After this week’s “Will they, won’t they … no they won’t” hand-wringing over stimulus tapering by the US Federal Reserve, there seems little left today for the markets to worry about, and the FTSE 100 (FTSEINDICES: ^FTSE) is so far having a quiet day just 5 points up at 6,620 approaching midday.
If you’re the kind who worries about these ups and downs, you can take comfort from the FTSE’s average dividend yield of 3.2%, which really isn’t bad in these low-interest times.
But which companies are upping their payments? Here are three from the indices doing that this week:
On Wednesday, Smiths Group (LSE: SMIN) released full-year results, and they seemed modestly positive. Revenue for the year to 31 July was up 2% to £3.1bn, though the engineering group recorded no change in underlying pre-tax profit or earnings per share (EPS). But that was in line with expectations, and there was good news on the dividend front.
A final dividend of 27p per share is to be paid, taking the total for the year up 4% to 39.5p and maintaining cover at around 2.5 times — on today’s price of 1,390p, that’s a yield of 2.8%. And with the firm’s cash flows being “more than adequate to meet the immediate investment needs of the business“, £118m will be returned to shareholders in the form of a 30-per-share special dividend.
Housebuilding and construction firm Galliford Try (LSE: GFRD) also brought us full-year results, on Tuesday, and this time we saw some nice gains. Though revenue dropped 2% to £1.47bn, pre-tax profit was up 17% to £74.1m with EPS up 18% to 71.7p.
A final dividend of 25p boosted the annual payment by 23%, to 37p per share — and that provides an above-average yield of 3.5% on the latest share price of 1,050p. The shares have gained more than 50% over the past 12 months.
It was a fine week for housebuilders this week, with Redrow (LSE: RDW) reporting good full-time figures on Wednesday. This time, revenue soared by 26% to £605m, with completions up 15% and the average selling price up 11.8% to £212,300. Margins improved too, helping take pre-tax profit up 63% to £70m and adjusted EPS up 45% to 15.7p.
After three years without a dividend, shareholders are to get 1p per share this time. That’s only a 0.4% yield, but it’s a step back in the right direction — and at 239p, Redrow shares also show an annual gain of more than 50%.
Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.
Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.
The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.
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> Alan does not own any shares mentioned in this article.