Should you boost your State Pension with these dirt-cheap FTSE 100 dividend stocks?

Senior couple at the lake having a picnic
Senior couple at the lake having a picnic

If you’re not squirrelling cash away to help finance your retirement then you’re setting yourself up for a pretty hard fall. With the age at which you can finally claim the benefit climbing, and Brexit throwing a further spanner in the works for all current and future retirees, it’s quite possible — nay, probable — that you’ll end up living on a miserly income without the aid of financial markets.

We here at The Motley Fool believe that the best way to create a handsome nestegg for retirement is by participating more specifically in stock investing. 2019 may present big challenges for share markets but there are still plenty of great stocks out there that have what it takes to make you a fortune now and in the years ahead.

A delicious dip-buying opp

One such company is FTSE 100 veteran BAE Systems(LSE: BA). The weapons builder has been on the defensive during the latter half of 2018, its market value shrinking almost 20% since the turn of June and which caused it to sink to levels not seen since November 2015. Investor nerves have been jingled particularly badly by the killing of Saudi journalist Jamal Khashoggi in October, allegedly by a hit squad from the desert kingdom in an act that has caused many to worry about future arms sales between the UK and its Middle Eastern ally.

This is of course a concern, but not one which merits the sort of sell-off we’ve seen of BAE Systems’s stock. As I noted last time out, the chances of an arms sales moratorium between the two nations remain extremely slim. And in my opinion, the Footsie firm’s low, low forward P/E ratio of 10.7 times fails to reflect this remoteness.

In actual fact I would consider that this cheap rating makes now a terrific time to buy into the defence giant. There will never be a time when BAE Systems’s broad range of weapons, cyber technologies and land, sea and air vehicles are no longer needed, so predictable is mankind’s need to fight wars. And the company’s strong relationship with the US and UK militaries puts it in the box seat to ride this theme.

Throw big dividend yields of 4.9% and 5.1% for 2018 and 2019 into the equation and I reckon BAE Systems is a great share to load up on.

The 6% yielder

Another FTSE 100 share I reckon could help you build big profits in the years ahead is TUI Travel (LSE: TUI).

Like the defence firm mentioned above, it trades on a bargain-basement prospective P/E multiple, in this case at 9.4 times predicted earnings. It also carries an inflation-stripping dividend yield, at 6.2% for the 12 months to September 2019.

I like TUI Travel given the rate at which it is grabbing customers, with numbers up 4.7% in the last fiscal year. As it builds its fleet of cruise ships, builds its new hotel pipeline and adds to its destination list I believe it remains in great shape to keep growing profits in the current year and beyond, too. I’d happily buy the travel titan today in expectation of lovely long-term returns.

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Royston Wild has no position in any of the 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.