COMMENT
Ten Facts About Booming Blue-Chip Dividends

Blue-chip dividends are booming. Here are ten facts you should know:

1.  Average increase of 10%: So far this year, 59 FTSE 100 companies have released full-year or interim results. And the average dividend hike reported has been an impressive 10%. A list of the 59 shares is at the end of this article.

2. The largest increases: The top six payout hikes came from Centrica (LSE: CNA) (up 59%), BHP Billiton (LSE: BLT) (up 51%), British Sky Broadcasting (LSE: BSY) (up 45%), Capita (LSE: CPI) (up 34%), William Hill (LSE: WMH) (up 32%) and Reckitt Benckiser (LSE: RB.) (up 21%).

3. And more big increases: A further sixteen FTSE companies have lifted their dividend between 10% and 20%.

4. Welcome a maiden payer: Shire Pharmaceuticals (LSE: SHP) was the sole FTSE 100 member to join the dividend list in 2004.

5. Only three no changes: Only three FTSE companies maintained their payout in 2004: Lloyds TSB (LSE: LLOY), Rolls-Royce (LSE: RR.) and Reuters (LSE: RTR).

6. Just the one disappointment: Just one blue chip cut its dividend last year: Amvescap (LSE: AVZ), with a 35% reduction. (No blue chip scrapped its payout entirely.)

7. Shame about the adverse currency fluctuations though: The weakening US dollar hampered 2004 payout growth at many big-name firms. This table lists those blue chips declaring dollar-denominated dividends and the approximate increases in sterling terms:

(*interim payment)

Had the US dollar not weakened in 2004, the payments from the above nine shares would have improved the average increase of the 59 blue chips from 10% to 12%.

8. There were some special payments, too: Special dividends were declared by Centrica and Antofagasta (LSE: ANTO) during 2004, while Whitbread (LSE: WTB) and William Hill have indicated that shareholders will receive one-off returns in 2005.

9. FTSE down but dividends up: Despite the FTSE 100 being 22% below its level of five years ago, the leading index is now paying out 15% more in dividends:

Indeed, FTSE statistics indicate the past twelve months have seen aggregate blue-chip payouts jump 10% -- in line with the average so far reported this year.

10. So, this market is cheap: Booming dividends, a low price to earnings (P/E) ratio and massive share buybacks make the FTSE 100 a buy. You can prosper from blue-chip dividends in 2005 and beyond through a low-cost index tracker. Learn more here.

Maynard owns shares in GlaxoSmithKline, iShares FTSE 100 (an exchange-traded fund that tracks the FTSE 100 index) and contributes regularly to an index tracker.

(*Interim payout **Based on 58 dividends, excludes Shire Pharmaceuticals)