Focus on 5 FTSE Stocks with Long History of Dividend Payouts

By - Abhijeet

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Summary

  • Investing in businesses that distribute their earnings is an ideal preposition for income seeking investors.
  • Investors look forward to stocks that have demonstrated dividend paying capacity for years as dividend income help investors in beating market volatility.

Investors seeking passive sources of income often resort to dividend paying stocks as they help in beating the market volatility. Thus, people looking forward to generating stable source of passive income should consider dividend stocks which have a long history of distributing their earnings.

Also, reinvesting dividend income can help investors in achieving compounded growth that might add up to a huge part of overall returns if held for the longer term.

As the pandemic washed up the shores of UK, most of the companies slashed or cancelled their dividend payments last year in the wake of coronavirus crisis and Brexit led uncertainties. Despite all the adversity, there were still many businesses that have chosen to distribute their earnings despite the pandemic woes.

In this article, we would put our lens through some stocks which have a rich history of distributing earnings irrespective of economic cycles.

         

Copyright © 2021 Kalkine Media Pty Ltd.

Also read: A Glance at The Top 10 FTSE Dividend Stocks For 2021

  1. Diageo Plc

Foods and beverages company Diageo Plc (LON: DGE) is engaged into alcoholic beverage business and provides various categories of beer and spirits. Its products are presently being sold in over 180 countries around the world.

During H1 FY21, reported net sales were down by 4.5 per cent, while the operating profit dipped by 8.3 per cent year-on-year. Subsequently, basic earnings per share plunged 14.6 per cent year-on-year, which was primarily driven by lower operating profit and unfavorable exchange rates. During the period, the Company also increased investment in its digital capabilities and completed the acquisitions of Davos and Aviation American Gin brands.

Diageo delivered a decent performance in H1 FY21 amid the heightened level of market uncertainties, with improved operating leverage and tight cost control. The group is putting endeavors to bolster brand equity and expand digital capabilities. The medium and long-term growth strategy remained intact as the company has improved its market share as well.

In addition, interim dividend per share was increased by 2 per cent to 27.96 pence. DGE shares last traded at GBX 2,812.50 on 26 February 2021.

Also read: CMA to probe into the acquisition of Chase Distillery by Diageo Plc (LON: DGE)

  1. WPP Plc

WPP Plc (LON: WPP) is a FTSE 100-listed communications services company. It offers the services to some of the world’s prominent national and multinational clients. The company is planning to strengthen its capabilities in the Brazil region, and therefore it acquired DTI Digital.

The company has continued good momentum in new business and has maintained strong liquidity and balance sheet. WPP expects an annual revenue growth rate (including M&A benefit) to be in a range of 3-4 per cent by 2023, and double-digit headline EPS growth over the next three years along with 15.5-16 per cent headline operating margin in 2023. It expects gross annual cost savings of £600 million by 2025.

In the last few years, the Company has made significant progress, with a strong balance sheet, stronger agency brands and new leadership. It saw strong new business performance, with US$5.6 billion won in the first nine months. WPP announced an interim dividend of 10 pence per share during 2020 interim results. WPP shares last traded at GBX 853.80 on 26 February 2021.

  1. Sage Group Plc

Sage Group Plc (LON: SGE) is an FTSE 100-listed provider of business software and solution having its presence in North America, North Europe, Central Europe, Africa, the Middle East, Asia and Latin America. The company has a strong demand for Sage Business Cloud solutions, which resulted in higher recurring revenue during the first quarter of the FY2021. The company saw robust growth in cloud-native revenue along with the acquisition of new customers. Sage Group witnessed a limited impact on business performance due to the Covid-19 pandemic. Overall, the sustained investment in Sage Business Cloud throughout the economic cycle shall lay down a solid foundation for the long-term success of the Group.

The company’s performance stood in line with management expectations in the first quarter of the financial year 2021, with growth in software subscription and a strong balance sheet. In the first quarter of the financial year 2021, driven by successful strategic execution, the organic total revenue increased by 1.4 per cent and recurring revenue increased by 4.7 per cent.

          

 Copyright © 2021 Kalkine Media Pty Ltd.

The revenue from North American and Northern European businesses surged by 6.4% and 3.3%, respectively, on a year-on-year basis. The Company has shown a strong balance sheet, with £1.2 billion of cash and available liquidity and £129 million of net debt. Notably, Sage Group announced a full year dividend of 17.25 pence per share for the year 2020. SGE shares last traded at GBX 558.60 on 26 February 2021.

  1. Halma Plc

Halma Plc (LON: HLMA) is an electronic & electrical equipment company engaged in the business of manufacturing products that enhance and protect the peoples’ life quality. The company had shown an increase in financial performance in the first half of the financial year 2020. Both the top-line and the bottom-line performance have improved for the period.

In the first half of the financial year 2020, driven by a good performance from USA, UK, Asia Pacific and mainland Europe, the company’s revenue increased by 12 per cent to £653.7 million as against £585.5 million in H1 FY2019. The company’s interim dividend increased by 7% to 6.54 pence in H1 FY2020 versus 6.11 pence in H1 FY2019. HLMA shares last traded at GBX 2,267.00 on 26 February 2021.

  1. EVRAZ Plc

EVRAZ Plc (LON: EVR) is a FTSE 100-listed Industrial Metal Mining Company. It is a producer of infrastructure steel products and serves in more than 70 countries. During the first half of 2020, company’s net profit increased to US$513 million from US$344 million in H1 2019.

During Q4 2020, the metal miner’s consolidated crude steel output increased by 7.4 per cent quarter on quarter.  In addition, the sale of steel products increased by 12 per cent quarter on quarter on the backdrop of sale of semi-finished products. The company declared an interim dividend of US$0.20 per share for 2020. EVR shares last traded at GBX 571.00 on 26 February 2021.


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