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I think these rock-solid FTSE 100 dividend stocks could prove to be great potential purchases in the current macroeconomic landscape. Each carries a dividend yield above the Footsie’s 3.8% forward average.
1. National Grid
Interest rates could remain at high levels throughout 2024 if inflationary pressures persist. This means National Grid may have to keep spending huge sums to service its large debts.
But, on balance, I think it’s a great income stock to buy for these uncertain times. Even if the macroeconomic conditions remain challenging, the essential nature of its operations mean it should still have the profits and cash flows to pay big dividends.
I also like National Grid because its industry monopoly eliminates the problem of competitive threats. For the financial years to March 2024 and 2025 its dividend yields sit at 5.9% and 6.1% respectively.
2. Bunzl
Support services company Bunzl lacks the huge yields of some other FTSE companies (for 2024, it sits at 2.3%). However, its exceptional record of dividend growth also makes it a worthy candidate for income. Shareholder payouts have risen for 30 consecutive years.
Like National Grid, demand for its services remains solid at all points of the economic cycle. It supplies a wide range of critical everyday products including food packaging, surgical gloves, hard hats and disinfectants.
Bunzl also spends large amounts on acquisitions to grow profits (and, by extension, dividends) over the long term. This strategy involves risk, but so far the company has a great track record on this front.
3. BAE Systems
Investing in defence companies like BAE Systems could be another safe play for next year. Even if the global economy worsens, the tense geopolitical situation means the firm can expect orders (which hit record levels in the first half of 2023) to keep flowing in.
Western arms spending has been trekking higher in recent years in response to Chinese and Russian foreign policy. And developments in the Middle East over the past week provide additional incentive for the US and UK to continue building their armed forces.
I’d buy BAE Systems shares even though project issue problems could hit revenues. It carries a decent 3% dividend yield for 2024.
4. Aviva
I’m also looking at buying more Aviva shares to make market-beating dividend income over the short term. Its yield for next year sits at a FTSE 100-topping 8.4%.
Financial services businesses like these have exceptional long-term growth potential. As older populations rapidly grow, demand for life insurance, pensions, equity release and wealth products should follow suit.
I like Aviva especially because of its strong position in many of these markets. It’s Britain’s number-one life and general insurance provider, and Canada’s second-largest general insurer.
Earnings could disappoint in the near term if economic conditions remain tough. But a strong balance sheet means Aviva shares should continue to deliver vast dividends to investors.
