Investing £15k in these 3 cheap FTSE 100 stocks would give me income of £1,196 a year

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For buyers who like to generate excessive ranges of dividend revenue, as we speak’s FTSE 100 shares are a marvel to behold, with a dozen blue-chips yielding greater than 7% a 12 months.

This week’s inventory market dip has lifted their yields to new highs and minimize their valuations. I’d purchase these three as we speak if I might scrape sufficient money collectively.

My first choose is housebuilder Taylor Wimpey (LSE: TW), which now yields 8.01% a 12 months. In contrast to rival Persimmon, administration appears keen and in a position to stand by its dividend.

The ability of three excessive yields

Nothing is assured, in fact. The UK housing market has escaped a crash, to date, however with mortgage charges more likely to rise, it’s going to come beneath rising strain. If it does, that may hit demand and gross sales, forcing administration to chop the dividend to save lots of money. But the UK housing market has proved fairly resilient, to date.

Taylor Wimpey’s complete order e book worth stood at £2.38bn final month, down from £3.3bn a 12 months earlier, however demand and mortgage availability has recovered. There are dangers, however like all three shares, I’m shopping for to carry for not less than 10 years, and ideally longer. Dangers are priced in with Taylor Wimpey buying and selling at simply 6.2 instances earnings.

I wish to unfold my threat throughout completely different sectors, and I’m eager to prime up my small stake in Rio Tinto (LSE: RIO). The mining big at present yields 8.4%, regardless of chopping its dividend by half earlier this 12 months.

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That doesn’t rule out one other minimize, however I feel administration could be reluctant to chop twice in a brief interval. The mining sector has been hit by Chinese language lockdowns (which at the moment are over), and fears of a US recession. Rio Tinto’s inventory has fallen 15.73% within the final 12 months. It now seems low-cost, buying and selling at simply 7.1 instances earnings.

Rio would endure if world demand for metals and minerals falls or the worldwide downturn drags on and on. Once more, I’m shopping for for the long-term and can maintain reinvesting my dividends to profit from the restoration, each time it comes.

My third choose is Aviva (LSE: AV), which provides me publicity to a different sector, on this case monetary providers. It additionally serves up one other whopping yield of seven.75%. The inventory is down 7.98% within the 12 months, which seems like a shopping for alternative to me.

Aviva’s newest quarterly outcomes had been a blended bag, with basic insurance coverage premiums rising together with personal medical insurance coverage gross sales, as disillusioned NHS customers go personal. However its funding division suffered as inventory market volatility hit inflows.

Now I want money to purchase them

I used to be happy to see activist investor Cevian Capital has exited its place, saying Aviva had been “remodeled from a poorly performing conglomerate to a centered and well-performing insurance coverage firm”.

Essentially the most I spend money on any inventory is £5,000. If I invested that sum in every of those, I might get a median yield of seven.97%. That may generate revenue of £1,196 a 12 months on my £15k stake. Now I simply want to search out the money to purchase them. Beginning with Aviva.

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