Do Bumper Dividends Make Taylor Wimpey plc, Direct Line Insurance Group PLC & Paddy Power Plc A Buy?

Cash is flowing back to shareholders at Taylor Wimpey plc (LON:TW), Direct Line Insurance Group PLC (LON:DLG) and Paddy Power Plc (LON:PAP).

| 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.

Company results are coming thick and fast at the moment, and it’s not all good news.

However, three firms that are doing well are Taylor Wimpey (LSE: TW) Direct Line Insurance Group (LSE: DLG) and Paddy Power (LSE: PAP), all of which announced big dividend increases on Tuesday morning.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Taylor Wimpey

It’s no secret that housebuilders are doing well at the moment. The latest to report is Taylor Wimpey, where operating profits rose by 54% to £480m in 2014.

Shareholders will enjoy an increased share of this strong performance, as the firm has increased its ordinary dividend for 2014 to 1.56p, a 126% increase on 2013’s payout of 0.69p.

In addition, Taylor Wimpey paid a special dividend of 1.54p in 2014, taking the total payout for 2014 to 3.1p.

If you’re not a shareholder already, it may not be too late to get on board — the latest City forecasts suggest that Taylor Wimpey’s total dividend payout could rise by almost 200%, to 9p, in 2015, giving a juicy prospective yield of 6.1%!

Paddy Power

Irish bookmaker Paddy Power appears to be on a strong run. Earnings per share rose by 18% in 2014, while pre-tax profits rose by 21% to a record €167m.

The firm’s net cash balance rose from €229m to €285m in 2014, and Paddy Power has now decided to return some of this surplus cash to shareholders.

In addition to a 13% increase in the firm’s regular dividend, which will rise to €1.52 per share, Paddy Power is proposing a cash return of €8 per share for shareholders, funded by a mixture of net cash and new debt.

Although I’d prefer to see Paddy Power using net cash only to fund shareholder returns, investors welcomed this news, sending shares in the bookmaker up by almost 10%.

Direct Line

Like several of its motor insurance peers, Direct Line has got into the habit of paying a special dividend each year.

On Tuesday, the firm announced that it would pay a final dividend of 8.8p and a second special dividend of 4p per share in respect of 2014, taking the total payout for 2014 to 27.2p, 32% more than in 2013.

Direct Line’s generous payouts give the firm’s shares a trailing yield of more than 8%, making them a potentially attractive buy — if you believe the firm can maintain this level of payout in 2015.

Is this little-known company the next ‘Monster’ IPO?

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.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Roland Head has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Should I buy this FTSE 250 defensive stock?

Jabran Khan is looking for defensive stock options for his holdings and delves deeper into this FTSE 250 food manufacturing…

Read more »

pink toy piggy money box on yellow background
Investing Articles

5 ‘no-brainer’ FTSE 250 shares to buy today

I'm seeing a lot of attractive dividend shares in the FTSE 250 right now. This approach gives me some very…

Read more »

Windmills for electric power production.
Investing Articles

The SSE share price slumps by 11%! Should I buy today?

The SSE share price tumbled today after talks of a windfall tax on electricity generators. Our writer considers if it’s…

Read more »

British Pennies on a Pound Note
Investing Articles

3 penny shares I own instead of Woodbois

Our writer prefers these three penny shares over hot stock Woodbois -- which is why he has bought them.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Investing Articles

This FTSE 100 stock has tumbled in price. Here’s why I’d buy it now!

This FTSE 100 stock has tumbled to nearly half of its value since the start of 2022. This presents a…

Read more »

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

My top 5 big dividend stocks to buy before June!

With soaring inflation, I'm looking at dividend stocks to increase my returns in the near term and keep my portfolio…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

How I’d invest a £20,000 Stocks and Shares ISA to survive any market environment

Financial markets have fallen substantially so far in 2022, so I’m creating a portfolio for my Stocks and Shares ISA…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

Three FTSE 100 shares I’d buy to sleep soundly

Our writer reckons this trio of FTSE 100 blue-chip shares could make attractive long-term holdings in his portfolio.

Read more »