Why I’d buy cheap FTSE dividend shares now

first_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. tezcang has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Britvic, GlaxoSmithKline, and Unilever. The Motley Fool UK has recommended Greencoat UK Wind, Pennon Group, and Tesco. 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. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Tezcan Gecgil, PhD | Friday, 15th May, 2020 So far, May is proving to be another volatile market for broader stock indices. Therefore today, I want to look at how Britons can potentially give a boost to their long-term portfolios by investing in robust dividend shares.Why stock markets and dividends existMost investors realise that all investments carry some risk. Fear and greed are two elements of human nature that tend to affect short-term moves in share prices. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…If stocks suffer large losses for a sustained period, or fall fast like they did earlier in the year, then markets usually become fearful. In times like those, it is important to remember why equity markets, which I believe serve the wider economy well, actually exist.By listing in an index, a company can raise capital to grow its business. Instead of borrowing money from a financial institution such as a bank, a firm can instead sell shares to investors. And a stock, or a share, represents part ownership of a given company.There are two ways most retail investors can make money from their stock investments.First of all, if they sell their shares at a price higher than the purchase price, then they make a profit. Also, if the company pays dividends annually from the profit it makes, then a long-term shareholder would receive that payout. Company boards set payout schedules and dividend dates. Especially since the dotcom boom that started in the late 1990s, it has become relatively easy to be ‘seduced’ by the prospects of large gains by investing in stocks that are regarded as high-growth. Although fortunes can be — and have been — made in many such companies, booms can easily be followed by busts.Therefore the City tends to regard companies that pay dividends as more stable than those that do not. Over the long term, their share prices tend to be less choppy too.On a historical note, companies have been paying out dividends for over four centuries. In 1602, the Dutch East India Company (VOC) became the first company to issue shares. which were traded on the Amsterdam Stock Exchange. And VOC was known for its high dividend payments.FTSE shares On 7 May, the Bank of England (BoE) decided to keep the main interest rate unchanged at 0.1%. The BoE website details the progressive decline of interest rates over several decades. As you can see, 0.1% is a record low.In the near future, no bank account will likely offer anything close to a real rate of return. Thus FTSE 100 or FTSE 250 dividend shares could be a good option for income investors. In 2019, their average dividend yields were about 4.5% and 2.8% respectively.Yet recent days have seen dividend cuts announced by a wide range of companies. But, with a bit of due diligence, investors can still find chunky dividend yields on offer. And prices of many these companies are a lot cheaper than they were in January.Seasoned investors look for value stocks that have robust earnings and dividend sustainability. There are several companies I’d consider buying, especially if there’s any further weakness in their share prices. In the FTSE 100, they include BAE Systems, GlaxoSmithKline, Pennon Group, Tesco and Unilever. In the FTSE 250, I like Britvic, Centamin, ContourGlobal, Greencoat UK Wind, and Tate & Lyle as potential long-term investments. Enter Your Email Address Why I’d buy cheap FTSE dividend shares nowcenter_img Our 6 ‘Best Buys Now’ Shares “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Image source: Getty Images. Simply click below to discover how you can take advantage of this. See all posts by Tezcan Gecgil, PhDlast_img read more