3 Of The Best Dividends In The FTSE 100: GlaxoSmithKline plc, J Sainsbury plc And Centrica PLC

I’ve scoured the FTSE 100 to find companies that pass a strict set of dividend criteria. GlaxoSmithKline plc (LON:GSK), J Sainsbury plc (LON:SBRY) and Centrica PLC (LON:CNA) are three of the four companies* that qualify .

| 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.

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.


As a provider of pharmaceutical products, GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) has a high degree of visibility of its future sales and profits. This results in the company being one of the most reliable dividend payers in the FTSE 100.

The Glaxo dividend has been increasing year-on-year for more than ten years. In the last five years, it has been increased at an average rate of 6.9% a year.

Two years of earnings and dividends growth are forecast at Glaxo. Analysts estimate that the company will report a 17.8% increase in earnings per share (EPS) this year, followed by a 10.4% rise in 2014. The dividend is expected to be hiked by 5.1% this year and 5.7% the next.

At today’s share price, that puts Glaxo on a 2014 P/E of 13.6, with an expected yield of 4.7%.

J Sainsbury

As Tesco‘s growth has stalled and Morrisons looks at risk of going into reverse, J Sainsbury (LSE: SBRY) continues to power ahead. In its most recent trading statement, the company confirmed its 34th successive quarter of sales growth.

Over the next two years, profit growth is expected to outstrip dividend growth, helping secure the Sainsbury’s payout.

Analysts have pencilled in 5.4% of earnings growth this year, and 7.5% growth to follow. The dividend is forecast to rise 3.7% this year and 4.0% the next. If these projections come good, then Sainsbury’s is trading on a 2015 P/E of 11.1, with an anticipated yield of 4.8%.

Although there are bigger yields available, there are few better than Sainsbury’s.


Centrica (LSE: CNA) is the company behind the British Gas utility brand . Utilities are frequently considered reliable, big dividend payers. Centrica is no exception.

In the last five years, the company has delivered successive annual dividend increases. Dividend growth has outstripped inflation in that time — increases have averaged 7.2% per annum.

Centrica shares today trade on 13.5 times earnings forecasts for 2013. The average FTSE 100 stock trades at 14.1 times.

Centrica’s shares are forecast to yield 4.6% for the year. The average FTSE stock is expected to pay just 3.0%. Dividend cover is around 1.6 times, suggesting that future payouts and increases can be expected.

Our team of analysts here at The Motley Fool believe that they have found an even better income share than any of these three. Their in-depth analysts of this blue-chip dividend opportunity can be found in the Motley Fool report “Power Up Your Portfolio”. This research is 100% free and will be delivered to your inbox immediately. Just click here to start reading today.

> David does not own shares in any of the above companies mentioned above. The Motley Fool owns shares in Tesco.

*the fourth company to qualify is BAE Systems.

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.

More on Investing Articles

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

Why the FTSE 250 looks an incredible bargain

While all the attention is on the elite FTSE 100, the mid-cap FTSE 250 index looks unbelievably cheap. I don't…

Read more »

2024 year number handwritten on a sandy beach at sunrise
Investing Articles

Here’s my plan to make the most of juicy UK shares ahead of 2024 and beyond!

Our writer reckons there hasn't been a better time to snap up quality UK shares. She explains how she's planning…

Read more »

Young Black woman using a debit card at an ATM to withdraw money
Investing Articles

Here’s how many Lloyds shares I’d need to buy for a £100 monthly income!

Offering a higher dividend yield than the average across FTSE 100 stocks, are Lloyds shares worth buying for passive income…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

Up 27% in 2023, what next for the Tesco share price in 2024?

The Tesco share price has had a great 2023, rising 27% while the FTSE 100 was flat. But what might…

Read more »

Hand is turning a dice and changes the direction of an arrow symbolizing that the value of an ETF (Exchange Traded Fund) is going up (or vice versa)
Investing Articles

FTSE 250? No, I’d buy this index fund instead

Investing in index funds can be a profitable enterprise. Our author has been exploring the different options to determine the…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

This 4% yielding FTSE 100 giant is dirt-cheap and perfect for passive income!

Looking for a mammoth business with shares trading at discount levels and offering an excellent passive income opportunity? Our writer…

Read more »

UK money in a Jar on a background
Investing Articles

Here’s how I’d use dividend shares to try and turn £5,000 of savings into passive income of £900 a year

With dividend shares at today’s prices, Stephen Wright thinks there are two ways to turn a £5,000 investment into something…

Read more »

Investing Articles

After a recovery that Lazarus would have been proud of, is the easyJet share price worth a look?

With its dividend restored and its balance sheet repaired, the easyJet share price looks like a bargain. But Stephen Wright…

Read more »