Which Stocks to Look from FTSE 100 To Earn A Stable Dividend

By - Team Kalkine Media


  • Dividends stocks are a great source of passive income and investing in FTSE 100 listed dividend stocks is considered much safer bet.
  • When the market is not doing well, investments in dividend stocks can help in beating the market volatility.  

Dividend stocks are the most sought-after choice for passive income seekers as they lead to almost steady income without compromising on their positions. The stock markets’ good pace of recovery in the post-vaccine scenario has brought investors back in the hunt for these passive income sources.

In simple terms, dividends are cash or stocks allocated to shareholders, usually when a company is into profits.  For keeping a tab on dividend stocks, dividend yield, which represents the health of the company can be a good starting point. Smart investors keep a track of company releases and dividend announcements to earn from their holding without diluting their stake. Investing in FTSE 100 listed dividend stocks is considered much safer than investing in mid-cap and small-cap companies.

In this article, we shall put our lens through some prominent blue-chip companies that have stable dividend outlook. (All figures are taken from Refinitiv, Eikon).

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

  1. Imperial Brands Plc (LON: IMB)

 FTSE 100-listed tobacco firm Imperial Brands has devised a new tobacco-focused strategy that primarily revolves around next generation products to derive growth for the company.

US credit rating agency Fitch Ratings has revised its ratings on Imperial Brands to Stable from Negative. The revised ratings reflect the anticipated reduction in financial leverage and dividend announcement.

Notably, the company paid out 87 per cent of its earnings as dividends in 2020, despite the Covid-19 disruption. The tobacco company is about to go ex-dividend in the next 2 days, i.e., on 18 February. Also, the tobacco company has an impressive dividend yield of 9.2 per cent. Shares of IMB surged by 2.64 per cent to GBX 1,533 on 15 February at market close. 

Also read: Top 3 FTSE All-Share stocks with over 10% dividend yield

  1. British American Tobacco Plc (LON: BATS)

FTSE 100-listed tobacco and nicotine company British American Tobacco recently got clearance from the UK's Serious Fraud Office (SFO) on its alleged corruption practices case. Company insiders are buying shares in the company, which implies that the company has a stable earnings outlook.

The tobacco company has an attractive dividend yield of 7.8 per cent. Also, the company has a decent payout ratio of 65 per cent of adjusted diluted EPS in sterling terms. Shares of BATS surged by 2.76 per cent to GBX 2,789.50 on 15 February 2021 at market close. 

  1. BT Group Plc (LON: BT.A)

Although the old warhorse of UK’s telecom sector BT Group slashed its dividend payments to fiber up rural households during the first half of 2020, it hinted towards resuming dividend payments soon.

A lot of investors consider this stock for juicy dividend yield, which is 12.4 per cent. Also, the company has a healthy payout ratio of 26.4 per cent. For the three-month period ended 31 December 2020, the London-based carrier reported adjusted EBITDA of £1.88 billion.

The FTSE 100-listed carrier has a stable profit outlook as a lot of customers have upgraded their existing broadband contracts during the pandemic-induced lockdowns. Shares of BT Group closed at GBX 129.60 on Monday 15 February, up by 4.47 per cent from previous day closing price.

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