With a number of high dividend paying companies releasing financial updates next month, I’m keenly awaiting February 2020. I want assurance that they will continue to be a great source for passive income generation going forward. Or, at the very least, get a better sense of which way their share price as well as their yield is headed through 2020.
Big shareholder gains
One of these is the FTSE 100 miner EVRAZ which has the highest dividend yield in the set, of almost 16%. Despite this, and a huge return on capital over the last half a decade, I have remained unconvinced of the share. The fact the largest shareholder, chair, and CEO sold off part of their holdings understandably led to investor nervousness last year.
Nevertheless, it’s trading update released yesterday was received positively, leading to a share price rise. Its annual results are due at the end of February. These will provide the full picture of the past year and also the outlook for the future. I’m waiting it to figure out whether the share price can once again repeat the performance of the last few years, and also to get better perspective on its dividends for 2020.
Undeniably high yield
Energy provider Centrica is another FTSE 100 is also releasing results in mid-February. Its double-digit dividend yield is second only to EVRAZ. I’m waiting to see if that can be sustained in the next year. This depends on both the actual dividend paid and the share price.
Centrica’s share price has been on the downtrend since 2013. Its recent updates have given some hopes of better conditions, but I don’t think its share price will soar anytime soon. There’s no reason to believe that dividends will change materially either, keeping its yield strong. But I’ll wait for another two weeks for confirmation.
Best of both the worlds
The FTSE 100 housebuilder Persimmon (LSE: PSN) is next on my list of stocks to look out for in February. Its share price has been rising steadily since August last year after it released its half-year results. It’s currently trading at all-time highs. The housing market for the UK could look better over 2020, though I say that cautiously after the Bank of England cut its forecast for the economy yesterday.
Yet, the combination of better housing market prints and continued low interest rates could work in the favour of PSN. We’d know for sure what the future holds when it announces its 2019 results at the end of February. Even before that, though, I think there’s a strong case for PSN. It’s a rare stock that’s offering both a high yield of 7.7% and has seen rising share prices for much of the past year. Even if the prices do start coming off, I reckon this one will remain a winner because of the income.