Why I'd invest £1,000 in FTSE 100 dividend stock St. James's Place today

While the FTSE 100 index is home to a number of dividend stocks, some clearly have more momentum than others at present. Today, I'm looking at two dividend stocks that I believe could be worthy of a £1,000 investment right now.

St. James's Place

Wealth manager St. James's Place(LSE: STJ) offers bespoke face-to-face financial advice to individuals, trustees and businesses, through a network of around 3,700 qualified advisers. Despite the rise of software-based 'robo-advice' in recent years, the demand for personalised, trusted financial advice shows no sign of slowing down due to the complexities of today's financial environment. And the firm looks well placed to capitalise.

A trading update released this morning suggests that the group enjoyed strong momentum for the first three months of the year, despite the financial market volatility we have experienced since late January. The firm benefitted from net fund inflows of £2.6bn for the quarter, up 31% on the same period last year, and retention of client funds was strong at 96%. Group funds under management climbed to £89.9bn, up from £79.8bn this time last year.

CEO Andrew Croft was upbeat about the future. He said: "We continue to see a growing market for trusted face-to-face financial advice and believe St. James's Place remains ideally placed to meet this need." The group's objective is to achieve 15%-20% growth in gross inflows during 2018 and beyond.

The business has an excellent record of rewarding its shareholders with dividends. The wealth manager has paid a dividend every time for over 20 years now, and with the exception of the period between 2002 and 2003, has always lifted its payout. Last year, the group declared a dividend payout of 42.9p per share, which equates to a trailing dividend yield of 3.8% at present. Looking ahead, City analysts expect 13% dividend growth this year, taking the prospective yield to 4.3%.

The shares aren't particularly cheap, trading on a trailing P/E ratio of 21.1, however, I believe that's a fair price to pay for a slice of this high-quality business.

easyJet

When studying Warren Buffett's portfolio recently, one thing I noticed was a sizeable allocation to airlines. Buffett owns shares in Delta, American Airlines, and Southwest Airlines and that got me thinking about airline stocks here in the UK. Could easyJet(LSE: EZJ) be the best way to play this theme?

It hasn't had the best run over the last couple of years. Issues such as Brexit uncertainty, currency fluctuations, fuel costs and the impact of terrorism have all taken their toll on profitability. Earnings dipped significantly last year and the group cut its dividend by 24%. However, recent updates from the company have been positive, so could easyJet be on the cusp of a turnaround?

Analysts' estimates for this year certainly look promising. Revenue and earnings per share are anticipated to climb by 12% and 24% respectively this year, with EPS of 102p currently expected. Given that the group's policy is to pay out 50% of earnings, that means that the dividend could potentially jump from 41p per share last year to 51p per share this year. At the current share price, that equates to a yield of 3.2%.

The shares have bounced 25% over the last six months, however, the current valuation (forward P/E of 15.8) doesn't look stretched. I think now could be a good time to take a closer look at the stock.

Buy-And-Hold Investing

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Edward Sheldon owns shares in St James's Place. 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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