By - Suhita Poddar
Source: Athitat Shinagowin, Shutterstock
- The dividend yield is one of the crucial aspects to look at before investing.
- Due to the pandemic, some companies have had to cut down on the amount of dividend declared or have pushed back dividend payouts.
For an investor, one of the important investing aspects to look at before putting their money is the dividend yield. Yields give a picture of future dividends, as stated by the company, and they are based on the total dividends given in the last 12-month period upon the present share price. The ratio is also seen in respect to the average of industry.
The usual perception is a company with a higher dividend yield pays a good amount of its profits in the form of a dividend, though a higher dividend yield is not always an indicator of a lucrative investment opportunity, and one needs to thoroughly analyse the business proposition before making any investment decision.
Due to the Covid-19 pandemic, some companies have had to cut down on the amount of dividend declared or have pushed back dividend payouts for a later time.
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Here we are going to discuss five FTSE100 stocks that have a dividend yield of over 6 per cent
GlaxoSmithKline Plc (LON: GSK)
The pharmaceutical giant has a present dividend yield of 6.66 per cent. The company would be paying a Q4 dividend of £0.23 per share, which makes it £0.80 per share dividend in the last 12 months. The company’s dividend payout is sustainable as it is provided from both cash flow and profits.
Recently, GSK, along with Sanofi SA announced a new phase II study on their protein-based Covid-19 vaccine. The new study would select the most precise antigen dosage for adults for their Phase III study.
British American Tobacco Plc (LON: BATS)
BATS has a current dividend yield of 8.47 per cent. For the year ended December 31, 2020, the company had declared dividend of 215.6 pence per share, an increase of 2.5 per cent from 2019.
Profit from operations rose 10.5 per cent from 2019 to £9,962 million in 2020. Though the company reported revenues worth £25,776 million in 2020, a drop of 0.4 per cent from 2019.
The company believes that it can move from cigarettes to non-combustible alternatives and boost its revenue from new categories from £1.3 billion in 2019 to almost £5 billion by FY2023 or 2024.
Vodafone Group Plc (LON: VOD)
This telecommunication major has a dividend yield of 6.29 per cent. The company, in its third quarter earnings, said that revenue from its organic service returned to growth, reporting a rise of 0.4 per cent.
CEO Nick Read had said that there was momentum across businesses, including Germany, which is its largest market. He said that the company’s good trading performance underscored the confidence in the outlook for the whole year.
He also said that the company’s plans for the infrastructure company Vantage towers was on track and would be completed by early this year.
Phoenix Group Holdings (LON: PHNX)
The life insurance company has a dividend yield of 6.51 per cent. Despite the post-Covid market crash, shares of Phoenix Group have been able to recover well in the market.
Recently, Standard Life Aberdeen Plc (LON: SLA) announced that it would be selling its 200-year-old brand Standard Life to Phoenix Group for an undisclosed amount. As per the terms of the agreement, both firms’ partnership would extend to asset management.
Standard Life Aberdeen Plc (LON: SLA)
This Scotland-based investment company has a dividend yield of 6.79 per cent. The company’s share price is up 34 per cent now from what it was six months back. The company, in a broader process of simplifying and extending partnership with Phoenix Group decided to sell Standard Life brand and reiterated that it would not have any significant impact on its earnings.