2 cheap FTSE 100 dividend stocks! Should I buy them next week?

Investing in dividend-paying stocks can be an attractive option for investors seeking steady income streams. The FTSE 100 index, which comprises the top 100 companies listed on the London Stock Exchange, includes many dividend-paying stocks that investors may consider.

Two cheap FTSE 100 dividend stocks that investors may be considering are Lloyds Banking Group and Legal & General Group.

Lloyds Banking Group is a leading UK-based financial services company that offers a range of banking and insurance products to its customers. The company has a market capitalization of around £31 billion and a dividend yield of approximately 5.5%. The company's dividend yield is significantly higher than the FTSE 100 average, which is around 3.5%.

Lloyds Banking Group's dividend payout ratio, which is the percentage of its earnings paid out as dividends, is around 46%. This suggests that the company has some room to increase its dividends in the future, although it may also indicate that the company is retaining earnings to invest in growth opportunities.

Legal & General Group is a leading provider of insurance, investment management, and pensions products in the UK and internationally. The company has a market capitalization of around £16 billion and a dividend yield of approximately 6.2%.

Legal & General's dividend payout ratio is around 60%, which suggests that the company is paying out a significant portion of its earnings as dividends. However, this also indicates that the company may have limited room to increase its dividends in the future unless its earnings increase significantly.

When considering whether to buy these stocks, investors should also take into account other factors such as the companies' financial health, growth prospects, and competitive landscape.

In the case of Lloyds Banking Group, the company has been affected by the COVID-19 pandemic and low-interest rates, which have impacted its revenue and profitability. However, the company has a strong balance sheet and is well-positioned to benefit from the economic recovery in the UK.

Legal & General has also been impacted by the pandemic but has continued to report solid financial results. The company's investment management business has performed well, and its pensions and insurance products remain in demand.

Investors should also be aware of the risks associated with investing in individual stocks, including the potential for significant price fluctuations and the possibility of a dividend cut. Companies may cut their dividends if their earnings decline or if they need to retain more earnings to invest in growth opportunities.

In conclusion, Lloyds Banking Group and Legal & General Group are two cheap FTSE 100 dividend stocks that investors may be considering. While these stocks offer attractive dividend yields, investors should also take into account other factors such as the companies' financial health, growth prospects, and competitive landscape. It is essential to conduct thorough research and seek professional advice before making any investment decisions.