Today I am looking at a clutch of London lovelies poised to deliver stunning shareholder gains.
Banco Santander
With the rise of the middle classes across Latin America boosting product demand at Santander (LSE: BNC), I believe that the bank is a great bet to deliver stunning earnings — and consequently dividend — growth in the coming years.
The bank famously decided to cut the full-year dividend to just 20 euro cents for this year back in January, a vast climbdown from rewards of 60 euro cents that were shelled out for donkey’s years. But with Santander’s capital strength now mended considerably, and revenues set to thrive from rising emerging economies and recovering traditional territories alike, I expect dividends to march higher again sooner rather than later.
And it is worth remembering that the planned payment for this year is hardly inconsiderable, either, with Santander boasting a chunky 3.2% yield.
Esure Group
I reckon that insurance play Esure (LSE: ESUR) is also a solid bet for shrewd dividend seekers. Even though the business warned last month that “rates were slightly soft” during January-March, total gross written premiums still advanced 5.8% in the period to £130.7m. With premiums showing tentative signs of improvement, and Esure expanding its operations into new territories, I believe the Surrey firm should deliver increasingly-appetising investor rewards.
In the more immediate term, Esure is anticipated to hike last year’s reward of 15.3p per share to 15.5p in 2015, and again to 16.1p in 2016. Consequently the insurer carries astronomical yields of 6% for this year and 6.2% for the following period.
Imperial Tobacco Group
Cigarette plays like Imperial Tobacco (LSE: IMT) have long been sought after by dividend hunters, the addictive nature of their products making them ideal candidates for brilliant earnings visibility. And although crimped consumer spending power has pressured the sector more recently, I believe that easing cyclical headwinds in critical developing regions, improved investment in top labels like Davidoff and Gauloises — not to mention hot sectors like e-cigarettes — and ambitious acquisition activity to consign Imperial Tobacco’s previous travails to history.
This view is shared by the City, and a return to bottom line growth from this is expected to propel the dividend from 128.1p per share in the year concluding September 2014 to 142p this year, and again to 155.1p in 2016. Consequently Imperial Tobacco carries mammoth yields of 4.2% and 4.6% for 2015 and 2016 respectively.
Persimmon
I believe that construction specialists like Persimmon (LSE: PSN) should continue doling out terrific dividends as conditions in the UK’s housing market should remain supportive for a long time to come. Latest Halifax data today showed house prices advance 8.6% year-on-year in May, with a backcloth of helpful lending conditions, doggedly low inflation, and rising employment and income levels maintaining a strict demand/supply imbalance.
This environment is expected to keep Persimmon’s stock flying off the shelves, meaning a dividend of 98.4p per share is currently slated for 2015 by the abacus bashers, resulting in a huge 5% yield. And this readout rises to a delicious 5.7% for 2016 due to predictions of an 11.5p reward.