I’m wanting so as to add some low-cost dividend shares to my portfolio at this time. So ought to I contemplate shopping for these FTSE 100 shares? Each carry ahead dividend yields north of the three.7% FTSE common.

NatWest Group

The Financial institution of England is on track to maintain elevating rates of interest within the months forward. This can enable banks like NatWest Group (LSE:NWG) to proceed making huge income from their lending actions.

But I imagine the advantage of increased web curiosity margins (or NIMs) for banks is offset by the prospect that mortgage development might sink. I’m additionally involved concerning the prospect of hovering credit score impairments because the UK economic system flatlines.

Analysis from UK Finance this week underlined how, for instance, the pressure is steadily rising on owners. This can be a enormous downside for NatWest particularly given its place as Britain’s second-biggest residence mortgage supplier.

UK Finance stated that 76,630 house owner mortgages had arrears of two.5% of extra in quarter one. That was up 2% from the earlier three-month interval. In the meantime there have been 750 residential repossessions between January and March, a 50% rise from the earlier quarter.

The variety of owners in dire monetary straits is tipped to develop strongly because the Financial institution of England hikes charges additional and other people come to the top of their fixed-rate offers. Policymakers are actually anticipated to lift charges a minimum of one other three-quarters of a % from present ranges of 4.25%.

NatWest shares commerce on a ahead price-to-earnings (P/E) ratio of 5.7 occasions. Additionally they carry a market-beating 6.7% corresponding dividend yield. However even at these ranges I’m not tempted to speculate.

Severn Trent

Water suppliers like Severn Trent (LSE:SVT) are as much as their necks in controversy proper now. Public uproar over the quantity of sewage they’re pumping into Britain’s rivers and seas is increased than it’s been for a few years.

This week utilities companies pledged £10bn to sort out the issue, with households resulting from choose up the invoice. The latter level has gone down like a lead balloon and will nonetheless immediate motion from regulator Ofwat.

However on stability Severn Trent might nonetheless be a beautiful inventory to purchase proper now. It’s because its operations aren’t dependent upon the well being of the broader economic system. So with UK GDP tipped for extended stagnation it might nicely ship market-beating returns.

One other benefit for traders is that water suppliers don’t face intense aggressive pressures. Households and companies don’t get to decide on who supplies the water that flows from their faucets.

The identical can’t be stated for NatWest. The financial institution is locked in a bloody struggle to cease its clients fleeing to new digital-led operators.

Immediately Severn Trent shares provide a wholesome 3.8% potential dividend yield. Additionally they commerce on a low price-to-earnings development (PEG) ratio of 0.5.

A studying beneath one signifies {that a} inventory trades beneath worth. I believe it may very well be the rock-solid dividend inventory I’ve been looking for.