Dividends have been falling like toy soldiers since the coronavirus crisis shocked the global economy earlier this year. Around 50% of FTSE 100 stocks have reduced, stopped, or postponed shareholder payments. And there could be more shattering changes to blue-chip dividend policies in the months to come.
This doesn’t mean that income investors need to panic, however. There remain plenty of terrific FTSE 100 companies that are determined to keep rewarding their shareholders with dividends. And I think some of these are the best UK shares that money can buy today.
Build a fortune
Let’s look at CRH (LSE: CRH) first. You’ll win no prizes by suggesting that the construction material giant’s revenues will suffer during the upcoming global recession. The company has already seen trading deteriorate since around mid-March. But business has been more resilient than some would expect, and particularly so in CRH’s core US marketplace.
CRH isn’t sitting on its hands and waiting to see how things transpire, either. It’s taking “comprehensive mitigating actions” to save cash by restricting capital expenditure to essential maintenance levels; it is slashing discretionary and non-essential spending; and it’s is undergoing significant restructuring and cost-cutting, too.
This FTSE 100 share is in pretty rude health. It has more than $6bn worth of cash and equivalents on the balance sheet, so no wonder it’s resisted the temptation to shave dividends. City analysts expect it to keep paying dividends in 2020 and possibly beyond too. Consequently CRH carries an inflation-beating yield just shy of 3%.
I reckon CRH is one of the best UK shares for Footsie investors. Profits growth will take a hit in the near term but its outlook further out remains quite robust. What’s more, the possible introduction of infrastructure stimulus packages in its key markets could give earnings a shot in the arm, too.
Another FTSE 100 dividend hero
Hargreaves Lansdown (LSE: HL) hasn’t been tempted to hobble shareholder payouts, either. The investment giant’s not had everything its own way of late as interest rate cuts and market weakness have smacked assets under management.
But it’s not all been bad news. In fact the rate at which it has added new business has been phenomenal. During the four months to April it recorded net new business of £4bn, up from £2.9bn in the corresponding 2019 period. This was driven by an addition of 94,000 new customers to its stable.
The boffins over at Berenberg said that the performance paid testament “to the power of the group’s brand, the quality of its user experience and (not least) the operational capacity to onboard that many customers amid Covid-19 restrictions”. It’s more than likely that Hargreaves Lansdown will continue to enjoy robust demand for its services, too, with record-low interest rates forcing savers to find better investment options for their cash.
Today the Footsie business sports a 2.2% forward dividend yield. It isn’t the biggest out there, clearly. But investors don’t need to worry about payouts being axed here any time soon. Hargreaves Lansdown is one FTSE 100 share I’d happily buy for my own share portfolio.