I’m convinced soaring demand for Marston’s (LSE: MARS) pub grub and speciality ales should keep the firm’s progressive dividend policy firmly on track.
The company saw like-for-like sales tip 2.3% higher during the 12 months to September, with Marston’s noting strong growth on both the ‘dry’ and ‘wet’ sides. And Marston’s continues to grow its pub estate to meet the needs of its thirsty customers, the company adding 28 new pubs, bars and lodges to its 1,560-strong network in the last year alone.
Given its bubbly earnings outlook, Marston’s is expected to raise a dividend of 7.3p per share in fiscal 2017 to 7.6p in the current period, supported by an estimated 2% bottom-line uptick.
Not only does this figure yield a market-beating 5.7%, but dividend coverage stands at a robust 1.9 times. I reckon the booze behemoth is one of the most-compelling income bets out there.
Monster yielder
I believe the size of projected dividends at Taylor Wimpey (LSE: TW) are simply too big to ignore.
For 2017 the housebuilding hulk is predicted to pay a total dividend of 13.8p per share, up from a predicted reward of 11.2p in the current year. And this reading yields a stupendous 9%.
Taylor Wimpey is expected to keep dividends on an upward slope despite the onset of rare earnings pressure — a 4% dip is predicted for next year.
So while this results in dividend coverage of just 1.2 times, I believe the construction ace should remain a lucrative income stock long into the future. It continues to throw out boatloads of cash, and net cash is anticipated to ring in at £360m as of the end of this year, up from £223.3m a year ago.
Besides, I reckon predictions of a sharp cool-down in the British housing market — and with it a painful earnings slip at the likes of Taylor Wimpey — are hugely exaggerated thanks to the country’s severe housing shortage. Indeed, Nationwide commented this week that it expects home prices to rise 2% in 2017.
Fashion star
Elsewhere, I’m convinced the success of the Moss Bros (LSE: MOSB) store restructuring and refit programme should continue to deliver stunning sales growth for years to come.
The suiter-and-booter saw like-for-like retail revenues shoot 5.3% higher during February-July, according to its latest trading statement. But this success is not only confined to the retailer’s physical stores, and a 9% surge in online takings illustrates the hard yards Moss Bros has dedicated to the fast-growing e-commerce segment.
These measures are expected to keep driving earnings steadily skywards, with growth of 14% for the period to January 2017 expected to be followed by a 10% rise in the following year.
As a result, Moss Bros is expected to pay a dividend of 5.8p per share for 2017, resulting in a barnstorming 5.9% yield. And predictions of a further hike in fiscal 2018, to 6.1p, propel the yield to a lipsmacking 6.2%.
Sure, these figures rise above predicted earnings of 5.2p this year and 5.7p for 2018. But I reckon a rapidly-improving balance sheet, allied with the firm’s stellar long-term growth prospects, leave Moss Bros in great shape to meet these excellent dividend forecasts.