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Summary
- Dividend-paying stocks attract investors as they act as a passive source for generating income.
- An investor may choose to re-invest or take it out as regular payment depending upon the need.
Since most people invest in the stock market in anticipation to make profits, dividend becomes an essential aspect while selecting a company as it acts as a passive source for income generation. While some investors choose to re-invest the dividend, some may opt-out to receive it as a regular payment.
To select a good dividend-paying company, one should keep track of its dividend yield. The dividend yield is the ratio calculated by dividing the dividend paid to its shareholders each year by the market price of each share.
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Let us look at five FTSE companies with above 7% dividend yield:
Hammerson Plc (LON: HMSO)
Hammerson is a UK-based company that develops and invests in potential properties. Hammerson provides approximately 1.8 million square metres of space for brands across seven countries. Earlier in June, the company submitted plans for the regeneration of an important 5.5 acre Dublin site to include a fully integrated Metrolink station for O’Connell Street.
The company has paid a final dividend of 2 pence per share in the month of May 2021; however, the company had paid a similar amount as an interim dividend in December 2020.
The company holds a market capitalisation of £1,582.17 million and has an annual dividend yield of 10.62%.
Imperial Brands Plc (LON: IMB)
Imperial Brands is the fourth-largest tobacco company globally and operates in 120 markets. Some of the brands under its umbrella are Davidoff, Parker & Simpson, Lambert & Butler, L&B, Knox, cigars, heated tobaccos and Rizla.
The company has paid 21.06 pence per share as the last interim dividend in June 2021; however, the company has announced to pay a similar amount of dividend in the coming quarter.
The company holds a market capitalisation of £14,834.95 million and has an annual dividend yield of 8.81%.
M&G Plc (LON: MNG)
Headquartered in London, M&G manages and invests in a wide range of assets such as equities, fixed income and real estate. It aims to provide financial security to middle-class professionals. The company is an FTSE100 index constituent.
The last interim dividend paid by the company was 12.23 pence per share in April 2021, while it had paid an interim dividend of 6.0 pence per share in September 2020.
The company holds a market capitalisation of £5,948.59 million and has an annual dividend yield of 7.97%.
Persimmon Plc (LON: PSN)
Founded in 1972, Persimmon is a household goods and home construction company. The company has 31 offices across the country and construct the house of size ranging from a studio apartment to high executive families. Demand for newly built homes remains high, and the Group has encouraging sales rates as per the trading update released by the company on 28 April.
The FTSE100 constituent’s last paid interim dividend was 125 pence per share in March 2021, compared to the 70 pence per share dividend paid in December 2020.
The company holds a market capitalisation of £9,512.37 million and has an annual dividend yield of 7.88%.
British American Tobacco (LON: BATS)
The FTSE100 company is one of the world’s largest tobacco and cigarettes manufacturers. As a part of its expansion plan, the company has bought a 20% stake in the Canada-based cannabis producing company, OrganiGram, for about £126 million.
The last interim dividend paid by the company was 53.9 pence per share in May 2021; however, the company has declared a similar dividend for the next three quarters, which are due to be paid in August, November, and February 2022.
The company holds a market capitalisation of £64,903.25 million and has an annual dividend yield of 7.62%.
