Have £1,000 to invest? Why I’d go for these unloved FTSE 100 dividend stocks

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If you’re a dividend chaser seeking true value, then FTSE 100 star Ashtead Group (LSE: AHT) is certainly worth a look, in my opinion.

Ashtead, which rents out equipment for the construction sector, was actually one of the Footsie’s worst performers in October as its share price ducked 21%. Such a painful sell-off can be explained by the escalating fears over what impact President Trump’s trade wars and Federal Reserve rate hikes would have on the US economy, a critical region for the business.

I would consider these risks to be baked into the company’s share price right now, given that it now trades on a forward P/E multiple of just 11.5 times (as well as a corresponding sub-1 PEG reading of 0.4).

In fact, City analysts certainly aren’t wholly concerned right now, and they expect Ashtead’s long run of double-digit-percentage earnings increases to continue through to the end of next year, at least. The number crunchers have actually been upgrading their rises of 31% and 14% are predicted for the years to April 2019 and 2020, respectively.

They expect the firm to keep raising the dividend at a rate of knots as well. Last years’ 33p per share reward is anticipated to rise to 37.6p this year, and to 40.7p next year. Yields sit at a handy 2% and 2.1%, respectively, and given the likelihood that earnings should rip higher beyond the medium term — helped by the firm’s voracious appetite for acquisitions — I believe Ashtead should remain one of the hottest growth dividend stocks on the Footsie.

Dividends on the up

Another cut-price income hero worth serious attention today is Hargreaves Lansdown (LSE: HL).

Its own share price backslid 16% in October, despite the release of positive trading details in that time. It might still command a lofty valuation despite this weakness, the business sporting a forward P/E ratio of 33.6 times. But given the breakneck pace at which earnings have sprung higher in recent years, and are likely to continue doing so — another 14% advance is predicted for the 12 months to June 2019 — the financial services play is fully deserving of a high rating, in my opinion.

I’ve lauded Hargreaves Lansdown’s broad range of services in past times as a reason to expect it to thrive in an environment where savers are becoming more and more savvy, in the way they put their money to work. There’s clearly a lot more business to be won, like in the cash marketplace where, thanks to recent product improvements, the firm now has some £100m worth of assets under management.

The investing specialist has all the tools to keep growing profits and thus dividends, and the number crunchers share my optimism on the latter point, too. Thus fiscal 2018’s total dividend of 40p per share is anticipated to rise to 44.6p, a figure that boasts a chubby 2.3% yield. If you’re looking for a share that can continue growing dividends long into the future, I don’t think you can go wrong with Hargreaves Lansdown.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Hargreaves Lansdown. 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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