FTSE 100 crash: I’d buy cheap dividend stocks today to make a passive income

first_imgFTSE 100 crash: I’d buy cheap dividend stocks today to make a passive income See all posts by Peter Stephens Simply click below to discover how you can take advantage of this. Image source: Getty Images. Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. 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After all, the economic prospects for the UK are highly uncertain, and this could cause more companies to delay or cancel their dividend payouts.However, on a relative basis the FTSE 100 seems to offer strong income investing potential. Therefore, buying a range of dividend stocks today while they trade at bargain prices could prove to be a profitable move for income-seeking investors over the long run.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Income returnsMany FTSE 100 stocks have cut their dividends in response to uncertain trading conditions. But a number of companies have been largely unaffected by coronavirus so far. They include businesses operating in sectors such as utilities, healthcare, consumer goods and a number of other industries. As such, they are expected to maintain their dividend plans for the current year.This could mean that investors are able to generate significantly higher income returns from FTSE 100 dividend shares than from other mainstream assets. For example, a number of FTSE 100 stocks continue to yield in excess of 4%. By contrast, obtaining an income return of even half that figure from assets such as cash and investment-grade bonds has become highly challenging.FTSE 100 dividend growthAs well as offering relatively high yields at the present time, FTSE 100 dividend shares also offer the potential for dividend growth in many cases. For example, a number of utility companies could deliver dividend growth that matches inflation over the medium term. Meanwhile, demand for some consumer goods and healthcare products could rise over the coming years. This may catalyse the profitability and dividends of companies operating in those sectors.Therefore, the appeal of dividend shares may be much greater than simply being able to obtain a high yield. They may deliver a growing passive income over the long run that makes them even more attractive on a relative basis.Capital growth potentialThe prospects for FTSE 100 stocks may be uncertain at the present time as a result of a weak outlook for the world economy. However, the global economy has always recovered from its challenging periods to post positive GDP growth. As such, trading conditions across many industries are likely to improve over time.This could mean that as well as a generous passive income, FTSE 100 shares also produce capital growth in the long run. Although capital growth may not be a primary concern for income investors, a larger portfolio may make it easier to generate a sufficient passive income. So I’d buy large-cap shares when they offer wide margins of safety following the recent market crash. It means you may be able to obtain a large total return that improves your long-term financial prospects. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! “This Stock Could Be Like Buying Amazon in 1997” Peter Stephens | Friday, 15th May, 2020 | More on: ^FTSE last_img

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