2 FTSE 100 dividend shares I might buy for passive income!

Here are two FTSE 100 dividend stocks I’m considering buying for my portfolio today. I think it can be a long-term source of passive income.

persimmon

I am considering increasing my holdings in UK housebuilding stocks. and persimmon (LSE: PSN) – due to its 6.4% dividend yield – is close to my shopping list.

Investing in these highly cyclical stocks is risky as the UK economy struggles. A surge in unemployment could cause home sales to drop sharply. So it may be affected by additional interest rate hikes to reduce inflation.

But there are signs that the housing stock selloff late last year may be over. As a result, taking Persimmon shares can be a good buying opportunity.

Recent data shows that the housing market is doing better than analysts and economists had predicted. So profits and dividends in residential property builders beat all expectations.

Data from Move right today shows the average home value rose 0.8% (or nearly £3,000) in March. This adds data”pointing to a more stable market than anticipated and cautiously moving towards a more normal level of market activity in 2019.”

In addition to the large dividend yield, Persimmon’s share price carries an unexpected price-to-earnings (P/E) ratio of 10.8 times at current levels. These numbers could make it one of the best FTSE value stocks out there.

United Utilities Group

Water supplier United Utilities Group (LSE:UU.) do not sacrifice the power of Persimmon. For the new financial year that started in April it was at 4.7%.

But I am considering buying a utility business for passive income. That dividend yield still beats the FTSE 100 average of 3.7%. And what’s more, the dividend forecast here is stronger than that of other blue-chip stocks.

This is because of the important services that companies like United Utilities provide. Regardless of the difficulties in the economy more can expect profits to continue to flow. It has the means and confidence to pay above-average dividends every year.

These defensive operations also provide a better opportunity to generate sustainable dividends. The company’s policy under current regulatory rules is to increase payments in line with CPIH (consumer price inflation plus housing costs) until fiscal 2025.

I must mention that the dividend can be risky if the regulator decides to clamp down on shareholder rewards in the middle of rising criticism over utilities’ actions.

Today Ofwat set out new rules that could limit or even prevent investor payouts. It says that “Water companies must take stock of performance for customers, the environment, and the overall financial health of the company” when deciding the dividend.

However, I believe United Utilities remains well positioned to continue paying a good dividend. It has a strong credit rating of A3 Moody’s and BBB + with Standard and Poor. The company has also maintained a four-star environmental rating with the Environment Agency.

Like Persimmon, I think the water supplier could be one of the best buys for dividend income.