Buying stocks that have been sold off in a stock market crash is risky, especially today. The economy faces a massive hit from Covid-19, and there could be more pain in the pipeline. However, history shows that buying shares at the moment of maximum uncertainty is a winning strategy.

Here are two risky stocks that could pay off. Buy them inside your Stocks and Shares ISA for tax-free returns, and look to hold for the long term.

Whitbread share price slump

The hospitality and leisure sector has been hit harder than most, with people locked down or banned from travelling, or nervously cutting back on their spending. Hotel and restaurant operator Whitbread (LSE: WTB) has inevitably had a tough time of it. Its share price fell by more than half in the stock market crash.

It has also failed to benefit from the recovery. While many FTSE 100 shares have posted healthy gains lately, the Whitbread share price still trades 4% lower than six months ago. 

At the height of the first wave, Whitbread axed its dividend and temporarily shut all Premier Inn hotels in the UK and Germany. Last month, it announced 6,000 job losses, almost one in five of its workforce.

Whitbread, which also owns Brewers Fayre and Beefeater restaurants, trades at just 11.4 earnings today. This has alerted analysts at Berenberg, who reckon the current share price undervalues its real estate by half, leaving the group undervalued.

This is the type of opportunity investors should be sniffing out after a market crash. The Whitbread share price could fly out of the traps if, say, we get a vaccine or infection rates diminish. It’s a tempting buy, but risky given current unknowns.

Stock market crash opportunity

Property development and investment company British Land Co (LSE: BLND) also saw its share price fall by more than half in the stock market crash, with little recovery since. That’s despite announcing it was resuming its dividend payments earlier this month, as footfall and retailer sales picked up strongly.

British Land says its balance sheet remains strong, with £1bn of undrawn facilities and cash, with no requirement to refinance until 2024. It has collected 74% of June rents, 98% for offices and 57% for retail.

The pandemic has hit commercial property and bricks and mortar retailers as hard as the leisure and hospitality sector. If the pandemic worsens and unemployment rises, rents could be at risk. British Land has been investing heavily in central London office space, which hangs in the balance with the rise of home working.

These challenges are reflected in its valuation of 10.5 times earnings. You get a forecast yield of 3.7%. Like Whitbread, the British Land share price is cheap after the stock market crash, but comes with risks that some may found unacceptable.

The post Stock market crash bargains! I’d buy these 2 dirt-cheap FTSE 100 stocks in an ISA appeared first on The Twelfth Magpie.

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• With a 5.8% yield, how much is needed in a Stocks and Shares ISA for £1,000 of monthly passive income?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended British Land Co. 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.

The FTSE 100 property developer and investment company’s share price is up more than 6% this morning on better-than-anticipated full-year results. It looks a real bargain, as the estimated value of its office blocks, shopping centres and residential developments are around twice the actual share price.

Stock market crash bargain

British Land is under a three-pronged attack. Investors fear the rise of homeworking will hit demand for office space. They worry about the impact of the lockdown on physical retail. The fate of the residential property market is also uncertain.

Today’s results show the value of its portfolio falling 10% to £11.16bn in the year to 31 March, with retail sites down by a quarter. The group posted a £1.11bn loss after tax, but was struggling even before the stock market crash. Last year, it lost £320m.

Chief executive Chris Grigg admitted the trend towards flexible work may accelerate. However, potential customers are carrying out virtual viewings, and the group is “encouraged by negotiations.” Retail will be more of a struggle. British Land collected just 68% of March rent, a healthy 97% for offices, but just 43% for retail.

With luck, a large chunk of that unpaid rent has been deferred rather than lost for good. The danger is that tenants go bust as the stock market crash rolls on. However, British Land enjoys significant headroom over its covenants, and has access to plentiful liquidity.

The group suspended its dividend in the stock market crash to conserve cash. Today, management said it would restart payouts “as soon as there is sufficient clarity of outlook.” That’s a vague promise, but at least the board’s showing willing.

I’d buy FTSE 100 bargain British Land today

The advantage of having a widely-diversified portfolio is that some areas may hold up while others struggle. This is the case here, with rental collection and valuations at central London offices surprisingly positive. Also, I suspect the trend towards homeworking may have been overdone, as workers want to get out of the house again.

The big attraction of British Land is that the share price has fallen much faster than the value of its underlying assets. Right now, this real estate investment trust (Reit) is trading at a discount of 55% to net asset value. That’s why we like buying shares in a stock market crash. It throws up opportunities like this one.

It’ll be a bumpy road to recovery, so you’ll need to hang on for the long term. With that in mind, I’d consider buying British Land today.

The post Stock market crash: could this dirt-cheap FTSE 100 stock help you get rich and retire early? appeared first on The Twelfth Magpie.

More reading

• Here are 2 FTSE shares I’m excited about this July — and 1 I’m avoiding
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• FTSE 100 to surge to 11,668! 2 cheap stocks to buy before the rally
• With a 5.8% yield, how much is needed in a Stocks and Shares ISA for £1,000 of monthly passive income?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended British Land Co. 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.

It pays to be careful with very high dividend yields. But I think I’ve found a handful of FTSE 100 stocks that offer truly outstanding buying opportunities for patient investors.

Today, I want to look at three of these businesses, including two I’ve been buying myself.

Final chance?

I’ve been backing Royal Bank of Scotland Group (LSE: RBS) for a while now and own shares in the bank myself.

For many investors, RBS remains the bank they love to hate. This may have been fair five years ago. But I think the business today is more attractive than it has been for many years.

Departing chief executive Ross McEwan has fixed the bank’s legacy problems, made it profitable again and restarted dividend payments.

Today, the shares trade at a 20% discount to book value and offer a forecast dividend yield of 6.6%. I believe this valuation leaves plenty of room for further gains, if performance continues to improve.

A second opportunity may come when the government finally sells its stake in the bank. This should increase private investor confidence in the stock, as it would remove the risk of political interference.

Mr McEwan will be leaving for a new job in Australia over the coming months. But I believe UK investors have a great opportunity to benefit from his hard work at RBS. I rate the shares as a buy.

Time to be greedy

US billionaire Warren Buffett once famously advised investors to “be greedy when others are fearful”. Investors are certainly fearful of retail property landlords at the moment, such as FTSE 100 REIT British Land (LSE: BLND).

The fear is that even if new tenants are found to replace dying retailers, they will demand lower rents and shorter leases. Perhaps. But British Land has been in business for nearly 70 years and owns a mix of prime London office space and major shopping centres around the UK.

I think the quality and diversity of its portfolio, paired with good management, will mean a solution will be found to the changing needs of retail tenants.

In the meantime, the shares are trading at a 40% discount to their net asset value of 905p and offer a dividend yield of 5.9%.

I can’t predict where the bottom will be for the retail property market. But in my view, British Land is likely to offer good value and a decent income to investors buying at this level.

Power shifter

Gas and electricity network operator National Grid (LSE: NG) is what I’d call a slow burner. The shares are unlikely to double in the next few years. But the dividend has risen from 11.1p per share in 1997 to 47.3p per share today, without any disruption.

Shareholders aren’t completely dependent on the UK market either. The group now generates roughly half its profits in the USA, providing some welcome protection against the threat of nationalisation by a Labour government.

At about 830p, National Grid shares trade on 14 times forecast earnings and offer a dividend yield of 5.9%. I think this could be a good entrance point. If I didn’t already own shares in another utility, I would certainly consider adding this one to my income portfolio.

The post I think there’s never been a better time to buy these 3 FTSE 100 dividend stocks appeared first on The Twelfth Magpie.

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Roland Head owns shares of British Land Co and Royal Bank of Scotland Group. The Motley Fool UK has recommended British Land Co. 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.

However, this doesn’t mean that now is the right time to avoid buying FTSE 100 dividend stocks. In fact, valuations may become increasingly attractive if global economic risks remain high. As such, now could be the right time to buy these two large-caps that each offer income returns in excess of 5%.

British Land

Real estate investment trust (REIT) British Land (LSE: BLND) is undergoing a period of change at the present time. The company is seeking to shift the focus of its portfolio towards office, leisure and residential uses as demand for retail space continues to be uncertain. This trend is likely to continue as online shopping grows in popularity, and physical stores become a less obvious means for retailers to sell their products to the public.

While this transition may involve a degree of pain in the short run, British Land appears to have a sound strategy that could add value to its asset base over the long run. Moreover, its valuation suggests that investors have fully factored in the risks that it faces. The company currently has a price-to-book (P/B) ratio of just 0.6. This indicates that the stock is grossly undervalued, and could deliver capital growth in the long run.

With a dividend yield of 5.8%, British Land also has income investing potential. Although there may be other FTSE 100 shares that have faster dividend growth in the near term, the company’s mix of value and income investing potential could make it a highly appealing stock for the long term.

TUI

The travel and leisure industry has not been a popular sector among investors in 2019, with shares in TUI (LSE: TUI) declining by 29%. The company reported a challenging operating environment in its recent update, while the difficulties in the wider industry have been highlighted by the share price collapse of Thomas Cook in recent months.

Looking ahead, trading conditions may remain uncertain for TUI and its sector peers. Consumer confidence in the UK and across parts of Europe remains downbeat, while changing consumer tastes may also lead to added volatility in the company’s performance.

However, with TUI continuing to invest in the customer experience and in its digital offering, it could post improving financial performance as the cyclicality of the economy moves in its favour over the long run. Since it has a price-to-earnings (P/E) ratio of 6.5, it seems to offer a wide margin of safety.

Although there are more consistent performers in the FTSE 100, the company’s dividend yield of 9% suggests that it could offer impressive income returns for less risk-averse long-term investors.

The post 2 FTSE 100 dividend stocks with yields over 5% I’d buy in July appeared first on The Twelfth Magpie.

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• With a 5.8% yield, how much is needed in a Stocks and Shares ISA for £1,000 of monthly passive income?

Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended British Land Co. 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.

I agree that some stocks look overvalued at the moment. But I think the index also contains a number of potential bargains, with tempting valuations and generous dividend yields. If you’re interested in building a portfolio of FTSE 100 dividend stocks, here are my top picks for this summer.

No cuts since WWII

Oil and gas giant Royal Dutch Shell has not cut its shareholder dividend since the Second World War. That’s an impressive record that few companies can match.

To prepare for a lower-carbon future, Shell is now starting to position its oil operations for a long-term decline. Future growth will be biased towards gas and renewables.

In the meantime, this business is performing strongly and generating a lot of spare cash, much of which will be handed back to shareholders. Chief executive Ben van Beurden expects to return $125bn to shareholders between 2021 and 2025. That’s equivalent to a yield of about 50% of the current share price.

With RDSB stock trading on 12 times 2019 forecast earnings and offering a dividend yield of 5.6%, I rate Shell as a top income buy.

Moving pictures

Broadcaster ITV is out-of-favour with investors and battling falling revenues from broadcast advertising. But the firm’s online operations are growing rapidly and are starting to generate enough cash to replace lost revenue elsewhere.

Meanwhile, the ITV Studios business has been responsible for some of the biggest hits of recent years, such as BBC’s Line of Duty. Profit margins and cash generation remain strong.

The stock looks too cheap to me, on 8.3 times 2019 forecast earnings and with a 7.4% dividend yield. I think the firm could attract a bidder at this level, but I’m happy to hold for the long term.

Big pharma split

Pharmaceutical giant GlaxoSmithKline plans to split itself in two, leaving a consumer healthcare business and a specialist pharma operation. I believe this could help reduce debt and improve growth rates in both businesses.

The dividend looks stretched to me, but chief executive Emma Walmsley has promised to maintain the 80p payout for this year, at least. I believe pharmaceuticals are likely to remain a long-term structural growth story. I’m happy to keep collecting the 5% yield and await further progress.

A long-term bargain?

Brexit fears and difficult time for retailers have pushed shares in FTSE 100 landlord British Land down to less than 550p. That’s the lowest they’ve been since 2012. This sell-off has left the stock trading at a 40% discount to their net asset value of 905p per share.

In my opinion, this is just too cheap. British Land’s property portfolio is divided into prime London office space and multi-use developments, and major shopping centres around the UK.

Retail property values are falling, but I suspect that over the long term, demand for these assets will recover. In the meantime, I’m happy to accept the short-term uncertainty so I can collect the stock’s 6% forecast dividend yield.

The post My top FTSE 100 buys for a starter portfolio this summer appeared first on The Twelfth Magpie.

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Roland Head owns shares of British Land Co, GlaxoSmithKline, ITV, and Royal Dutch Shell B. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended British Land Co and ITV. 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.

As I explained fairly recently, however, such a strategy is a surefire way to get burned, and there’s many a FTSE 100 investment trap lurking to separate you from your hard-earned cash. Take British Land Company (LSE: BLND), for example, a share which yields more than 5% for the next couple of years, but one which is loaded with chilling levels of risk.

More bad numbers

Last time I covered the shopping centre operator, I referenced the British Retail Consortium’s most recent monthly footfall tracker which underlined the terrible conditions for retailers. Unfortunately for British Land, things seem to have got worse, not better, since then.

Physical shopper numbers (footfall) dropped 3.5% in the four weeks to May 25, data showed this week, the worst result for six years and reflecting, in part, the continued political and economic uncertainty created by Brexit.

British Land’s share price may have stabilised since the start of June, but I consider this a mere stay of execution. I fully expect it to sink to fresh multi-year lows sooner rather than later, as it battles the structural problem of online shopping as well as those aforementioned cyclical ones, and I’m prepared to look past its big dividend yields of 5.8% and 6% for fiscal 2019 and 2020, respectively.

Fresh financials last month illustrated the extent of the Footsie firm’s problems. The company announced it had swung to a pre-tax loss of £319m for the 12 months to March from a profit of £501m a year earlier. It also slashed the value of its retail assets by 11.1% year-on-year in a move which drove the value of the property portfolio 4.8% lower at group level.

Shop elsewhere

British Land is reducing the number of retail assets on its books. But this will take years to achieve and with the sector in such disarray, it’s concerning just how much it will get for these hived-off properties.

Besides, the business still plans to hold a substantial stake in the UK’s retail sector (affecting around a third of the group’s assets versus 45% as of today). And, of course, there’s no telling how the company’s office blocks and other assets will be hit as the impact of Brexit drags on the domestic economy.

As of pixel time, British Land deals on a forward P/E ratio of 15.5 times, a rating which I makes it far more expensive given the company’s uncertain long-term outlook and the strong chance of heavy earnings downgrades for 2019 and 2020 forecasts. Rather, I reckon a reading in or around the bargain-basement region of 10 times and below would be a fairer reflection of its profits picture.

Right now there’s a galaxy of terrifically-priced dividend shares to be picked up on the FTSE 100. I’m afraid British Land isn’t one of them. In fact it’s a share I think could cause some serious damage to your shares portfolio.

The post Warning! A FTSE 100 dividend stock I won’t touch with a bargepole appeared first on The Twelfth Magpie.

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• With a 5.8% yield, how much is needed in a Stocks and Shares ISA for £1,000 of monthly passive income?

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended British Land Co. 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.

By contrast, a number of FTSE 100 dividend stocks appear to offer impressive risk/reward ratios for the long term. In fact, within the property sector itself, there appear to be a number of potential bargains that could yield high income returns and capital growth, while also offering tax advantages when invested in through a Stocks and Shares ISA.

British Land

The recent pullback in the British Land (LSE: BLND) share price means that the real estate investment trust (REIT) has a dividend yield of around 6%. This suggests that investors are factoring in potential risks across the commercial property sector.

While this may be warranted as a result of the pressure that exists on retailers in particular, British Land is seeking to pivot towards office space and residential units over the medium term. This could reduce its reliance on retailers, and may provide it with a brighter long-term growth outlook.

Certainly, the outlook for the UK economy is highly uncertain at the present time. Weaker growth and the potential for downbeat consumer confidence could put greater pressure on a variety of industries. However, with British Land trading on a price-to-book (P/B) ratio of just 0.6, it seems to offer good value for money. This suggests that as well as a high income return, the stock may offer an impressive rate of capital growth in the long run.

Segro

While British Land may be adapting to a changing retail environment, warehouse provider Segro (LSE: SGRO) could benefit from an increasing shift towards online shopping. As consumers continue to use their computers and increasingly their mobiles to buy a variety of goods online, demand for large warehouses is forecast to increase. This could provide the company with a tailwind that allows it to generate improving financial performance in the long run.

While the stock’s current dividend yield of 2.8% may be significantly lower than many other FTSE 350 REITs, it has the potential to increase its bottom line at a relatively fast pace in the coming years. This could lead to a faster rate of dividend growth than among its sector peers, which could increase investor interest in the stock.

With Segro appearing to have a sound strategy and trading on a P/B ratio of around 1.1, it seems to offer a favourable risk/reward ratio. As such, it could offer higher returns than a buy-to-let investment, while also providing greater diversity and lower overall risk due to its range of assets and strong financial standing. Because of this, I think now could be a good time to buy it.

The post Forget buy-to-let! I’d buy these FTSE 100 dividend stocks in a Stocks and Shares ISA appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of British Land Co. The Motley Fool UK has recommended British Land Co. 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.

While I’m working full time, I’ll reinvest the dividends in more shares. When I start thinking about retirement, I plan to use the dividends to boost my income.

In this article I’m going to take a look at three FTSE 100 high yield stocks I’d buy for a ‘forever’ income portfolio, including two I already own.

A long-term cash machine

My first stock is the only one I don’t own. Phoenix Group Holdings (LSE: PHNX) is a specialist insurer which buys and runs closed books of life insurance policies from other insurers. This £4.7bn firm is a bigger business than you might think, especially after the acquisition of the Standard Life insurance business last year.

The only reason I don’t own Phoenix is that I already have shares in two other insurers. Otherwise I’d certainly be a buyer. This firm’s focus is firmly on cash generation and shareholder returns. For example, in 2018 it generated £664m of cash, an almost identical result to 2017.

About half of this cash was returned to shareholders, while the remainder will be used to maintain a strong balance sheet and perhaps fund further acquisitions. A similar result is expected in 2019.

Phoenix shares offer a dividend yield of 7.1%, which looks sustainable to me. I’d be happy to buy at this level.

Advertising turnaround

I invested in advertising group WPP (LSE: WPP) a little while ago, after following events last year and studying the latest set of accounts. In my view, newish boss Mark Read has made solid progress with his turnaround plans so far. He’s cut debt and is streamlining the business to address the fragmentation and duplication from which it was suffering.

Although some critics have suggested his plans lack ambition, I’d rather see a straightforward job done well here. WPP isn’t broken, in my opinion, so expensive plans to fix it could make things worse.

As one of the world’s largest advertising and marketing groups, I reckon this business will stay relevant despite the growth of internet advertising.

WPP’s latest accounts show good levels of cash generation and suggest to me the dividend should survive without a cut. With the shares trading on 9.5 times forecast earnings and offering a 6.3% yield, I think now could be a good time to buy.

An unloved bargain?

When you’re buying high yield stocks, you sometimes have to buy shares that the market is selling. That’s certainly true of FTSE 100 landlord British Land (LSE: BLND), which I bought recently.

The firm’s recent results highlighted a 5% fall in the value of the group’s property portfolio and a 6.7% fall in underlying earnings. Investors took fright at British Land’s exposure to the retail sector and sold the stock.

I’m not too concerned. In my view, the BLND portfolio of prime London office property and top tier shopping centres will remain attractive to major landlords. The company highlighted this, pointing out that like-for-like rental growth of £15m more than offset the impact of £14m in lost rent from troubled retailers last year.

At 530p, British Land now trades at a 40% discount to its book value of 905p and offers a yield of 5.9%. I remain a buyer and may add to my position in the coming weeks.

The post Building a second income? 3 FTSE 100 dividend stocks I’d buy and hold forever appeared first on The Twelfth Magpie.

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Roland Head owns shares of British Land Co and WPP. The Motley Fool UK has recommended British Land Co. 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.

By contrast, there are a number of FTSE 100 property stocks that could deliver high returns. Among them are housebuilders, as well as real estate investment trusts (REIT). Both categories of stocks could deliver high returns on low valuations.

Housebuilders

Housebuilders have continued to enjoy strong operating conditions in recent months. Demand for new homes has remained high – even though consumer confidence is low due to the uncertainty caused by Brexit. Although interest rate rises are expected over the medium term, the Bank of England retains a cautious stance on how quickly they will rise. This could provide continued strong operating conditions across the housebuilding sector over the coming years.

Despite their rising levels of profitability, FTSE 100 housebuilders such as Persimmon and Taylor Wimpey continue to trade on low valuations. For example, they both have price-to-earnings (P/E) ratios of 8 and yet are forecast to post positive net profit growth in the current year.

Certainly, there will be an uncertain period for housebuilders following the end of the government’s Help to Buy scheme. It has provided heightened demand for new homes, and has boosted profitability across the sector. But with it due to run until 2023, there could be continued high returns available for investors over the medium term.

REITs

Given the uncertain outlook for the UK economy at the present time, it is perhaps unsurprising that commercial property prices have come under pressure. While this trend may continue over the coming months, in the long run it could present an opportunity for long-term investors to capitalise on what may prove to be wide margins of safety.

FTSE 100 REITs such as British Land and Landsec could be obvious opportunities for investors to take advantage of low valuations in the commercial property sector. They trade on price-to-book (P/B) ratios of just 0.6 and 0.7 respectively, which suggests that they could deliver impressive returns in the long run.

Allied to this are dividend yields that stand at over 5% apiece. The two companies’ yields may in fact be higher than the yields that are available on buy-to-let properties following the rise in residential property prices in recent years. That’s especially the case when costs such as management fees and mortgage payments are deducted.

As such, from a value and income investing perspective, FTSE 100 REITs could deliver higher returns, as well as lower risks, than undertaking a buy-to-let. Alongside housebuilders, there are a range of opportunities within the FTSE 100 for investors seeking to invest in UK property.

The post Forget buy-to-let! Here’s how I’d aim to make a million from FTSE 100 property stocks appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of British Land Co, Landsec, Persimmon, and Taylor Wimpey. The Motley Fool UK has recommended British Land Co and Landsec. 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.

As such, now could be a good time to buy a range of dividend stocks. Here are two prime examples, with both stocks offering 5%+ yields as well as significant growth potential in the long run.

British American Tobacco

The tobacco sector has been highly unpopular over the last few years, with investors becoming increasingly cautious about falling global cigarette volumes. British American Tobacco (LSE: BATS) has also been impacted by the prospect of tougher regulations in its key US market, where it has been mooted that legislation regarding nicotine levels may be passed over the medium term.

As a result, the stock has declined by 27% in the last year. this means that it now trades on a price-to-earnings (P/E) ratio of just 9.3. This is exceptionally low, with the stock having had a rating of nearly double that amount in recent years.

With the popularity of reduced-risk products continuing to increase, the future for British American Tobacco may be more positive than investors are currently pricing in. Since the stock has a dividend yield of 7.3% from a payout that is covered 1.5 times by profit, its income investing potential seems to be appealing. As such, even though it is highly unpopular, now could be a good time to buy it.

British Land

As uncertainty regarding the UK’s economic future has remained high in the last couple of years, commercial property stocks such as British Land (LSE: BLND) have seen their share prices come under pressure. In the last year, for example, the real estate investment trust (REIT) is down by 10%. This means that it now trades on a price-to-book (P/B) ratio of 0.6, which indicates that it offers a significant margin of safety.

Of course, the London property market is weak at the present time. It could continue to see falling prices over the medium term as Brexit causes investors to adopt a cautious mentality. However, in the long run London and the rest of the UK continues to offer growth potential, while investors may have factored in the risks that the stock currently faces.

Since British Land has a dividend yield of 5.3%, it continues to offer an impressive income outlook. As ever, the property market works in cycles. At the present time, it is experiencing a downturn that could last for a number of months. However, from a long-term perspective it is during such periods that the most appealing buying opportunities generally arise. As such, now could be a good time to buy the stock.

The post 2 buy-and-hold FTSE 100 stocks yielding 5%+ I’d invest in right now appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of British American Tobacco and British Land Co. The Motley Fool UK has recommended British Land Co. 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.