2 cheap FTSE 100 dividend stocks! Should I buy them next week?

I am hoping to receive some funds which I will use to invest in other UK stocks. Did I buy this cheap FTSE 100 stocks to increase passive income?

Glencore

As the FTSE index rises in early 2023, the index’s miners are in for a more turbulent ride. Recent data from China suggests this blue-chip stock is about to rebound, prompting me to consider a buy Glencore (LSE:GLEN) shares.

China’s official purchasing managers’ index (PMI) rose to 52.6 in February, beating brokerage forecasts. Any reading above 50 indicates expansion and last month was the highest since 2012.

Factory activity is accelerating after the end of the pandemic lockdown at the end of 2022. This is a positive sign for commodity giant Glencore which produces and markets metal and energy products.

Today, the business trades at a forward price-to-earnings (P/E) ratio of 6.7 times. It also yields an impressive 9.5% dividend. I believe these readings make Glencore shares a good buy for value stock lovers.

Earnings in mining stocks can decline during economic downturns. But I expect profits here to slow as the energy transition needs a turbocharge for materials like copper.

Industry body CRU thinks demand for the red metal – a key profit driver for Glencore – will rise by 2.1% a year to 28.5m tonnes by 2030. In this environment, investors like me can make stunning returns.

Barclays

High bank Barclays (LSE:BARC) also offers an attractive combination of low earnings multiples and huge dividend yields. The company trades at a P/E ratio of 5.5 times for 2023 and yields 5.3%.

One thing I like about the company is that it is a very large investment bank. Compared to retail-only competitors such as Lloyds and NatWest, this makes it a higher risk for investors. But it also has the potential to generate higher returns than its competitors.

However, this is not enough to tempt me to consider buying Barclays shares. The UK economy was stumbling and the bank was experiencing a steady increase in bad loans. This results in credit impairments worth £1.2bn by 2022, £500m of which came in the last quarter.

There is also the big question of what the net interest margin (or NIM) will be. This measures the difference in banks charging borrowers to take loans and what they pay to depositors in interest.

For one thing, the Bank of England’s main policymakers seem downbeat about further interest rate hikes. Bank Governor Andrew Bailey said the additional increase was “not necessarily“. The deputy governor has commented that policy makers should “enguard against the possibility of doing too much“in the interest rate.

Second, there is pressure on banks to increase the rates they offer to savers. This week, the chairman of the Treasury Committee proposed that “Our biggest banks take advantage of the most loyal customers to increase profits and CEO pay“.

On balance, I would avoid Barclays shares and use the money to buy other UK stocks like Glencore.