5 Dividend Darlings For Your Stocks Portfolio: Diageo plc, Tullett Prebon Plc, Segro plc, Provident Financial plc And Kier Group plc

Royston Wild explains why Diageo plc (LON: DGE), Tullett Prebon Plc (LON: TLPR), Segro plc (LON: SGRO), Provident Financial plc (LON: PFG) and Kier Group plc (LON: KIE) should all be on the radar of clever dividend collectors.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today I am looking at five stock market stars set to pay out big.

Diageo

I believe that Diageo (LSE: DGE), supported by strident alcohol demand in emerging regions, should deliver exceptional dividend growth in the coming years in line with earnings. The business continues to expand its product ranges in these territories, while it also remains busy on the acquisition trail to boost its global footprint — indeed, just last month Diageo agreed to purchase the outstanding 50% stake in South African beer manufacturer United National Breweries.

With consumer spending power in developing regions already showing tentative signs of recovery, Diageo is expected to lift a dividend of 51.7p per share for the year ending June 2014 to 53.9p this year, and again to 57.8p in 2016. Although these payouts produce handy-if-unspectacular yields of 3% and 3.2%, I expect these readings to shoot higher looking further ahead as the bottom line booms.

Tullett Prebon

Financial services play Tullett Prebon (LSE: TLPR) has seen revenues stagnate in recent times as trading activity has struggled. But signs are emerging that conditions could be about to turn — indeed, improving activity in Asia Pacific and the Americas helped push turnover 15% higher in January-March, to £284m — while energy broker PVM Oil Associates is also exceeding expectations following last year’s takeover.

Tullett Prebon has been forced to keep the dividend frozen at 16.85p per share for the past three years amid consistent profits weakness. But predictions of an imminent return to earnings growth — a 6% rise is anticipated for both 2015 and 2016 — is boosting confidence of a return to positive dividend movement. The City has chalked in payouts of 17.2p this year and 17.6p for 2016, figures which create handsome yields of 4.6% and 4.7% correspondingly.

SEGRO

I reckon that real estate investment trust SEGRO (LSE: SGRO) — which specialises in warehousing and light industrial premises — is in great shape to enjoy the fruits of a brilliant British economic recovery. The latest UK Commercial Property Market Survey by RICS showed rental demand rise for the tenth consecutive quarter during January-March, while the amount of new property listings kept on falling. Clearly these conditions bode extremely well for the London firm.

SEGRO got its dividend policy back on track last year — the payment having been static at 14.8p per share for three consecutive years — in spite of another modest earnings dip, and shelled out a reward of 15.1p. So with earnings anticipated to rise 6% and 4% in 2015 and 2016, the number crunchers expect further dividend hikes for these years, to 15.4p and 15.9p. Consequently SEGRO boasts a chunky yield of 3.7% for this year and 3.8% for 2016.

Provident Financial

Credit house Provident Financial (LSE: PFG) has long been a lucrative pick for dividend chasers, the business having lifted the total payment at a compound annual growth rate of around 12% during the past five years as earnings have exploded. And with both demand — as well as credit quality — rising across its loans, credit cards and car finance divisions, I expect shareholder payments to continue surging ahead.

This view is shared by the City, and Provident Financial is expected to see the bottom line swell by 18% this year and 12% in 2016. Accordingly the lender is anticipated to distribute a dividend of 115.8p per share in 2015, a figure that produces a chunky 3.8% yield. And this readout leaps to 4.2% for next year amid predictions of a 128.4p-per-share payment.

Kier Group

I believe that building and engineering contractor Kier (LSE: KIE) should punch terrific earnings growth in the years ahead as infrastructure spending steadily increases, a promising omen for dividend expansion. And my confidence was boosted by last month’s £265m takeover of Mouchel, the latter being responsible for the upkeep of around a third of the UK’s roads.

With earnings expected to rise 9% in the 12 months concluding June 2015, Kier is anticipated to churn out a total dividend of 73.4p per share, a reward which carries a decent yield of 4.4%. And estimates of a 77.8p-per-share payout next year drives the yield to an even more delicious 4.7%. I believe that Kier’s rising diversification across a myriad of engineering sectors bodes well for both growth and income seekers.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »