Diverse Income Share Discussion Threads

[aleman] 04/2/2022 14:12

EAT yield 7.1% at 123p and HFEL yield 8.1% at 292p. These are European and Far Eastern investment trusts that look a good way to gain unusually high foreign yields with risk reduction brought about by diversification. (EAT pay 6% of year end assets so could pay a slightly lower dividend next year if NAV remains reduced this year.)

[gary1966] 04/2/2022 13:31

Not yet but Steppe Cement(STCM) could well pay 5p this year which would be 12.5% at 40p currently. 3.5p presently and so a not too shabby 8.75%.

[aleman] 18/12/2021 13:39

My latest post on the DEC thread.

Aleman
18 Dec '21 - 12:21 - 2039 of 2039 Edit
0 0 0
My cheque came today, which is pretty good allowing for posties isolating and Christmas volumes. I sent in a W8BEN and currency election a couple of months ago and recieved a Sterling cheque less 15% withholding tax at an exchange rate of $1=£0.74864. It's worked out at 2.545p per share. After the recent dividend rise to 4.25 cents, which will hopefully continue, that would be an annual yield of 10.8p. That's 10.6% @ 102p.

Can anybody beat a dividend that has just risen to a 10.6% yield?

[grupo guitarlumber] 06/12/2021 08:40

The Hague, December 6, 2021 - The Board of Royal Dutch Shell plc ("RDS") today announced the pounds sterling and euro equivalent dividend payments in respect of the third quarter 2021 interim dividend, which was announced on October 28, 2021 at US$0.24 per A ordinary share ("A Share") and B ordinary share ("B Share").

Dividends on A Shares will be paid, by default, in euros at the rate of EUR0.2121per A Share. Holders of A Shares who have validly submitted US dollars or pounds sterling currency elections by November 26, 2021 will be entitled to a dividend of US$0.24 or 18.06p per A Share, respectively.

Dividends on B Shares will be paid, by default, in pounds sterling at the rate of 18.06p per B Share. Holders of B Shares who have validly submitted US dollars or euros currency elections by November 26, 2021 will be entitled to a dividend of US$0.24 or EUR0.2121per B Share, respectively.

Euro and pounds sterling dividends payable in cash have been converted from US dollars based on an average of market exchange rates over the three dealing days from 1 December to 3 December 2021.

This dividend will be payable on December 20, 2021 to those members whose names were on the Register of Members on November 12, 2021.

Taxation - cash dividend

Cash dividends on A Shares will be subject to the deduction of Dutch dividend withholding tax at the rate of 15%, which may be reduced in certain circumstances. Non-Dutch resident shareholders, depending on their particular circumstances, may be entitled to a full or partial refund of Dutch dividend withholding tax.

If you are uncertain as to the tax treatment of any dividends you should consult your tax advisor.

Note

A different currency election date may apply to shareholders holding shares in a securities account with a bank or financial institution ultimately holding through Euroclear Nederland. This may also apply to other shareholders who do not hold their shares either directly on the Register of Members or in the corporate sponsored nominee arrangement. Shareholders can contact their broker, financial intermediary, bank or financial institution for the election deadline that applies.

[waldron] 02/12/2021 04:49

HOUSTON (December 1, 2021) -- Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has completed the sale of its interest in the Permian to ConocoPhillips for $9.5 billion in cash. The agreement covers the sale of Shell's 225k net acres and existing production of around 175 thousand barrels equivalent per day.

As noted in the announcement of the agreement for the sale of Shell's Permian business, this deal reflects Shell's focus on value over volumes as well as disciplined stewardship of capital. This transaction was made possible by the Permian team's outstanding operational performance and provides excellent value to our shareholders through accelerated cash delivery and additional distributions.

As previously announced, the cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions with the remainder used for further strengthening of the balance sheet. The first tranche of additional shareholder distributions will be in the form of share buybacks of up to $1.5 billion and will commence on December 2, 2021. The form and timing for distributing the remaining $5.5 billion will be announced in early 2022. These distributions are in addition to our shareholder distributions in the range of 20-30% of cash flow from operations.

[sarkasm] 06/11/2021 14:36

Shell looks bulletproof – for now

Shell sent shockwaves around the City last April when CEO Ben van Beurden cut the dividend by 65%. I think it was the right decision. The old payout just wasn’t affordable.

The good news is that Shell’s new dividend looks pretty safe to me. It’s also growing steadily and, after oil prices bounced back this year, van Beurden lifted Shell’s dividend by 38% at the half-year mark.

This was a one-off increase and Shell has told shareholders to expect a 4% increase each year. However, City analysts reckon the firm will do better than this. They’re forecasting a 10% dividend increase for 2022. If they’re right — and I think they could be — that would give Shell a 2022 forecast yield of 4.1% at current levels.

It’s too soon to know whether this fossil fuel producer can reinvent itself as a low-carbon energy business. It’s a tough task. But I’m comfortable with Shell today and would be happy to buy the shares for income in 2022.

[waldron] 28/10/2021 08:48

TotalEnergies maintained its third interim dividend payment at 0.66 euros ($0.77) a share and confirmed the completion of the $1.5 billion share repurchases in the fourth quarter.



Write to Giulia Petroni at [e-mail]



(END) Dow Jones Newswires

October 28, 2021 02:57 ET (06:57 GMT)

[grupo guitarlumber] 10/10/2021 07:51

Banks to pay £7bn dividend bonanza: Big five lenders defy economic crunch to release extra cash - as profits soar to highest since 2008

Lloyds Banking Group, HSBC, Barclays, NatWest and Standard Chartered – are set to report pre-tax profits totalling £33billion for 2021

We can reveal that senior bankers are in talks with the Bank of England about releasing cash set aside for bad loans in time for their quarterly earnings report

Analysts expect the big five will pay out £7billion in dividends this year, up from £3.3billion last year – in addition to share buybacks

By Emma Dunkley, Financial Mail On Sunday

Published: 21:50 BST, 9 October 2021 | Updated: 23:40 BST, 9 October 2021

[florenceorbis] 25/9/2021 16:53

One has to just love divis when share prices are going nowhere sometimes

[waldron] 07/9/2021 22:33

Published in:
Investing

7th September 2021

Tax on share dividends to increase by 1.25%. Here’s what it means for investors
Updated:

by
Karl Talbot

| 3 min read

Tax on share dividends to increase by 1.25%. Here’s what it means for investors







The government has announced a 1.25% increase in the tax on share dividends that will apply from April 2022. The news comes at the same time as it was announced that National Insurance contributions will increase by 1.25% next year.

The government says the rises will help fund health and social care in England. Both announcements are subject to a vote in the House of Commons.

So if you’re an investor, what does the new tax on share dividends mean for you?

Here’s what you need to know.

How much tax is currently paid on share dividends?

If you’re an investor, you currently get a dividend allowance of £2,000. So, if you receive dividends worth £2,000 or less, you don’t have to pay any tax on them.

For dividends of more than £2,000, the amount of tax you pay depends on your income tax band. This is unless your investments are held in an ISA, in which case your dividend payments remain tax free.

For non-tax-efficient investments, you must pay 7.5% tax on any dividends over £2,000 if you’re a basic rate taxpayer. If you’re a higher rate taxpayer, you must pay 32.5%, and it’s 38.1% if you’re an additional rate taxpayer.

You can find more information on income tax bands on the gov.uk website.

What are the changes to dividends tax?

From April 2022, the government is implementing a 1.25% rise in the tax on dividends to help fund social care. Analysts expect that the move will raise up to £600 million, with the majority of payers coming from the top 10% of households.

The new tax will not, however, apply to investments held within an ISA.

Why has dividends tax increased?

With a National Insurance hike of 1.25% also announced, many analysts feel that the dividends tax is a way for the government to show that it is keen to increase taxes on asset holders as well as those who rely on a working income.

Critics of the National Insurance hike have repeatedly pointed to the fact that it will not apply to most pensioners, landlords or those living off income from assets, suggesting that only those relying on a working income face the burden.

National Insurance, by definition, is also a regressive tax, meaning that an increase disproportionately impacts those on lower incomes. That’s because the amount of contributions you have to make, at a percentage level, decreases at higher incomes.

However, critics of the dividend tax rise consider it a token gesture. That’s because the 1.25% rise won’t apply to investments held in an ISA.
How has industry reacted?

Commenting on the changes, Tom Selby, head of retirement policy at AJ Bell, says that investors should now take the time to examine their portfolios in order to ensure they aren’t inadvertently paying more tax than they need to.

He explains: “The increase in dividend tax means people investing outside tax-sheltered wrappers like pensions and ISAs should review their portfolios to make sure they are making as much use as possible of their annual contribution allowances to keep their tax bills as low as possible.”

Will the tax increase definitely go ahead?

MPs will vote on the government’s health and social care plan, including the planned dividends tax rise, on Wednesday 8 September at 7pm.

While a number of cross-party MPs do not approve of the proposals, the policy is expected to pass through the House of Commons.

MyWalletHero…

[waldron] 07/9/2021 21:25

Moneyfacts

Triple lock suspended but pensions will still rise

Derin Clark
Online Reporter

Published: 07/09/2021


Today the Government announced that the triple lock will be suspended for one year, however state pension will still rise next year by 2.5% or in line with inflation.

Making an announcement in the House of Commons Work and Pensions Secretary Therese Coffey, announced that a Social Security Uprating and Benefits Bill would be introduced for 2022-23 which will result in the basic and new state pensions increasing by 2.5% or in line with inflation.

The announcement of the new Bill means that the triple lock - which sees the state pension rising by either inflation, average earning growth between May and July, or by 2.5% - being suspended for one year. Due to the post-pandemic rise in average wages, if the triple lock had been kept this year it would have seen the state pension increasing by 8%.

1.25% tax increase announced

The suspension of the triple lock comes on the same day that Prime Minister Boris Johnson announced that a new health and social care tax will be introduced to pay towards funding social care and the NHS.

The tax will start from April 2022 with a 1.25 percentage point increase in National Insurance (NI) paid by both employers and employees. From 2023 it will become a separate tax on earned income which will be calculated in the same way as NI.

In addition to this, income from share dividends will also see a 1.25% tax increase.

[adrian j boris] 07/9/2021 14:32

TotalEnergies Is A Better Dividend Income Stock Than Exxon, Chevron, BP And Shell

Sep. 07, 2021 8:00 AM ETTotalEnergies SE (TTE), TTFNFBP, BPAQF, CVX...

Summary

TotalEnergies has solid financial results with lower losses compared to its peers among the Majors.

But a European shareholder base and not being in US indexes has kept it off the radar.

Dividend investors should look to TotalEnergies as much as Exxon, Chevron, BP or Shell when looking for income.

[la forge] 06/9/2021 09:44

Royal Dutch Shell plc second quarter 2021 Euro and GBP equivalent dividend payments

Sep 6, 2021

The Board of Royal Dutch Shell plc (“RDS”) today announced the pounds sterling and euro equivalent dividend payments in respect of the second quarter 2021 interim dividend, which was announced on July 29, 2021 at US$0.24 per A ordinary share (“A Share”) and B ordinary share (“B Share”).

Dividends on A Shares will be paid, by default, in euros at the rate of €0.2024 per A Share. Holders of A Shares who have validly submitted US dollars or pounds sterling currency elections by August 27, 2021 will be entitled to a dividend of US$0.24 or 17.38p per A Share, respectively.

Dividends on B Shares will be paid, by default, in pounds sterling at the rate of 17.38p per B Share. Holders of B Shares who have validly submitted US dollars or euros currency elections by August 27, 2021 will be entitled to a dividend of US$0.24 or €0.2024 per B Share, respectively.

Euro and pounds sterling dividends payable in cash have been converted from US dollars based on an average of market exchange rates over the three dealing days from 1 September to 3 September, 2021.

This dividend will be payable on September 20, 2021 to those members whose names were on the Register of Members on August 13, 2021.


Taxation - cash dividend

Cash dividends on A Shares will be subject to the deduction of Dutch dividend withholding tax at the rate of 15%, which may be reduced in certain circumstances. Non-Dutch resident shareholders, depending on their particular circumstances, may be entitled to a full or partial refund of Dutch dividend withholding tax.

If you are uncertain as to the tax treatment of any dividends you should consult your tax advisor.

[sphere25] 10/8/2021 09:39

Some interesting snippets in this report:

"Whilst numerous business are reporting excellent order books at present, many
are also juggling these with all sorts of supply bottlenecks. Importantly in
our view, many investors assume that the current industry bottlenecks are
transitory. This comfortable position was reinforced over the first half of the
year by the ongoing appreciation of global assets. The significant degree to
which the stock market appreciation was fuelled by the running down the US
Government's cash surplus, and the ongoing Quantitative Easing policy is
largely overlooked.

We are concerned that market liquidity could narrow in future, and new risks
might emerge such as the US Senate starting to game the forthcoming budget
ceiling negotiations. Alongside, the global recovery in the first half was
smoothed by the running down of global inventories. Unfortunately, we are
worried that the component and staffing problems will persist, and the global
economy could struggle to even sustain the output of the first half of 2021.

When this is set in the context of a stock market where corporate valuations
are already standing at very elevated levels, even a slight reduction in market
liquidity could lead to a pullback in stock market valuations. In recent weeks,
a FTSE100 Put with an exercise level of 6,200 and a term to December 2022 has
been purchased, covering 38% of the current portfolio value."

[waldron] 09/8/2021 08:26

Noslien
9 Aug '21 - 08:00 - 5228 of 5229
0 1 0
Rio Tinto and BHP to pay out US$100bn in dividends over next three years predicts JP Morgan

[la forge] 05/8/2021 10:03

Proactiveinvestors

08:39 Thu 05 Aug 2021

Glencore reports record interim profits, a special dividend and a US$650mln share buyback

The mining giant will pay a special cash dividend of US$0.04 a share in September and the US$650mln share buyback is expected to be completed by the release of its full-year results next year, taking its planned 2021 shareholder returns to about US$2.8bn


Glencore PLC (LSE:GLEN) (LSE:GLEN) reported a 79% jump in interim profits on higher commodity prices and announced a special dividend and a US$650mln share buyback alongside a positive outlook.

Adjusted underlying earnings (EBITDA) rose to a record US$8.7bn in the first half for the commodity trading and mining company from US$4.8bn in the year-earlier period.

"Following COVID-19's severe global impacts in early 2020, the subsequent economic recovery has seen prices of most of our commodities surging to multi-year highs amid accelerating demand and lingering supply constraints,” said Gary Nagle in his first results statement since taking over as chief executive on July 1.

“Fiscal and monetary stimulus, successful vaccine roll-outs and increasing momentum in relation to decarbonisation of energy systems should continue to underpin sector sentiment going forward.”

Nagle singled out the outlook for coal in his highlights comment.

“While our coal business was impacted by relatively weak pricing and lower volumes earlier in the year, we anticipate a significantly improved finish to 2021, buoyed by the strong recovery in both thermal and coking coal prices from Q2.”

Industrial adjusted EBITDA (earnings from its mining operations) surged to US$6.6bn, from US$2.6bn in the first half of 2020, on strong metals prices and expanded mining margins.

Adjusted earnings (EBIT) from its trading operations fell 11% from the year-earlier period when oil trading conditions were exceptional, although all key commodity departments made a contribution in the latest six months. It expects its full-year marketing adjusted EBIT to come in at the top end of its long-term US$2.2-US$3.2bn per annum range.

The mining giant will pay a special cash dividend of US$0.04 a share in September and the US$650mln share buyback is expected to be completed by the release of its full-year results next year, taking its planned 2021 shareholder returns to about US$2.8bn.

The above has been published by Proactive Investors Limited

[waldron] 03/8/2021 08:08

cnbc

Oil giant BP ups dividend and confirms share buybacks as it posts better-than-expected quarterly profit

Published Tue, Aug 3 20212:08 AM EDTUpdated 30 Min Ago

Sam Meredith
@smeredith19



LONDON — Oil and gas giant BP beat second-quarter earnings expectations on Tuesday, while expanding its dividend and share buyback program.

The U.K.-based energy major said it will buy back $1.4 billion of its own shares in the third quarter on the back of a $2.4 billion cash surplus accrued in the first half of the year. It also increased its dividend by 4% to 5.46 cents per share, having halved it to 5.25 cents per share in the second quarter of 2020.

It also anticipates buybacks of around $1 billion per quarter and an annual dividend increase of 4% through 2025, based on an estimated average oil price of $60 per barrel.


The energy major posted full-year underlying replacement cost profit, used as a proxy for net profit, of $2.8 billion. That compared with a loss of $6.7 billion over the same period a year earlier and $2.6 billion net profit for the first quarter of 2021.

Analysts polled by Refinitiv had expected second-quarter net profit of $2.06 billion.

“This shows we continue to perform while transforming BP — generating value for our shareholders today while we transition the company for the future,” CEO Bernard Looney said in the earnings statement.

The results reflect a broader trend across the oil and gas industry as energy majors seek to reassure investors they have gained a more stable footing amid the ongoing coronavirus pandemic. The British-Dutch multinational Royal Dutch Shell, France’s TotalEnergies and Norway’s Equinor all announced share buyback schemes last week.

Share prices of the world’s largest oil and gas majors are not yet reflecting the improvement in earnings, however, and the industry still faces a host of uncertainties and challenges.

Shares of BP are up almost 15% year-to-date, having collapsed roughly 47% in 2020.

Operating cash flow sat at $5.4 billion at the end of the second quarter, which includes the annual payment of around $1.2 billion the company makes for the Gulf of Mexico oil spill in 2010.

Meanwhile net debt fell to $32.7 billion from $33.3 billion in the first quarter, marking the fifth consecutive quarter of decreased debt from the $51 billion seen in the first quarter of 2020.

A year out from the announcement of its strategic overhaul, announced in August 2020, the company highlighted that it had built a 21 gigawatt renewable energy pipeline and brought eight major oil and gas projects online.
Stronger commodity prices

BP’s financial results come after a period of stronger commodity prices. International benchmark Brent crude futures rose to an average of $69 a barrel in the second quarter, up from an average of $61 in the first three months of the year.

Oil prices have rebounded to reach multi-year highs in recent months and all three of the world’s main forecasting agencies — OPEC, the International Energy Agency and the U.S. Energy Information Administration — now expect a demand-led recovery to pick up speed in the second half of the year.

It comes after a 12 month period which BP has described as “a year like no other” for global energy markets.

In its benchmark Statistical Review of World Energy, published on July 8, BP said that over the past seven decades the company had borne witness to some of the most dramatic episodes in the history of the global energy system. These crises included the Suez Canal crisis in 1956, the oil embargo of 1973, the Iranian Revolution in 1979 and the Fukushima disaster in 2011.

“All moments of great turmoil in global energy,” Spencer Dale, chief economist at BP, said in the report. “But all pale in comparison to the events of last year.”

The ongoing Covid-19 crisis triggered a historic oil demand shock in 2020, with Big Oil companies enduring a brutal 12 months by virtually every measure. The pandemic coincided with falling commodity prices, evaporating profits, unprecedented write-downs and tens of thousands of job cuts.

Analysts told CNBC ahead of the latest batch of second-quarter earnings that while energy companies were likely to try to claim a clean bill of health, investors were expected to harbor a “tremendous degree” of skepticism about the long-term business models of oil and gas firms. This was predominantly a result of the deepening climate emergency and the urgent need to pivot away from fossil fuels.

[waldron] 29/7/2021 07:42

The Hague, July 29, 2021 - The Board of Royal Dutch Shell plc ("RDS" or the "Company") today announced an interim dividend in respect of the second quarter of 2021 of US$ 0.24 per A ordinary share ("A Share") and B ordinary share ("B Share").

Chair of the Board of Royal Dutch Shell, Sir Andrew Mackenzie commented: "Shell's proven and sustainable cash generation across a range of macroeconomic scenarios has provided the Board confidence to increase shareholder distributions. As a result, the Board has decided to rebase the dividend per share to 24 US cents from the second quarter 2021 onwards."

Details relating to the second quarter 2021 interim dividend


Per ordinary share Q2 2021
RDS A Shares (US$) 0.24
RDS B Shares (US$) 0.24


It is expected that cash dividends on the B Shares will be paid via the Dividend Access Mechanism and will have a UK source for UK and Dutch tax purposes.

Cash dividends on A Shares will be paid, by default, in euros, although holders of A Shares will be able to elect to receive dividends in US dollars or pounds sterling.

Cash dividends on B Shares will be paid, by default, in pounds sterling, although holders of B Shares will be able to elect to receive dividends in US dollars or euros.

The pound sterling and euro equivalent dividend payments will be announced on September 6, 2021.


Per ADS Q2 2021
RDS A ADSs (US$) 0.48
RDS B ADSs (US$) 0.48


Cash dividends on American Depository Shares ("ADSs") will be paid, by default, in US dollars.

RDS A and B ADSs are listed on the New York Stock Exchange under the symbols RDS.A and RDS.B, respectively. Each ADS represents two ordinary shares, two A Shares in the case of RDS.A or two B Shares in the case of RDS.B. ADSs are evidenced by an American Depositary Receipt (ADR) certificate. In many cases the terms ADR and ADS are used interchangeably.

Dividend timetable for the second quarter 2021 interim dividend


Event Date
Announcement date July 29, 2021

Ex- Dividend Date for ADS.A and ADS.B August 12, 2021

Ex- Dividend Date for RDS A and RDS B August 12, 2021

Record date August 13, 2021

Closing of currency election date (see Note August 27, 2021
below)
Pound sterling and euro equivalents announcement September 6, 2021
date
Payment date September 20, 2021


Note

A different currency election date may apply to shareholders holding shares in a securities account with a bank or financial institution ultimately holding through Euroclear Nederland. This may also apply to other shareholders who do not hold their shares either directly on the Register of Members or in the corporate sponsored nominee arrangement. Shareholders can contact their broker, financial intermediary, bank or financial institution for the election deadline that applies.

Taxation - cash dividends

Cash dividends on A Shares will be subject to the deduction of Dutch dividend withholding tax at the rate of 15%, which may be reduced in certain circumstances. Non-Dutch resident shareholders, depending on their particular circumstances, may be entitled to a full or partial refund of Dutch dividend withholding tax.

If you are uncertain as to the tax treatment of any dividends you should consult your tax advisor.

Dividend Reinvestment Programmes ("DRIP")

The following organisations operate Dividend Reinvestment Plans ("DRIPs") which enable RDS shareholders to elect to have their dividend payments used to purchase RDS shares of the same class as those already held by them:

-- Equiniti Financial Services Limited ("EFSL"), for those holding shares
(a) directly on the register as certificate holder or as CREST Member and
(b) via the Nominee Service;

-- ABN-AMRO NV ("ABN") for Financial Intermediaries holding A shares or B
shares via Euroclear Nederland;

-- JPMorgan Chase Bank, N.A. ("JPM") for holders of A and B American
Depository Shares;

and

-- Other DRIPs may also be available from the intermediary through which
investors hold their shares.

Such organisations provide their DRIPs fully on their account and not on behalf of Royal Dutch Shell plc. Interested parties should contact DRIP Offerors directly.

More information can be found at

To be eligible for the next dividend, shareholders must make a valid dividend reinvestment election before the published date for the close of elections.






(END) Dow Jones Newswires

[waldron] 18/7/2021 11:56

THE MOTELY FOOL




FWIW


Telecoms titan Vodafone Group has long been one of the best cash generators on the FTSE 100. This has allowed it to pay above-average dividends to its investors.

City brokers are expecting another annual payout of €0.09 per share this fiscal year, too, resulting in a 6.5% dividend yield.

This makes the company a great buy today, in my opinion, as does its drive to roll out its fixed-line broadband and 5G services across Europe.

I also like the company’s exposure to fast-growing markets in Africa, though swiftly-rising competition in these developing regions could potentially hamper profits generation there.


Royston Wild | Sunday, 18th July, 2021

[waldron] 08/7/2021 19:18

These UK stocks are expected to pay bumper dividends – but beware of broken promises, research says

Published Thu, Jul 8 20214:33 AM EDT

Elliot Smith
@ElliotSmithCNBC

Key Points

AJ Bell highlighted in a report Wednesday that investors will need to look carefully at the 10 firms expected to yield the highest payouts to shareholders this year, since several of them have a record of being forced to cut dividends during challenging times.

Rio Tinto is the highest-yielding individual stock in the FTSE 100, with an expected yield of 12%, followed by BHP at 9.2%, Imperial Brands at 8.7% and Evraz at 8.5%.



LONDON — Total FTSE 100 dividend payments are expected to rise by a quarter this year to £76.9 billion ($106.3 million), meaning the U.K.’s leading index is set to yield 3.7% for 2021, according to data aggregated by British stockbroker AJ Bell.

Meanwhile the index’s average dividend coverage ratio, which measures the number of times a company can pay dividends to its shareholders, has improved to 1.83x, its highest level since 2014.

To supplement the higher dividends, many FTSE 100 companies have begun to announce share buybacks. A total of twelve firms have so far announced buybacks to the aggregate tune of £7.2 billion: Barclays, Berkeley, BP, CRH, Diageo, Ferguson, NatWest, Rightmove, Sage, Standard Chartered, Unilever and Vodafone.


Share buybacks are when a company purchases its own shares from the open market, driving up the share price.

AJ Bell highlighted in a report Wednesday that investors will need to look carefully at the 10 firms expected to yield the highest payouts to shareholders this year, since several of them have a record of being forced to cut dividends during challenging times.



Top 10 yielders

Rio Tinto is the highest-yielding individual stock in the FTSE 100, with an expected yield of 12%, followed by BHP at 9.2%, Imperial Brands at 8.7% and Evraz at 8.5%.

“Forecast of yields in the region of 10% may make investors a little wary, given the shocking record of firms previously expected to generate such bumper returns, including Vodafone, Shell, Evraz itself and – when they were still in the FTSE 100 – Royal Mail, Marks & Spencer and Centrica,” said AJ Bell Investment Director Russ Mould.

“All were forecast to generate a yield in excess of 10% at one stage or another and all cut the dividend instead.”


UK small-cap stocks to continue to benefit in the coming months, strategist says

Mould added that China’s reported discontent with surging iron ore prices may lead some investors to question the likelihood of such a bumper payment from Rio Tinto. Analyst consensus does not anticipate a repeat performance in 2022, he pointed out.

The remaining companies in the top 10 are Persimmon (7.7%), Admiral Group (7.6%), M&G (7.5%), British American Tobacco (7.5%), Anglo American (7.2%) and Phoenix Group (6.9%).

Miners and banks also dominate the list of 10 companies expected to make the biggest individual contribution to the £15.3 billion total increase in FTSE 100 dividends this year, the report highlighted, with HSBC, Barclays, Lloyds and NatWest all featuring.

‘Dividend aristocrats’

Mould suggested that investors will need to assess concentration risk — the danger of having too much exposure to a particular sector or type of stock — when it comes to dividends as well as earnings, an issue often associated with seeking income from the U.K. stock market.

He also highlighted that historically, the highest-yielding stocks do not prove to be the best long-term investments.

“Often defending a high yield can be a burden for a firm, as it sucks cash away from vital investment in the underlying business, or can be a sign that the company is in trouble and investors are demanding such a high yield to compensate themselves for the (perceived) risks associated with owning the equity,” Mould said.

BlackRock: Neutral on U.S. stocks, likes cyclicals, Europe and Japan markets

“The strongest long-term performance often comes from those firms that have the best long-term dividend growth record, as they provide the dream combination of higher dividends and a higher share price – the increased distribution will over time drag the share price higher through sheer force.”

The FTSE 100 currently has 15 firms which can evidence a 10-year dividend growth track record, with nine firms having dropped off that list since the pandemic.

Industrial equipment rental company Ashtead tops the list, with a total return of 3,425.4% between 2011 and 2020, followed by Intermediate Capital at 1,031.1% and the London Stock Exchange at 991.2%.

The firms, which Mould dubs “dividend aristocrats,” are: Scottish Mortgage (865%), Spirax-Sarco (734.8%), Halma (703.4%), Croda (369.4%), RELX (368.6%), DCC (311.8%), Diageo (259.2%), Hargreaves Lansdown (258.7%), United Utilities (175.2%), National Grid (163.5%), Sage (94%) and British American Tobacco (69.9%).