The FTSE 100 (FTSEINDICES: ^FTSE) has started off weakly, dropping 30 points to 6,667 by late morning, after upbeat US economic expectations one again raise the spectre of economic stimulus measures being cut back. It continues to surprise me that the event, whenever it comes, is not already built into share prices — it’s inevitable that it will happen sooner or later.
Long-term shareholders won’t really care, and will be basing their strategy partly on income and looking for dividends that beat the FTSE’s 3.1% average. Here are three that raised their dividends this week:
Associated British Foods
Associated British Foods (LSE: ABF) told us of “another record year” on Tuesday, and announced a final dividend of 22.65p to take its total for the year up 12% to 32p per share. With the shares having soared more than 60% over the past 12 months to 2,251p, that’s a modest yield of just 1.4%.
Primark was the big winner with sales up 22% and profit up 44%, helping take total group revenue up 9% to £13.3bn and adjusted pre-tax profit up 13% to £1,096m. Adjusted earnings per share (EPS) also rose 13%, to 98.9p, so the dividend was well covered.
Imperial Tobacco Group
Imperial Tobacco Group (LSE: IMT) (NASDAQOTH: ITYBY.US) offers an altogether better dividend yield of 5% on its share price of 2,351p, after upping its full-year payment 10% to 116.4p with a final contribution of 81.2p. The firm says it expects to lift its dividends by at least 10% per year over the medium term, and ahead of earnings.
This year’s payment was made possible by a modest 1% rise in adjusted operating profit to £3,180m, with adjusted EPS up 5% to 210.7p.
The company described conditions as tough, but saw progress in its Growth brands and in less-developed markets.
Tate & Lyle
Tate & Lyle (LSE: TATE) is our third for today, this time with a 5.4% hike to its first-half dividend to 7.8p per share.
For the six months to 30 September, the company saw sales rise 7% to £1,737m, but adjusted pre-tax profit fell 3% to £173m with adjusted EPS down 2% to 29.9p.
With the shares trading at 790p, a similar boost to the final dividend would give shareholders a full-year yield of 3.5%, a little ahead of that FTSE average.
