The FTSE 100 (FTSEINDICES: ^FTSE) has been hovering uncertainly this morning, ahead of the next policy decision from the US Federal Reserve later in the day — approaching 1pm it was up nine points to 6,579. Whether economic stimulus policy is to be cut back, and how rapidly, has been one of the biggest drivers of the world’s stock markets of late, and we should know more soon.
One way to minimise your reliance on short-term movements is to invest for dividends, and the FTSE 100 is currently on a forecast average yield of 3.2%. Making sure you hold your shares on each company’s ex-dividend date is a key part of the strategy, so here are three companies reaching that key date next Wednesday, 25 September:
Centrica
For energy supplier Centrica (LSE: CNA), next Wednesday is the cut-off day for getting the first-half dividend of 4.92p per share announced on 31 July. The payment is 6% higher than last year’s, and represents 30% of the prior year’s annual payment in line with the firm’s policy. A similar rise in the final dividend would provide a total of 17.4p for the year, giving a yield of 4.4% on the current 396p share price.
That’s slightly less than the yield over the past two years, but the share price is up nearly 20% over the past 12 months, and that’s a pretty attractive overall return.
Old Mutual
It’s a first-half dividend to come from insurer Old Mutual (LSE: OML), too, this time of 2.1p per share. That’s a very nice 20% rise on a year ago, and in this case the same at year-end would add up to a total of 8.4p per share. With the shares priced at 191p today, that would also yield 4.4%.
Old Mutual has been slowly rebuilding its dividend after the crunch year of 2009 led to a hefty cut, and from a yield of just 1.4% that year it was back up to 3.9% for 2012. The share price has had a reasonable 12 months, up 10%, but it hasn’t quite matched the FTSE.
RSA Insurance
RSA Insurance Group (LSE: RSA) kept its dividend up during the early years of the crisis, but it was forced to slash it by 20% in 2012. There’s a further drop of 12% expected this year after the first-half payment was cut by a third to 2.28p per share, and that’s the sum you’ll get if you hold until next Wednesday.
But even after the cuts, RSA is still on a 5.2% forecast yield this year based on today’s 123p share price, and that’s really not a bad return at all. The share price hasn’t done much this year, mind, gaining just a couple of percent.