Is this the best FTSE 100 dividend stock for 2023?

I see tech stocks as synonymous with growth. But this sector took a beating last year in the stock market. In fact, technology exposure is the worst part of any investment portfolio. In contrast, the prices of large dividend stocks like oil and mining giants, will increase in 2022.

It is my belief that money paid today is better than the promise of money tomorrow. Don’t get me wrong, I find capital growth interesting. But I also feel the need to be compensated more easily and more often for the risks I take in today’s volatile markets.

Dividend stocks in focus

For me, Glencore PLC (LSE:GLEN) is providing the kind of total return through 2022 that I want. I believe the company outperformed on several key metrics. The price has increased by 30% compared to FTSE 100 (1%). Dividend stocks also offer a strong dividend yield of over 4% – greater than the FTSE 100 average (3.6%).

In my experience, past performance is not an indicator of the future. However, I believe it is the same situation that allowed Glencore’s underlying business to thrive last year.

Rising commodity prices are one of the main reasons why price inflation will explode in 2022. The current outlook for inflation is a mixed picture, but an increase is not out of the question.

Glencore can continue to benefit from the situation. Especially considering how many different commodities there are. The company invests in everything from battery metals to nickel, copper and coal. From my point of view, all these commodities are doing well. Even if it doesn’t, Glencore’s trading business could benefit from commodity market disruptions. This is what happened last year when market disruption resulted in a 600%+ increase in annual revenue.

Headwind

However, the company has obvious headwinds that I have to consider as well. Many City analysts believe the dividend stock is reasonably priced compared to peers. There are also many forecasts showing a downward trend in profits over the next three years.

Does this stop me? No, I still think that Glencore’s history of consistent profitability will continue. This provides miners with a way to increase long-term value for shareholders. It has increased its dividend payout to shareholders by 38% over the past five years.

Dividend income is important

I see the trading environment for commodities as volatile. So I secretly expect Glencore to beat its mining peers because of its trading scale. The company has a clear desire to return excess profits to investors. The dividend is forecast to grow by 10% next year. I can still benefit in other ways if the dividend falls. For example, I can receive more cash back in the form of buybacks showing that I continue to share over a long run.

Glencore’s commitment to its shareholders is a very attractive feature. I believe that regardless of capital growth, Glencore will reward me with decent results throughout the holding.

The stock is not something I would buy right now. But certainly mining stocks are high on the short list for 2023.