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A dirt-cheap FTSE 100 dividend stock I’d buy for my ISA and hold until 2029

Royston Wild
Hand holding pound notes

A FTSE 100 stock I reckon is a great pick for novice share pickers and experienced equity investors alike is The Berkeley Group (LSE: BKG).

I’m not going to pretend that everything is fine and dandy over at the blue-chip housebuilder. Brexit fears continue to crimp buyer activity in its core markets of London and the South East, geographies where property prices have long been accused of being severely overheated. Current political and economic uncertainty means that homebuyers are thinking twice before taking the plunge, but I believe this will end up being a short-lived phenomenon.

London calling

Make no mistake: these regions in the south of England are the engine room of the UK economy, and in the case of London, a market that has been popular with both residential owners and investors for centuries. Once the current political deadlock around Brexit is broken I expect buying activity to pick up at Berkeley, and fast.

Besides, it’s not as if business conditions at Berkeley are sinking at an alarming rate. In its most recent trading statement of 6 September the construction colossus advised that “market conditions in London and the South East have remained robust” in the first four months of the current financial year, the business adding that “pricing has remained stable and the group’s forward sales position remains above £1.8bn.”

City analysts, then, expect the builder to return to earnings growth in the next financial year with a 2% bottom-line advance. Decent dividend yields of 3.8% and 4% for the fiscal periods to April 2020 and 2021 provide plenty to get excited about, too. And a low forward price-to-earnings ratio of 14.1 times, despite its recent ascent to record highs around £47.80, gives long-term investors an attractive entry point to buy in.

The right medicine

Before you go I’d like to shine a light on AstraZeneca (LSE: AZN), another brilliant Footsie share with the wind in its sails right now. Its share price has recently crept back towards the record closing highs of £75.80 of late October, and despite its elevated forward P/E ratio of 27 times I expect it to hit new peaks sooner rather than later.

In my book pharmaceuticals star AstraZeneca is every inch a stock worthy of a hefty premium to the broader FTSE 100 (where the broader forward average sits closer to 15 times). I recently celebrated the strength of the company’s pipeline of new treatments and newsflow since then has reinforced my enthusiasm.

A string of positive testing and regulatory updates in recent weeks includes the approval of its Qtrilmet diabetes battler in Europe, and US lawmakers granting fast-track review status for its selumetinib drug for the treatment of neurofibromatosis type 1 in children. AstraZeneca’s new product lineup is already lighting a fire under the bottom line, causing City analysts to predict that the 4% earnings rise for 2019 will improve to 19% next year. And this recent news gives commentators more reason to be cheery about the business for well into the next decade.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca. 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.

Motley Fool UK 2019