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.
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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%!
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%.
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.