2 FTSE 100 dividend champions I'd buy for my ISA today

Many FTSE 100 dividend stocks have fallen quite sharply this year. As a result, there are now some spectacular yields on offer. Here's a look at two companies with outstanding dividend track records that offer big yields right now.

British American Tobacco

The last time I covered British American Tobacco(LSE: BATS), on 31 December 2017, the shares were changing hands for 5,000p. At that price, the stock offered a trailing yield of around 3.4%. Fast forward to today, and the shares now cost just 4,080p and offer a trailing yield of a high 4.8%, with a recent 15% dividend hike from the company. With that yield now on offer, I believe the shares warrant a closer look.

British American Tobacco has one of the best dividend-growth track records in the entire FTSE 100. For example, over the last decade, the tobacco giant has increased its payout from 66.2p per share to 195.2p per share. That's an incredible compound annual growth rate (CAGR) of 11.4% - way above inflation.

Looking forward, despite industry headwinds, it appears that BATS has the capacity to keep growing its payout. The acquisition of Reynolds American has created one of the world's leading tobacco and Next Generation Products (NGP) businesses, and with a strong portfolio of 'reduced-risk' products on offer, BATS looks well placed to keep delivering sustainable growth in the years to come. City analysts expect dividends of 202p and 218p per share this year and next.

The recent share price fall has lowered the forward-looking P/E ratio to just 13.4 - way below the valuation the stock was trading at when Neil Woodford sold his holding last year. At today's price, long-term value is on offer.

WPP

Another FTSE 100 dividend stock that has been beaten up this year is the world's largest advertising firm WPP(LSE: WPP). Year-to-date, the shares are down 16%. Over 12 months, they're down over twice that. Investors are concerned about the impact of technological disruption on the company's business model as well as the group's ability to grow as clients cut back on advertising spending.

While these are valid concerns, I believe the stock has been oversold. The extreme level of pessimism towards the sector has pushed WPP's yield up to a level that is hard to ignore, in my view.

Like British American Tobacco, WPP has an excellent dividend-growth track record. The firm has recorded eight consecutive increases now and has never cut its dividend. For FY2017, the group declared a payout of 60p per share, which at the current share price, is an excellent yield of 5.4%. This was covered by twice by earnings. Looking forward, WPP is targeting earnings per share growth of 5%-10% per year which should enable the company to keep lifting its payout, although dividend growth may be subdued in the short term.

With the shares now trading on a forward P/E of just 9.5, I believe this dividend champion offers strong long-term value.

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Edward Sheldon owns shares in WPP. 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.

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