By - Rishika Raina
Highlights
- A rise in British businesses paying out hefty dividends has led the global figure to hit a record level of £461.2bn ($544.8bn).
- Shareholder payouts in the UK have surged by 32.3% over the second quarter of the year in comparison with the previous year, as per Janus Henderson.
- The latest figures have prompted Janus Henderson to lift its expected payout by the end of 2022 to $1.56tn.
Amidst the spiralling cost of living squeeze, the global dividend payouts have hit record-high levels. As per the latest data, a rise in British businesses paying out hefty dividends has led the global figure to hit a record level of £461.2bn ($544.8bn).
A study by the fund management company Janus Henderson unveiled that shareholder payouts in the UK have surged by 32.3% over the second quarter of the year compared with the previous year. This has thus filled the pockets of the investors with funds worth £32.6bn ($38.5bn).
The dividends paid put by companies have been soaring after the Covid-19 pandemic. Initially, the rise in dividends was driven by mining businesses, oil giants, and banking firms. The recent whopping dividend payout figures have prompted Janus Henderson to lift its expected payout by the end of 2022 to $1.56tn.
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However, the study carried out by the fund manager suggests that even though the UK has witnessed a rise in the overall dividend payments, the amount of payouts received by the shareholder continue to be somewhat lower than the pre-Covid levels.
Ben Lofthouse, the head of the company’s global equity, has reportedly said that most of the easy gains have already been made with the economy catching up and recovering post-Covid. In addition, the UK economy is also facing a slowdown as the entire world is dealing with substantially sluggish economic growth and the headwind from the strengthening US dollar.
With households struggling with rising food and fuel bills, several unions in the UK have been asking for more support measures and hiked wages for economically weaker employees. This is happening parallel to the shareholders enjoying increased dividend payouts. This shows that households can beat the rising inflation and protect their hard-earned money by investing in the stock market.
Before investing in stocks, investors must carefully choose the type of stocks suitable for them. To get higher dividends for creating a source of passive income, investors should avoid buying the stocks of tech companies as they offer comparatively lower dividends due to struggling with either less or no profits amid the soaring inflation and interest rates.
Kalkine Media® here explores the following dividend-paying stocks that UK investors can consider for bolstering their portfolio amid the escalating inflationary pressures.
Rio Tinto plc (LON: RIO)
The shares of the Anglo-Australian mining corporation, Rio Tinto plc, surged by 2.04% while trading at GBX 5,052.00 at 11:50 AM (GMT+1) on Friday. Holding a market capitalisation of £61,856.91m, the company falls under the FTSE 100 index, and its current dividend yield offering stands at a huge 11.7% yearly. The company has a low P/E ratio of 5.38 and a high EPS (earnings per share) of 13.03. Even though the company has given positive returns of 3.18% to its shareholders on a YTD (year-to-date) basis, its one-year return stands in the negative zone as of 26 August, at -5.98%.
Diversified Energy Company plc (LON: DEC)
The shares of the oil and gas making corporation based in the US, Diversified Energy Company plc, tumbled by 0.43% while trading at GBX 140.10 at 11:56 AM (GMT+1) on Friday. Holding a market capitalisation of £1,197.30m, the company falls under the FTSE 250 index, and its current dividend yield offering stands at 10.2% yearly. The company’s EPS is currently negative, standing at -0.03. However, it has given its shareholders positive returns of 34.16% and 29.97% on a YTD and one-year basis, respectively, as of 26 August.
M&G plc (LON: MNG)
The shares of the global business involved in investment management, M&G plc, surged by 1.11% while trading at GBX 200.20 at 12:02 PM (GMT+1) on Friday. Holding a market capitalisation of £4,990.25m, the company falls under the FTSE 100 index, and its current dividend yield offering stands at 9.3% on a yearly basis. The company’s EPS is currently negative, standing at -0.44. Even though the company has given positive returns of 0.40% to its shareholders on a YTD basis, its one-year return stands in the negative zone as of 26 August, at -4.57%.
Imperial Brands plc (LON: IMB)
The shares of the UK-based tobacco-making giant, Imperial Brands plc, soared by 0.24% while trading at GBX 1,883.00 at 12:07 PM (GMT+1) on Friday. Holding a market capitalisation of £17,853.42m, the company falls under the FTSE 100 index, and its current dividend yield offering stands at 7.4% on a yearly basis. The company has given positive returns of 16.20% and 23.48% to its shareholders on a YTD and one-year basis, respectively, as of 26 August.
Anglo American plc (LON: AAL)
The shares of the top UK-based producer of metals, Anglo American plc, rallied by 1.94% while trading at GBX 2,976.00 at 12:12 AM (GMT+1) on Friday. Holding a market capitalisation of £39,050.59m, the company falls under the FTSE 100 index, and its current dividend yield offering stands at a huge 7% on a yearly basis. However, its returns on both YTD and one-year basis are in the negative zone as of 26 August, at -1.36% and -1.98%, respectively.
Aviva plc (LON: AV.)
The shares of the UK-based international life insurance business, Aviva plc, were up by 0.52% % while trading at GBX 427.20 at 1:24 PM (GMT+1) on Friday. Holding a market capitalisation of £11,911.75m, the company falls under the FTSE 100 index, and its current dividend yield offering stands at 7% yearly. The company’s EPS is currently positive, standing at 0.50. The company has given positive returns of 10.2% and 11% to its shareholders on a YTD and one-year basis, respectively, as of 26 August.
Bank of Georgia Group plc (LON: BGEO)
The shares of the leading universal bank offering various financial services, Bank of Georgia Group plc, surged by 1.47% while trading at GBX 2,070.00 at 1:29 PM (GMT+1) on Friday. Holding a market capitalisation of £994.33m, the company falls under the FTSE 250 index, and its current dividend yield offering stands at 6.8% on a yearly basis. The firms has a P/E ratio of 3.59 and a huge EPS of 15.22. The company has given positive returns of 24.10% and 31.35% to its shareholders on a YTD and one-year basis, respectively, as of 26 August.
ContourGlobal plc (LON: GLO)
The shares of the internationally functioning renewable power generator, ContourGlobal plc, rallied by 0.20% while trading at GBX 253.00 at 1:31 PM (GMT+1) on Friday. Holding a market capitalisation of £1,658.52m, the company falls under the FTSE 250 index, and its current dividend yield offering stands at 6.5% on a yearly basis. The company has a P/E ratio of 10.68 and an EPS of 0.02. The company has given its shareholders positive returns of 32.18% and 30.14% on a YTD and one-year basis, respectively, as of 26 August.
GCP Infrastructure Investments Ltd (LON: GCP)
The shares of the prominent closed-ended investment business, GCP Infrastructure Investments Ltd, were up by 0.37% while trading at GBX 109.00 at 1:35 PM (GMT+1) on Friday. Holding a market capitalisation of £960.25m, the company falls under the FTSE 250 index, and its current dividend yield offering stands at 6.4% yearly. The company has a low P/E ratio of 5.72. The company has given its shareholders positive returns of 0.57% and 2.08% on a YTD and one-year basis, respectively, as of 26 August.
Vodafone Group plc (LON: VOD)
The shares of the globally leading telecom establishment, Vodafone Group plc, were down by 0.74% while trading at GBX 115.70 at 1:38 PM (GMT+1) on Friday. Holding a market capitalisation of £32,439.16m, the company falls under the FTSE 100 index, and its current dividend yield offering stands at 6.4% on a yearly basis. The company has a P/E ratio of 19.23, and its EPS currently stands at 0.07. Even though the company has given positive returns of 3.14% to its shareholders on a YTD basis, its one-year return stands in the negative zone as of 26 August, at -5.85%.