3 Neil Woodford Fast Dividend Growers: Legal & General Group Plc, Imperial Tobacco Group PLC and Capita PLC

Legal & General Group Plc (LON:LGEN), Imperial Tobacco Group PLC (LON:IMT) and Capita PLC (LON:CPI) are three of the master investor’s fastest dividend growers.

| 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.

Ace City investor Neil Woodford has thrashed the FTSE 100 over the last five, 10 and 15 years. Hence, I always keep an eye on his holdings for promising investment ideas.

Woodford is very selective in picking shares for his £20 billion funds. Fewer than one in five of the UK’s top 100 companies earn a place in his market-beating portfolios.

Legal & General (LSE: LGEN), Imperial Tobacco (LSE: IMT) (NASDAQOTH: ITYBY.US) and Capita (LSE: CPI) have notable records as fast dividend growers:

Company Share price Average annual dividend growth (4 years) (%) Forecast yield (%)
Legal & General 201p 18 4.5
Imperial Tobacco 2,282p 14 5.0
Capita 1,002p 13 2.5

Legal & General

Woodford made a great call in dumping big financial stocks ahead of the global banking crisis. However, the master investor has now dipped his toe back into FTSE 100 financials, recently purchasing Legal & General.

This insurer has delivered average annual dividend growth of 18% over the last four years. The analyst consensus is for more strong growth to come. The City experts see a further 18% increase in the payout this year and a 13% rise for 2014. At a current share price of 201p, the forecasts give a yield of 4.5%, rising to 5.1%.

Imperial Tobacco

Woodford has been heavily invested in the tobacco sector for many years. The leading UK and US firms are among his largest holdings. Lately, he’s cranked up his stake in Imperial Tobacco.

This company has increased its annual dividend by an average of 14% over the last four years. The board upped this year’s interim payout by 11%, and the analyst consensus is for the rise to carry through to the full year, with a similar increase next year. At a current share price of 2,282p, the forecasts give a yield of 5.1%, rising to 5.6%.


Woodford’s bets on companies in the support services sector are currently experiencing mixed fortunes. G4S and Serco are both suffering a torrid time, but Capita — which operates across most industry sectors — continues to go from strength to strength.

This outsourcing group has rewarded shareholders with average annual dividend growth of 13% over the last four years. Analysts see growth of around 10% this year and next. Capita has been well supported by investors, and at a current share price of 1,002p the dividend yield is most definitely on the skinny side: 2.5% this year, rising to 2.8% for 2014.

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 considered so you should consider taking independent financial advice.

> G A Chester does not own any shares mentioned in this article.

More on Investing Articles

Modern suburban family houses with car on driveway
Investing Articles

Should I snap up Taylor Wimpey shares at £1.30?

With the Taylor Wimpey share price down by almost 30% this year, should I snap up some shares while it's…

Read more »

Young female analyst working at her desk in the office
Investing Articles

How I’m finding shares to buy now – and keep for a decade

Our writer has been looking for shares to buy using an approach that looks both at long-term profit prospects and…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

What’s happening to the Petrofac (PFC) share price?

The Petrofac (LON:PFC) share price has had a seriously erratic year so far. I take a look at the latest…

Read more »

Young black woman in a wheelchair working online from home
Investing Articles

The Aviva share price is flying! Should I buy this 7% yield?

Despite recent gains, Roland Head thinks the Aviva share price could still be too cheap.

Read more »

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

Here’s 1 passive income opportunity not to be missed!

This Fool details a passive income opportunity that could bolster his holdings, and the shares trading at cheap levels too.

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

The Legal & General share price is dirt-cheap with a juicy dividend yield!

Jabran Khan takes a closer look at the Legal & General share price which looks like an opportunity to boost…

Read more »

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

If I’d invested £1,000 in this top lithium stock 5 years ago, here’s how much I’d have now!

This lithium stock has gone from strength to strength over the past year. But has it flown too high, or…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

A growth stock with a price-to-earnings ratio of just 9.7! Should I buy Yalla?

I'm generally not too keen on investing in dollar-demonated stocks at the moment. But Yalla, with its low price-to-earnings ratio,…

Read more »