3 FTSE 100 Dividends Lifted This Week
LONDON -- The FTSE 100 is a bit more settled today, just two points above breakeven after Federal Reserve Chairman Ben Bernanke calmed fears concerning U.S. economic-stimulus policy. Thoughts have also moved on from possible Italian election fallout.
But what of dividends? The average payout from FTSE 100 companies is around the 3% mark at the moment, and rising dividends are usually a sign of fundamental company strength. Here are three FTSE 100 companies that have announced dividend boosts this week.
Publisher Pearson, best known for the Financial Times and Penguin Books, raised its full-year dividend by 7% to 45 pence per share on Monday when revealing 2012 results. Sales rose 5% to 6.1 billion pounds, but earnings slipped by 2.7% to 84.2 pence per share.
On today's share price of 1,142 pence, the dividend represents a yield of 3.9%, which is ahead of the FTSE 100 average. Pearson has kept its dividends growing throughout the recession. And there are forecasts for further rises, which should be well covered, for the next two years.
After making a loss and not paying a dividend in 2009, GKN has come back strongly. The car and plane parts maker reinstated its payout in 2010 and has been raising it every year since. And on Tuesday, better-then-expected profit enabled the firm to lift its 2012 dividend by 20% to 7.2 pence per share.
At the current price of 262 pence per share, that's a yield of 2.7%. It's not the biggest yield on the market, but it was more than 3.5 times covered. And based on 2013 forecasts, the shares are on an undemanding forward price-to-earnings ratio of less than 10.
Also on Tuesday, speciality chemicals maker Croda International announced an 8.2% boost to its annual dividend to 59.5 pence per share -- a yield of 2.3% based on today's share price of 2,558 pence. That was made possible by a 6.6% rise in pre-tax profit to 253.2 million pounds and a rise in EPS from continuing operations of 8.2% to 130 pence.
Over the past few years, Croda has enjoyed a record of steady rises in earnings and dividends, and the latest forecasts suggest that this growth will continue this year and next.
Dividend rises like these three are always welcome, and companies that manage steady payouts form the cornerstones of many a portfolio. Whether you're investing for income or growth, good old cash is always welcome. And that's why I recommend the brand-new Fool report "The Motley Fool's Top Income Share For 2013," in which our top analysts identify a share that they believe will provide handsome dividend income for years to come. But it will only be available for a limited period, so click here to get your copy today.
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