11.7% and 8% yields! 2 FTSE 100 stocks I bought for long-term passive income!

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These top-class FTSE 100 dividend stocks offer yields far above the 3.5% lead index average. Here’s why I think they could be great ways to boost my passive income.

Taylor Wimpey

Conditions in the UK housing market appear to be stabilising. So I’m considering adding more Taylor Wimpey (LSE:TW) shares to my portfolio today.

The FTSE 100 firm is one of several major housebuilders to report encouraging trading of late. In late April’s market update it celebrated “continued recovery in demand from the low levels experienced towards the end of 2022”.

The homes market is being supported by a sharp improvement in mortgage availability and affordability. In fact, latest Bank of England (BoE) data shows loan approvals up 18% month on month in March, at 52,000.

This was much higher than forecast. And if the trend of positive homes-related data keeps coming I think profits and dividend estimates at Taylor Wimpey could be significantly upgraded.

Extra BoE rate hikes could choke off the recovery. Yet I’m confident that housebuyer demand should continue to improve, supported by fierce competition in the mortgage market and government support for first-time buyers. Soaring rents should also boost residential sales.

Today, Taylor Wimpey boasts a mighty 7.2% dividend yield for 2023. And for next year, the reading moves to an improved 8%. With Britain’s housing shortage tipped to persist, I think the business could be a great source of long-term dividend income.

Rio Tinto

I’m considering topping up my holdings in mining giant Rio Tinto (LSE:RIO) as well. Earnings here might slump if the global economy decelerates sharply and commodities demand dips. But I think this threat is baked into the companys rock-bottom valuation.

Today, the FTSE miner trades on a forward-looking price-to-earnings (P/E) ratio of 5.4 times. This is far below the index average of 14 times.

Rio Tinto also offers a dividend yield far north of the UK blue-chip average. It sits at 11% and 11.7% respectively.

I think the company could be a great source of dividend income over the next decade. The world is embarking on a new commodities supercycle. And so the copper, aluminium, iron ore and other materials it pulls from the ground looks on course to soar.

There are many mining stocks on the London Stock Exchange for me to choose from. But buying Rio Tinto is one of the most appealing choices to me. It has dozens of mining projects that span the globe. This reduces the impact of operational trouble at one or two projects on group earnings.

I also like Rio Tinto because of its strong balance sheet. Net debt to EBITDA ratio stands at just 0.2, giving it room to supercharge growth through investment and acquisition action.

The takeovers of lithium firm Rincon and copper business Turquoise Hill in 2022 underlines its incredible financial clout. I think it could help the business deliver sector-beating returns in the years ahead.

The post 11.7% and 8% yields! 2 FTSE 100 stocks I bought for long-term passive income! appeared first on The Motley Fool UK.

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Royston Wild has positions in Rio Tinto Group and Taylor Wimpey Plc. 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.

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