The FTSE 100 (FTSEINDICES: ^FTSE) has been hovering uncertainly this week. Upbeat comments from China suggesting the country’s growth would remain relatively strong gave the mining sector a boost early in the week, and it looked like we might be in for our fifth weekly rise in a row. But things have turned tail a little today, with the index down 50 points to 6,570 at the time of writing.
In uncertain terms, investors can always look to dividends as a cushion, and the FTSE 100 is offering an average yield of around 3.2% — not bad in such low-interest times. But which companies are raising their dividends? Here are three that did it this week:
On Monday, lighting and signals specialist Dialight (LSE: DIA) released mixed first-half figures, but raised its interim dividend by a cool 22.5% to 4.9p per share. That came despite underlying pre-tax profit falling 35% to £5.4m, which was blamed on “repositioning of obstruction signals business“. Revenue for the period was up 13% to £59.9m.
Dialight has been steadily lifting its dividend year-on-year, and City analysts are currently predicting a full-year payment of 15.3p per share. On the current share price of 1,182p, that would provide a yield of just 1.3%, but after the strong rise in the first-half payout, the full-year expectation may well be revised upwards now.
On Tuesday, specialist chemicals producer Croda International (LSE: CRDA) lifted its interim dividend by a handsome 8.4% to 29p per share, after reporting a 6.3% rise in pre-tax profit from continuing operations.
Croda shares haven’t had a great year, gaining just a couple of percent over the past 12 months to 2,416p. That’s despite five consecutive years of earnings and dividends rises, with both expected to grow again this year and next — although at a slower pace than before. Still, the shares are on a forward P/E of 18 now, and the dividend yield is around a relatively modest 2.5%.
ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) isn’t exactly known as a big dividend payer — few technology shares in their growth years are. But on Wednesday, the chip designer lifted its first-half payment by a relatively big 26% to 2.1p per share. That does only represent a return of 0.2% on the current share price of 845p, mind, and current forecasts do suggest a full-year yield of only 0.6%.
Still, at least the dividend is starting to grow, and ARM should presumably be offering something decent by the time the current forward P/E of 43 comes down closer to the long-term FTSE average (hopefully due to rising earnings rather than a falling price).
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> Alan does not own any shares mentioned in this article.