2 UK stocks I own for big dividends

As a veteran value, income and dividend investor, I’m always looking for new stocks to buy. Ideally, I look for low-priced stocks that pay market cash dividends. Thankfully, there is no shortage of such blue-chip stocks FTSE 100 index.

Two stocks I own for juicy dividends

Even with a rise of over 6% so far in 2023, the FTSE 100 still looks good to me. Here are the two Footsie stocks I bought in 2022 to add another dividend to my family portfolio.

Legal & General

Legal & General Group (LSE: LGEN) is a UK-based provider of life assurance, savings and investments. The group has more than 10 million customers and manages more than £1.3trn in assets.

After working in this industry for many years, I have long been an admirer of this famous brand. And L&G stock doesn’t look worth it to me right now. Here’s the basics:

Despite its 52-week low, L&G shares are down more than ten in 12 months. But they trade on an earnings yield of 13% – almost twice that of the FTSE 100 as a whole. In addition, the dividend yield of 7.2% a year looks rock-solid, which is guaranteed over 1.8 times by earnings. And L&G didn’t even cut those cash payments during the 2020 Covid-19 crisis.

Then again, L&G’s future earnings, cash flows and dividends are directed towards the value of its financial assets. If the market rises again, L&G’s share price could suffer. Even so, I’d be happy to buy this cheap stock today – if I didn’t already own it, that is.

Vodafone

Like L&G, The Vodafone Group (LSE: VOD) is a household name in the UK. Also, it operates in more than 30 other countries around the world, including Germany, Italy, Spain and South Africa. Worldwide, it has more than 300 million mobile subscribers and 27 million fixed broadband subscribers.

In Europe, Vodafone is and remains the largest mobile network operator. But despite this market strength, Vodafone’s share price has been in decline for years. It has more than halved (-53.7%) over the past five years and reached 52 weeks in December.

Then again, after a steady decline in price, the stock is now paying a market-shattering dividend. Here’s the basics:

While the shares trade in earnings similar to the FTSE 100 (about 7%), they offer a very generous dividend. Unfortunately, this cash yield of 8.5% per annum is not guaranteed by the back yield. In fact, only 84% of these payments are currently guaranteed. In short, there may be some risk until the group’s results improve.

Despite concerns about Vodafone’s dividend, my husband bought this stock in early December at 90.2p per share. We are buying in the hope that the prices coming in 2023 will help boost the group’s earnings. For me, the stock has been down a lot since 2021 and is ripe for a comeback. Therefore, we will sit back and collect dividends while we wait for the share price to recover!