Today I am looking at three FTSE-listed lovelies poised to deliver excellent dividend flows.
National Grid
Due to electricity’s role as an essential commodity in the modern world, I believe that National Grid (LSE: NG) (NYSE: NGG.US) should deliver strong bottom-line expansion in the years to come, and with it dependable dividend hikes. The firm is also undertaking aggressive asset accumulation in both the UK and US to boost its earnings prospects, while RIIO price controls in its home markets are helping to mitigate cash outflows and further boost the dividend picture.
Even though earnings are expected to have fallen 15% in the year concluding March 2015 due to heavy capital expenditure, National Grid is still expected to lift the total dividend from 42.03p per share last year to 43.5p in the outgoing 12-month period. And further lifts are pencilled in by the City, to 44.8p and 45.4p, in fiscal 2016 and 2017 respectively as the electricity play returns to earnings growth.
Consequently National Grid’s market-busting dividend yield of 4.9% rises to an even-more appetising 5.1% through to the close of 2017.
British American Tobacco
Like National Grid, I believe that the defensive qualities associated with tobacco plays such as British American Tobacco (LSE: BATS) makes the London firm a strong candidate for those seeking sterling income prospects. While it is true that rising health concerns amongst consumers has battered sales in recent times, I believe that rising spending power and population levels in key developing regions should keep earnings driving higher in coming years.
A slight earnings improvement in 2015 is anticipated to push British American Tobacco’s full-year payout from 148.1p per share in 2014 to 156.2p this year. And a further chunky lift, to 160.8p, is predicted by the number crunchers for 2016 as earnings nudge 8% higher.
As a result the cigarette manufacturer’s meaty yield of 4.4% for 2015 edges to an even-more appetising 4.5% for next year. With British American Tobacco also investing heavily in its critical growth brands like Rothmans and Lucky Strike, as well as ramping up its exposure to the lucrative e-cigarette sector, I expect earnings and consequently dividends to keep ticking higher.
Ashmore Group
Financial services play Ashmore (LSE: ASHM) has managed to maintain proud history of raising the dividend in spite of recent earnings fluctuations. And with sentiment towards critical emerging markets continuing to improve, I believe that the company is in great shape to enjoy a solid bounceback from this year onwards as business flows improve.
Indeed, the City’s army of analysts expect an 8% earnings advance for the year concluding June 2015 to shove the dividend from 16.45p per share in fiscal 2014 to 17.2p this year. And a marginal bottom-line improvement next year drives the payout to an even juicier 18p.
Such projections push the yield from an eye-popping 5.9% for this year to 6.2% in 2016. Although investors should be aware of the effect of weak commodity prices and uncertainty surrounding Federal Reserve rate changes, I believe that Ashmore’s focus towards new geographies — combined with the effect of stringent cost-cutting — should continue to deliver exceptional dividend growth.
