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I’m looking for the best FTSE 100 dividend stocks to boost my long-term passive income. So which of these high-yielding UK stocks should you buy in 2023?
NatWest Group
He NatWest Group (LSE:NWG) share price has skyrocketed over the past three months. However, at current levels the FTSE 100 bank still offers excellent overall value, at least on paper.
The company offers a dividend yield of 5.5% for 2023. And it trades with a forward price-earnings (P/E) ratio of 6.5 times.
The higher rates could give a big boost to the bank’s earnings in 2023. City analysts believe the Bank of England will raise its benchmark an additional 0.75% or 1% to peaks above 4% this year. .
This would allow NatWest to earn better returns from its lending activities. But I’m not tempted to buy the bank’s shares in 2023. This is mainly because it could face a wave of bad loans as the UK economy falters.
Data from the Bank of England last week showed lenders expect a sharp rise in defaults on collateralized loans to households over the next three months. A net score of 44.3 lenders is significantly higher than the previously recorded 13.9 for the first quarter of 2022.
NatWest could also face prolonged earnings pressure if the UK suffers a prolonged recession. Structural problems in the national economy could weigh on GDP in the future. Established banks like this are also facing depressed revenue growth as challenger and digital banks up their game.
glencore
In general, I prefer to buy FTSE 100 dividend shares glencore (LSE:GLEN) for my investment portfolio.
Commodity deals like this also expose investors to risk in 2023. More specifically, mining companies’ profits are in jeopardy due to high Covid-19 cases in China.
The country’s economy grew just 3% in 2022 due to pandemic-related shutdowns. This was down dramatically from 8% the year before. Lockdowns have been relaxed more recently, although a sudden readjustment could be possible if infections rise again.
However, as a long-term investor I still think Glencore shares are very attractive. And I think their excellent overall value makes them a great investment. The business trades with a forward P/E ratio of just 6.2 times and has a dividend yield of 8.3%.
You see, I expect Glencore’s stock price to soar as the commodity supercycle accelerates. The company sells and markets a wide range of industrial metals and energy products. This gives you exposure to multiple high-growth sectors such as renewable energy, construction, and consumer electronics.
Take copper, a major earnings driver for the FTSE 100 firm, as an example. Analysts at Goldman Sachs I think there will be a red metal supply gap of 8.2mt by 2030 due to rising demand and weak mine development.
The same supply and demand imbalances also look likely for many of Glencore’s other markets. And I think this could drive the company’s earnings, and by extension shareholder returns, much higher.
