A FTSE 100 dividend share I’d but to hold for 7 years!

I am looking for the best FTSE 100 stocks to generate long-term passive income. Discount retailers B&M European Value Retail (LSE: BME ) is one of the UK blue chips I’d like to buy for dividend.

Giant discount

Rising labor costs seem likely to continue to hurt retailers’ profits. Last month, Aldi increased pay for the fourth time in a year and may be the biggest increase in the sector.

However, I believe the bright profit prospects for food and general merchandise retailers are still worth noting. That’s why I bought B&M stock for my portfolio.

As the name suggests, these FTSE 100 stocks are concentrated at the budget end of the market. This is a segment that continues to grow rapidly, as Aldi and Lidl have illustrated over the past decade.

B&M’s own sales rose 12.3% in constant currency in the 13 weeks to December 24, its latest financial report shows.

short-term boost

This long-standing trend reflects changing consumer demands and the increasing importance of value in the minds of shoppers. But the likes of B&M have also benefited more recently from the impact of high inflation on household budgets.

The Bank of England expects moderate inflation in the second half of the year. But retail industry experts remain cautious about when food inflation – which rose to a 46-year high of 18.2% last month – will begin to recede.

Tesco chairman John Allan told the BBC at the weekend that “most people expect there will be some easing of inflation [but] I would not be brave enough to predict how much and when.”

He added that inflation tends to decrease. However, the comments fueled speculation that sales at value retailers could be better than expected in the near term as shoppers try to stretch their budgets as much as possible.

Another special dividend?

Thanks to strong recent trading, B&M has paid a special dividend to shareholders. In fact, it announced many additional prizes in recent years. And in February announced plans for more 20p pay-off.

City forecasters do not expect special dividends, at least in the short term. But he also didn’t predict more extraordinary payouts earlier this year.

Given B&M’s bright outlook I expect another big dividend could come down the line. Retail values ​​in the UK have more to climb. And this business is evolving to fully exploit the opportunity.

This brings the number of B&M stores in Britain to 705 by the end of 2022, up from 693 a year earlier. And the number of Heron Foods stores increased by five during that time, to 315.

Today, the retailer yields a 3.9% forward dividend, just above the FTSE index average. But given the chance of extra dividends I think this could be a great stock to buy for passive income.