By - Suhita Poddar
Source: Michail Petrov, Shutterstock
- Dividend stocks provide investors with both capital appreciation and passive income.
- These investments help in seeing through the volatile periods.
- Investors with moderate risk appetite usually consider investing in dividend stocks.
Dividend stocks are back in demand as markets are recovering at a steady rate and confidence is building up. Smart investors are actively seeking passive income generation options and often resort to dividend stocks. Dividend paying stocks are preferred by all sorts of investors as they are profitable. Apart from appreciating in value, these investments provide an investor with regular income.
In this article, we shall briefly discuss 5 stocks listed on LSE that are going ex-dividend in April. Notably, last year in April, dividends dried out as businesses struggled to remain afloat in the wake of the pandemic. Several businesses delayed the disclosure of results and slashed/deferred dividend payouts as the coronavirus crisis unfolded.
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Thermal energy and niche pumping specialist Spirax-Sarco Engineering delivered a resilient performance in 2020 and seem to be well-poised for 2021. The company’s reported statutory operating profit was up by 2 per cent year-on-year to £249 million in 2020. Given the challenging market conditions in the wake of the Covid-19 pandemic, the company witnessed a resilient performance in the Steam Specialties and Electric Thermal Solutions businesses. With enhanced inventory management practices in place, the company’s cash generation remained robust throughout the year 2020. The company has increased its final dividend by 8 per cent year-on-year to 84.5 pence per share. SPX market cap stood at £8,546.11 million.
Despite an immensely challenging year, UK-based investment & wealth management services provider Rathbones Brothers delivered a resilient performance. It was prolific in advancing its strategy while keeping a tab on its operating costs, and it continued to deliver high-quality service to its clients. During FY2020, the company witnessed strong investment performance and growth that led to a surge of 8.5 per cent in its FUMA (Funds under management and administration), which stood at £54.7 billion.
Despite a lower investment sentiment across markets, the company managed to deliver an underlying operating margin of 25.3 per cent that was in line with the previous year. Also, the Underlying profit before tax was up by over 4 per cent to £92.5 million in 2020. Due to resilient performance, the board has announced a final 2020 dividend of 47 pence per share. RAT’s market cap stood at £1,034.05 million.
The AIM-listed beverages company’s Off-Trade sales were ahead of expectations across the regions, with strong second-half performance in Europe and excellent progress in the ROW (Rest of World) markets in 2020. The company witnessed an increase of 12 per cent year-on-year in net cash that shall bolster its financial position. In 2021, the company expects revenue growth to be in the range of 12-16 per cent, with gross and EBITDA margins consistent with FY20.
The UK successfully launched the new Premium Soda range and successfully integrated the GDP Global Drinks Partnership. Fevertree Drinks has increased its investment and is committed to making an investment in future opportunities to deliver sustainable growth during the long-term. The company board recommended an increase of 4 per cent year-on-year in its final dividend to 15.68 pence per share for 2020. FEVR market cap stood at £2,473.70 million.
FTSE 250-listed leading business specialising in creating sustainable, high quality and design-led office spaces, Derwent London witnessed a growth of 5.8 per cent year on year in its gross rental income during 2020. The rent collection rates for 2020 stood at 92 per cent. The company is on track to deliver its first net zero carbon development, 80 Charlotte Street W1 in June 2021. The company is committed to becoming a net zero carbon business over the approaching decade. The company has nearly 410,000 sq ft area under construction, out of which 61 per cent is already pre-let.
Given the resilience of the business, the board of the company proposed an increase of 1.9 per cent year on year in its final dividend to 52.45 pence per share for 2020. DLN market cap stood at £3,671.80 million.
FTSE 250-listed General insurer recorded a rise in policy count across its portfolio. The company saw strong growth in segments across the business, with an increase of 2.2 per cent year-on-year in direct owned brands in-force policies. The company witnessed strong growth, with more than 50,000 in-force policies at the end of 2020. It witnessed stable growth in gross written premium across Home and Commercial direct owned brands and Green Flag Rescue. The company board had proposed a final dividend per share of 14.7 pence, an increase of 2.1 per cent year on year for 2020. It also announced a share buyback programme of around £100 million. DLG market cap stood at £4,274.80 million.