Here’s why 2023 could be the best year ever for FTSE 100 dividend stocks

We’re heading into a recession this year, and analysts have lowered some of their views on dividend stocks. So how could 2023 be the best ever Does Footsie pay a dividend? It may not be likely, but as predicted it may happen.

In 2018, the FTSE 100 generated the largest dividend of all time, reaching £85.2bn. That fell when Covid-19 arrived. But on the way back. We don’t yet know how 2022 will turn out, although analysts expect it to be record-breaking.

However, according to AJ Bellquarterly Dividend Dashboard, Footsie enters 2023 with a forecast dividend of £85.8bn on the cards. And if that’s not enough, experts expect it to be £90bn by 2024.

In December, the FTSE 100 company also announced a share buyback totaling £55.2bn. I think we can see a good opportunity for investors to lock in some long-term passive income here.

the biggest payouts

Rising energy prices contribute to dividend expectations in 2023. BP has recorded the biggest profit in its 114-year history. And we have just seen record profits for shell also. Oil prices are down from their 2022 peak. But Brent Crude is still selling at a profit of around $85 per barrel (at the time of writing).

Shell has previously topped the FTSE 100 dividend table in terms of total payouts. After the dividend cut in 2020, it was thrown into the top position Rio Tinto. But now it’s back as a forecaster’s favorite in dividend-paying stocks.

Stock dividend

I’m not just looking for dividend stocks with the biggest yield. I also want to cover decent by earnings.

Glencore looks good, with a predicted dividend yield of around 8%. Cash is expected to be covered three times by earnings, providing a healthy margin of safety.

Glencore also has something else I’m interested in. It’s currently engaging in share buybacks, which tells you two things. One is that the company thinks that its own stock should be bought at the current price. And should help future yields, with payouts spread over less shares.

Buybacks

Barratt’s Development as well as repurchasing its own shares. The forecast yield is about 7.6% now and the stock recovers some of its losses in 2022. Cover by earnings may be a bit thin at around 1.5 times. But it is a long-term cash generator.

Then financial shares offer attractive yield potential with a fairly healthy cover. Lloyds Banking Group, for example, in a forecast yield of about 4%. And it looks like it should be covered three times.

Then we have insurance Legal & Generalwith a forecast yield of more than 7% and a cover of 1.8 times.

Verdict

These stocks all have their own risks. And I should check it out first before I buy it. But I have chosen them only to illustrate some of the FTSE 100 dividend stocks that look, on the face of it, like they could contribute to a new record year.