3 dividend stocks from the FTSE 100 I see as bargains that you can buy right now

Hand holding pound notes

While the FTSE 100 has sprung back towards the 7,000-point marker in bubbly start-of-2019 trading, investor appetite for International Consolidated Airlines Group(LSE: IAG) hasn’t turned out to be as perky.

What a shame, I would argue. In my eyes the British Airways and Iberia owner is one of the greatest bargains in the blue-chip index, the company carrying a forward P/E ratio of 5.8x.

Fears over the health of the global economy, and thus demand for IAG’s plane tickets, may be deterring investors from taking the plunge today. But I am confident that the Footsie flyer can still enjoy strong profits growth in the near term and beyond, underpinned by its increasing foray into the budget travel segment and its aggressive route expansion programme. These steps helped the company move an extra 8m passengers in 2018, some 113m travellers choosing to fly on one of its aircraft last year.

Another dividend star

Right now IAG sports monster yields of 4.6% for 2019 and 4.9%, adding another string to its already-compelling investment case. And WPP (LSE: WPP) is another low-cost income share that’s worth serious consideration today, in my humble opinion.

For 2019 the advertising colossus carries a P/E ratio of 8.5x, and for this year and next it carries gigantic dividend yields of 6.7% and 6.8% respectively.

I’m not going to suggest that WPP doesn’t have its problems in the near term. Indeed, City analysts are predicting a second successive annual earnings drop this year, and recent research from Dentsu Aegis Network underlines how difficult conditions are likely to be, the communications giant predicting that growth will slow in 10 of the world’s 13 biggest advertising markets this year.

As I’ve said before though, I’m confident that steps the business is taking to reshape itself in the post-Sorrell age will deliver very decent profits growth in the near term. And its huge exposure to emerging markets, and rising exposure to the high-growth digital ad market, will help it to achieve this.

Drinks dynamo

It’s no surprise to see Diageo’s (LSE: DGE) share price springing back towards record highs in recent months as concerns over the health of the global economy have increased.

The drinks colossus is a lifeboat in troubled times like these. Its market-leading labels like Guinness, Captain Morgan and Smirnoff remain well bought, irrespective of broader pressure on consumers’ spending power, and this gives the company the confidence to keep raising dividends even in tough times.

This has proved the bedrock of Diageo’s long-running progressive payout policy, and City analysts predict that this generous approach will keep on running for the foreseeable future. Consequently the business carries inflation-beating yields of 2.5% for the 12 months to June 2019, and 2.7% for next year.

Now Diageo doesn’t boast the cheap ‘paper’ valuations of WPP and IAG, but this didn’t deter me from buying into the share last year. Instead, I believe that its prospective P/E multiple of 21.7x is a small price to pay given its great growth record and exciting sales opportunities across the globe, and I believe that it’s a white hot buy today.

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Royston Wild owns shares of Diageo. The Motley Fool UK has recommended Diageo. 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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