7%+ yields! Should I buy these FTSE 100 dividend stocks for passive income in 2023?

This FTSE 100 shares offer a comfortable yield north of the index of 3.5% on average. Should I buy it for my investment portfolio?

British American Tobacco

Companies whose products have strong brand power can offer good protection to investors. These businesses can raise prices to offset cost pressures without a significant loss of revenue.

British American Tobacco (LSE:BATS) is one of those stocks that can be considered a market leader. This includes the eternal tobacco products like Lucky Strike, camel and Pall Mall. However, I do not intend to invest in FTSE 100 companies in the near future.

Even the overwhelming demand for non-burnable products tempts me. Sales of next generation technology like Vuse e-cigarettes will grow by 40.9% in 2022 to £2.9bn.

I believe the uncertain outlook for the industry makes British American Tobacco too risky. Bans or restrictions governing the sale, marketing and use of tobacco continue to increase. And legislators are turning their attention to vaporizers and similar products.

Last June, for example, the US Food and Drug Administration banned all electronic cigarette maker Juul’s products from shelves in the country. This reflects the body’s concern about the increasing number of teenage vapers. Regulators and legislators are also getting tougher in other parts of the world.

British American Tobacco’s share price remains in a long-term downtrend. And I see no reason to expect it to come out of this slide. Therefore, I would like to avoid the business despite its forward dividend yield of 7.8% and a low price-to-earnings (P/E) ratio of 8.5 times.

Taylor Wimpey

Housing is an industry with a more secure long-term future. That’s why I continued Taylor Wimpey (LSE:TW) shares in my portfolio.

The UK housing market is in a painful downturn at the moment. The latest national data shows average property values ​​fell at their fastest rate in 11 years in February.

But I think the prospects for Taylor Wimpey and co remain strong for a long time. Steady population growth, combined with the failure of successive governments to increase housing activity, means that businesses need to generate strong profits as the economic cycle improves.

Does this mean I will buy more stocks to increase my passive income in 2023? The answer is no.

City analysts expect Taylor Wimpey to pay an annual dividend this year. But the weak dividend cover and bleak market outlook mean the final payout could disappoint investors.

The business announced last week that “our reservation rate is significantly lower than in the new year.” The forward book fell quarter-on-year to 7,499 homes as of December 31. The balance sheet remains strong but the business can improve cash conservation if the market worsens.

I think there may be better high yielding UK stocks to buy for dividend income this year. So for now, I’ll leave Taylor Wimpey on the shelf alongside British American Tobacco.