Top 5 Upcoming Dividends Stocks One Should Be Looking to Build Portfolio

Summary

• Businesses have started reinstating dividend payment with the gradual development in the economic activities
• Economic activities across the UK have picked up pace, and a major QoQ improvement in the performance is widely expected
• There are many companies that have continued their dividend payments based on their strong fundamentals

Dividend seeking investors were worried when the companies began to slash or completely cancel their dividend payments due to the carnage induced by the coronavirus pandemic during the peak of the unprecedented crisis.

As the lockdown has been lifted and the economy has gradually reopened with new safety guidelines, businesses have started reinstating dividend payments to their shareholders. This is great news for dividend seeking investors as they can now consider tweaking their portfolio to supplement their income.

In this article, we would be discussing LSE listed stocks which are going to make dividend payments in the near term.

Also read: 10 FTSE 100 High Dividend Yield Stocks Of 2020

1. Spirax-Sarco Engineering

FTSE 100 listed, Spirax-Sarco Engineering Plc (LON:SPX) is an industrial engineering company which specialises in industrial and commercial steam systems.

During the first half of 2020, the Company’s trading performance was resilient, and stronger than anticipated, but was weaker in comparison to the first half of 2019. The sales performance during the second quarter of 2020 was in line with the management expectations; however, the V-shaped recovery from the Covid-19 crisis has now been receded.

The Company has been anticipating a lower rate of economic movement in the final quarter of 2020. Nevertheless, the Company’s expectations for the full-year adjusted operating profit remain unchanged due to the deployment of effective cost optimisation and efficiency improvement initiatives during the first half of 2020.

During the first half of 2020, the Company reported a decline of 4 per cent in revenue in contrast to the first half of 2019 due to the substantial decline in industrial production. The Company declared the interim dividend of 33.5 pence per share, which was up by 5 per cent in comparison to the previous year (H1 2019). SPX shares are going Ex-dividend on 8 October 2020.

2. WPP Plc

FTSE 100-listed communications services Group, WPP Plc (LON: WPP) offers communications services in a range of verticals such as investment management in media & data, brand management, and services to the world's leading national and multinational clients.

Despite the decline in financial performance during the first half of 2020, the Company managed to declare an interim dividend of 10 pence per share and is on track to deliver the upper end of set target for costs savings. WPP shares are going Ex-dividend on 8 October 2020. Driven by strong working capital management, WPP managed to reduce its debt levels during the first half of 2020.

The Company’s operations were boosted by the depth of client relationships, renewed strength of global networks and strong financial position. WPP recently acquired Velvet Consulting, a leading French customer consultancy.

The recent acquisition will help the Company to expand its business in a new market. The Company believes macroeconomic environment to remain uncertain and expects the full-year outcome to be in the range of analysts' expectations with revenue excluding pass-through costs coming in between -10 per cent to -11.5 per cent on LFL basis and headline operating margin to be in the range of 10.4 per cent to 12.5 per cent.

Also read: FTSE’s Dividend-Paying Stocks; 5 Reasons Why These Shares Will Be in Limelight

3. Spectris Plc

FTSE 250 listed United Kingdom-based company, Spectris Plc (LON:SXS) is an Electronic & Electrical Equipment provider which supplies productivity-enhancing instruments and controls.

The Company’s adjusted operating profit was down by 47 per cent to £44.1 million during the first half of 2020 (H1 2019: £83.5 million). The Company carried out restructuring in the first half and therefore incurred costs of £3.0 million.

Despite a challenging year so far, the company has managed good cash generation; the Company’s cash balances stood at £94.3 million on 30 June 2020. In addition, the Company has reinstated an interim dividend of 21.9 pence per share during its half-yearly results for 2020. SPX shares are going Ex-dividend on 15 October 2020.

Driven by higher competition, and ongoing challenging market situations, performance during the first half of 2020 was moderate. Given its highly cash-generative nature, the Company remains well poised to stand tall amid challenging market conditions.

4. Bunzl Plc

Bunzl Plc (LON:BNZL) is an international service and distribution company which operates in the B2B segment.

Despite the unprecedented adversaries posed by the Covid-19 pandemic, Bunzl demonstrated consistent growth in top-line and bottom-line results in the income statement. Therefore, the fundamental aspects of business remain attractive with robust cash generation along with a consistent record of dividend growth.

The Company remained committed to a 27-year dividend growth track record with a final dividend of 35.8 pence per share; interim dividend surged by 1.9 per cent to 15.8 pence during the first half of 2020. BNZL shares are going Ex-dividend on 15 October 2020.

Despite a challenging trading environment, the Company has demonstrated the strength of supply chain and customer proposition along with a resilient business model during the first half of 2020.

5. BAE Systems Plc

BAE Systems Plc (LON: BA) is an FTSE 100 listed Company which specialises in defence systems. The Company started the year 2020 well with a strong financial position. The order backlog has increased to £46.1 billion during the first half of 2020. The Company for the first half of 2020 (period ended 30 June 2020) had announced an interim dividend per share of 9.4 pence. BAE Systems shares are going Ex-dividend on 22 October 2020.

For 2020, it expects underlying earnings per share to be slightly lower than the previous year (2019). In addition, the Company has completed two acquisition during the first half of 2020, which shall provide a significant boost to sales volume this year. The demand for defence systems remains stable as it plays a prominent role in supporting national security, and therefore, the Company is expecting a stronger performance in the second half of 2020.

Due to a huge amount of volatility in the stock markets, even the long-term investors have resorted to saving cash rather than deploying their ‘buying and hold’ investment strategy. The economic activities across the UK have picked up pace, and a major QoQ improvement in the performance is widely expected as the government has allowed businesses to operate with enhanced security measures. Thus, income-seeking investors can think of returning to stock markets.