I am keen to go shopping for dividend stocks, as share valuations fall and yields rise. There are so many tempting income shares on the FTSE 100, I’m having trouble making my choice. The following three jump out, though.

To offer some respite against current volatility, I would consider buying dividend aristocrat National Grid (LSE: NG). It looks cheap today, with the share price falling 25% in the last six months. That has depressed its valuation to just 14.8 times earnings.

I do not expect much share price growth from National Grid. Its stock still trades at roughly the same level it did five years ago, while earnings are tightly regulated. But it has offered a solid income stream for years, and today the yield is a healthy 5.6%. That kind of income offers me some protection against today’s raging inflation.

Dividend stocks fight inflation

Trading has been solid so far this year with revenues been boosted by the strong US dollar. The group owns gas and electricity distribution across the Northeastern US and these revenues are worth more once converted into pounds.

Rising interest rates pose a problem for many sectors but banking is a rare exception. Higher rates allow them to widen net interest margins, the difference between what they charge borrowers and pay savers.

I’m turning my attention to NatWest Group (LSE: NWG), which now trades at just 9.3 times earnings after falling almost 10% in the last month. Again, long-term share price performance is underwhelming, as it is down 5% over five years. However, its 4.93% yield should keep me happy while I wait for its shares to recover.

Results have been good lately, with pre-tax profits jumping 13% to £2.6bn for the six months to 30 June. Management now expects a full-year return on tangible equity of 14%-16%, up from prior estimates of 10%. A recession and house price crash would hit customer confidence and increase debt impairments, but that risk is reflected in the low share price.

This stock really excites me

My final and perhaps most exciting dividend stock is consumer goods giant Unilever (LSE: ULVR). I’m excited, because the stock trades at around 17 times earnings, when its valuation is usually closer to 25 times.

Similarly, the yield is now 4.43%, when I’m used to seeing it closer to 2.5%. The reason for these figures is that the Unilever share price has floundered, falling 3.75% over one year and 11% over five years.

Management has struggled to get a grip on poor performance, but now there are signs of a turnaround.

Its new business unit structure should cut costs and speed growth, and analysts at Berenberg recently hiked its share price target from £40 to £48 as a result. It currently trades around £39. Again, I’m not expecting a sudden share price spike — these are uncertain times. I appreciate the risk of investing in Unilever when its customers are feeling squeezed, but here’s why I’d still buy it.

I’m treating all three of these dividend stocks as long-term buy-and-hold investments. Today’s low valuations make now a good entry point.

The post These 3 dividend stocks are top of my shopping list appeared first on The Twelfth Magpie.

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Harvey Jones doesn't hold any of the shares mentioned in this article. The Motley Fool UK has recommended Unilever. 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.

Earnings results are a great way for investors to judge a company. They’re used to determine whether companies are on track with their initial guidance. These results can often radically move share prices in either direction, depending on the numbers reported. So, here’s an earnings preview for three FTSE firms reporting results this week.

The usual approach is to compare firms’ new numbers to those from prior years. But certain revenue figures may have been impacted by the pandemic, so it’s important to get context from pre-pandemic levels too. It can also be useful to consider whether a company can perform better than its previous year’s numbers, or if it can beat analysts’ annual forecasts. Analysts in the UK don’t always publish earnings previews for quarterly or half-year periods, but given their popularity, the shares covered below are exceptions. All of them have financial years that end in December.

Rio Tinto (H1 Earnings)

Rio Tinto (LSE: RIO) is an Anglo-Australian multinational company. It’s the world’s second-largest metals and mining corporation. The FTSE 100 firm’s main export is iron ore. Rio is set to reveal its H1 numbers for its six months performance ending June on 27 July.

Its earnings preview seems to indicate a slowdown in both its top and bottom lines. This is most likely due to the perpetual lockdowns in China that have been limiting construction activity. China is the group’s biggest customer, hence the gloomy forecasts. That being said, a sudden change in health policy in China could see Rio edge closer to its FY21 figures and could spell a healthy jump in its stock.

Barclays (Q2 Trading Update)

Barclays (LSE: BARC) is one of the UK’s biggest banks. It operates in many countries across the globe, and also operates an investment banking division. The bank is expected to disclose its Q2 figures for its three-month performance ending June on 28 July.

Analysts covering Barclays are expecting the bank to improve on its total income marginally this half, on a year-on-year basis. However, its most recent earnings per share estimate has been downgraded from 7.6p in the last week. The increase to its top line is most likely due to the effects of higher interest rates. Nonetheless, a decrease in investment banking activity from the current bear market is going to cause its bottom line to suffer. But if the dual-listed stock surprises investors with better than expected figures, a rally could be a possibility.

NatWest (H1 Earnings)

NatWest (LSE: NWG) is another UK bank reporting results this week. The group operates a wide variety of banking brands, offering personal and business banking, private banking, insurance, and corporate finance. It’s scheduled to unveil its H1 earnings for its six months performance ending June on 29 July.

Just as is the case with its sector peer, analysts are expecting the same trend. Alongside that, investors in its shares and the wider stock market will be paying attention to its remediation figure and number of late-stage loans to determine whether the UK is heading for a recession. The former is essentially the amount of money allocated as a buffer to cover potential defaults from customers.

The post Earnings preview: Rio Tinto, Barclays, NatWest appeared first on The Twelfth Magpie.

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John Choong has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays. 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.