P/E of 10.

Given the fact that management has stated that leaving the EU will have "no significant operational impact on the company," and that synergies from the 2014 acquisition of Friends Life are expected to slash operating costs, I believe Aviva offers good value at the current share price and that the stock offers a nice mix of capital and dividend growth potential.

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Edward Sheldon owns shares in Aviva. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.