Today I am looking at three FTSE 100 destroyers carrying spectacular dividend prospects.
Direct Line Insurance Group
Diversified insurance giant Direct Line (LSE: DLG) has been a terrific selection for income hunters over the past year. The company’s sizeable restructuring has seen it make significant divestments across its international operations, allowing it to reward shareholders with a series of special dividends.
Although the company’s main markets remain ultra-competitive, signs that motor insurance premiums are once again on the rise is great news for Direct Line’s revenues outlook. And with its streamlining scheme still rolling along nicely — total costs fell 6% during January-September — and the business latching onto hot growth areas like telematics, I believe the insurance play is in great shape to keep on delivering solid shareholder returns.
Indeed, current forecasts indicate that Direct Line will shell out a payment of 26.1p per share in 2015, resulting in a monster yield of 8.2%.
Persimmon
Housebuilder Persimmon (LSE: PSN) has long been a magnet for those seeking access to reliable, year-on-year earnings growth. Although the market has shown some signs of cooling in recent months, house prices look set to keep ticking higher as homes demand continues to outstrip supply.
Persimmon noted last month that revenues increased 23% in 2014, to £2.6bn, while forward sales of £973m as of the close of the year — up 7% from the same point in 2013 — provides terrific visibility for this year. As well, the construction specialist has also proved itself to be a dependable cash generator, and saw cash balances leap 85% higher to £378m last year, a promising precursoe for dividend growth.
Consequently City analysts expect Persimmon to hike the full-year dividend once again this year, and a payout of 100.6p is currently on the cards. As a result the firm boasts an eye-watering yield of 6.1%.
Admiral Group
Like Direct Line, car insurance specialist Admiral (LSE: ADM) will have been buoyed by latest AA data released this month which underlined the steady recovery in premiums after years of declines.
Even though the firm’s British Insurance Premium Index showed average insurance costs fall from around £600 at the end of 2013 to £540 as of the close of last year, prices ticked up 1.4% during the second half of the year. With Admiral also proving a master when it comes to retaining its customers, as well as expanding into foreign marketplaces, I believe the business should continue to offer terrific dividend prospects in coming years.
The effect of current market pressures is expected to drive earnings, and consequently the dividend, lower in 2015, however, and a payment of 89.9p per share is currently pencilled in. But this figure still produces an exceptional 6.2% yield. And payouts are expected to trek higher again from next year as trading conditions improve.