Bodycote PLC (LON: BOY), British American Tobacco plc (LON: BATS) and Man Group PLC (LON: EMG) announce higher payouts.
The FTSE 100 looks to be ending the week on a down note, falling 45 points to 6,316 by mid-afternoon -- it has been a bit erratic today as various companies' results announcements have unfolded. Still, ending the week above 6,300 won't be too bad a result.
The index of top UK shares offers an average dividend yield of around 3% at the moment, and income investors will be looking for companies that can beat that. Here are three that have raised their dividends this week:
Aerospace engineer Bodycote (LSE: BOY), whose shares have soared around 30% over the past 12 months to today's 545p, raised its full-year dividend by 12.8% to 12.3p per share on Wednesday, after reporting a 19.3% rise in basic earnings per share to 35.8p
That payout represents a yield of 2.3% on today's price, and continues a record of dividend growth. And it was covered threefold, so forecasts for a rise to 13.4p for the year ending December 2013 and 14.6p for 2014 are probably realistic, especially after chief executive Stephen Harris told us that "...at this early stage in the year the Board expects modest progress in 2013".
British American Tobacco
Smoking might not be good for your health, but it's certainly good for profits, as British American Tobacco (LSE: BATS) (NYSE: BTI.US) showed on Thursday. With revenues up 4% to £16 billion and earnings per share up 26% to 198.1p, the company was able to boost its 2012 full-year dividend by 7% to 134.9p -- that's a yield of 3.9% on today's share price of 3,464p.
The firm has been steadily growing its earnings and lifting its dividend payouts for years, with a regular yield of around the 4% mark, and that looks set to continue for this year and next.
Investment manager Man Group (LSE: EMG) announced a final dividend of 12.5 cents on Thursday, taking its full-year payout to 22 cents per share, up a modest 0.5% on last year. That's around 15p per share, and on the current share price of 96p it represents a yield of 16%.
That level of payout significantly exceeds earnings and is clearly not sustainable, but the firm did also announce a new dividend policy. In future years, the intention is to pay out at least 100% of adjusted management fee income as dividends. Based on 2012's fees of £223 million, that would provide a yield of about 6%, which is pretty healthy.
Finally, dividend rises like these three are always welcome, and companies that manage steady payouts form the cornerstones of many a portfolio -- whether investing for income or growth, good old cash is always welcome.
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> Alan does not own any shares mentioned in this article.