Today I am running the rule over four London-listed dividend giants.
Drugs dynamo
The business of medicines development is never straightforward. Just ask AstraZeneca (LSE: AZN) — the company advised today that its Lynparza product has failed in a gastric cancer combination trial.
But this follows news on Tuesday that its Benralizumab asthma battler is set to be submitted to US and European regulators in the second half of 2016 following positive testing data.
Investors in the pharma sector have to accept the rough with the smooth. And, all things considered, I believe AstraZeneca is a hot stock for the coming years, as its rejuvenated R&D pipeline delivers the next generation of earnings drivers and global healthcare demand surges.
Lasting patent problems are expected to push earnings 8% lower this year and 3% in 2017, causing AstraZeneca to keep the dividend locked at 280 cents per share. But these projections still yield a handsome 4.9%.
Sunny outlook
Despite recent terrorist attacks in North Africa and Turkey, tour operator TUI (LSE: TUI) continues to witness surging demand for its package holidays, with tourists simply switching to other destinations.
And I expect strong economic conditions across Europe to keep propelling holiday sales higher in the near-term and beyond. On top of this, TUI’s recent decision to hive off non-core assets and plough the proceeds into its key operations further bolsters the firm’s long-term prospects.
In the more immediate future, predicted earnings growth of 13% and 19% in the years to September 2016 and 2017 should propel dividends to 61.6 euro cents and 64.2 cents per share correspondingly. These City projections yield a chunky 4.7% for this year and 4.9% for 2017.
No small beer
Sales at pub chain Marston’s (LSE: AZN) continue to click through the gears, helped by bubbly drinker activity in its houses as well as solid demand for its own-brewed ales. The business saw underlying revenues leap 11.5% during October-March, to £428.7m, it advised today. This helped underlying pre-tax profit at Marston’s advance 11.8% year-on-year, to £33.1m.
City brokers expect Marston’s to deliver a 6% earnings rise in the period to September 2016, underpinning a 7.34p per share dividend. And a payout of 7.7p is projected for next year, supported by an estimated 7% bottom-line rise.
Consequently Marston’s sports jumbo yields of 5.1% and 5.3% for 2016 and 2017 correspondingly.
Building beauty
With Britain’s housing imbalance expected to reign well into the future, I reckon the likes of Taylor Wimpey (LSE: AZN) should keep on churning out monster dividends.
A combination of improving wage levels, rising employment and supportive lending conditions are helping propel demand for homes through the roof. And insufficient building activity is exacerbating an already-worrying housing shortage.
Consequently, the City expects Taylor Wimpey to enjoy earnings growth of 17% and 8% in 2016 and 2017 respectively. And with the company also throwing up shedloads of cash, Taylor Wimpey is predicted to pay dividends of 10.9p this year and 11.5p in 2017, resulting in vast yields of 6% and 6.3%.