Today I’m looking at three FTSE-quoted dividend delights.
A financial favourite
As insurance sales explode all over the world, I reckon Prudential (LSE: PRU) is a great bet for those seeking strong dividend expansion long into the future. While economic cooling in critical Asian markets may prove a short-term problem, I believe the insurer’s improving product portfolio should protect it from the worst of rising macroeconomic strife.
Reports emerged earlier this month that China’s foreign exchange regulator will limit purchases of overseas insurance products via UnionPay credit and debit cards to $5,000 per transaction. But this is unlikely to have a colossal impact on Prudential as its Hong Kong business is geared towards regular premiums rather than large one-off sums.
Subsequently Prudential is expected to keep its long-running growth story in business, and a 9% earnings rise predicted for 2016 is anticipated to drive the dividend to 44.3p per share, up from a projected 40.4p for last year. Sure, a prospective 2.9% yield may not be the biggest in town, but I expect payments to keep rising at an electric rate along with earnings.
Electrify your stocks portfolio
I think investors will be hard pushed to find a stock with more secure dividend prospects than those of National Grid (LSE: NG). While weak macroeconomic sentiment has driven the FTSE 100 5% lower since the start of 2016, a rush to safety has seen the electricity network operator edge 2% higher since December, the stock even taking in record peaks around 990p per share in the process.
National Grid is never going to be a favourite for those seeking explosive earnings growth. But the ‘sure and steady’ nature of its operations — electricity is always in demand regardless of any troubles the wider economy may endure — gives it terrific revenues visibility, a critical quality for dividend investors and particularly so in the current climate.
The number crunchers expect National Grid to enjoy a solid-if-unspectacular 4% earnings rise in the year to March 2016, pushing the dividend to 43.7p per share and consequently the yield to a terrific 4.8%. And this figure moves to 5% for 2017 thanks to predictions of a 44.7p payment, underpinned by a modest 1% earnings improvement.
A great income package
I’m convinced that Royal Mail (LSE: RMG) should also become an increasingly-lucrative dividend selection in the years ahead. Not only are the fruits of massive restructuring already being felt, but the courier’s dominance of the UK market and improving presence in Europe puts it in the box seat to enjoy rising parcels revenues as e-commerce takes off.
The latest IMRG Capgemini e-Retail Sales Index showed internet transactions up 15% year-on-year in January, more than double the 7% growth rate punched in the first month of 2015. The data led Capgemini analyst Richard Tremellen to comment that “it’s a strong indication that consumer confidence is continuing to grow and puts us in a good position for a strong 2016.”
Royal Mail’s robust long-term outlook is expected to push the dividend from 21p per share in the year to March 2015 to 21.7p in 2016, shrugging off an anticipated 20% earnings decline and creating a chunky 4.6% yield. And expectations of a 22.7p payment next year, underpinned by a predicted 10% bottom-line rise, produces an excellent 4.9% yield.