Today I am looking at a handful of stocks I believe will provide exceptional income flows in the both in the short-term and stretching well into the future.
Buoyed by its diversification across many product segments, life insurance giant Standard Life (LSE: SL) continues to generate tremendous revenues growth. And with galloping business inflows helping the firm’s cash pile burst through the roof — underlying cash generation leapt 21% last year, to £408m — the City expects dividends to continue climbing.
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Indeed, Standard Life is anticipated to lift the total payout from 7.03p per share last year to 21p in 2015, a meaty 23% rise. And a further 7% increase, to 22.4p, is anticipated for next year. Consequently the business carries market-mashing yields of 4.4% and 4.7% for 2015 and 2016 correspondingly.
Marks and Spencer Group
With the company’s Womenswear division finally showing signs of a turnaround, the gremlins affecting its website now behind it, and affluent grocery shoppers flocking to its Food outlets in their droves, I reckon that Marks and Spencer (LSE: MKS) is in great shape to deliver splendid dividend growth in coming years. On top of this, the retailer is also bulking up its operations in lucrative emerging markets, another positive omen for shareholder returns.
Marks and Spencer is expected to get its progressive dividend policy back on track from the year concluding March 2015, the company having kept the full-year payment locked at 17p per share for many years now. Indeed, a 5% hike, to 17.8p, is currently chalked in for the year just passed, and which is anticipated to rise an extra 5% and 9% for 2016 and 2017 correspondingly, to 18.7p and 20.4p. Dividends for this year and next create decent yields of 3.2% and 3.5%.
I believe that Royal Mail (LSE: RMG) is in great shape to enjoy the fruits of rising e-commerce both at home and abroad. Indeed, the Society of Motor Manufacturers and Traders said this week that surging parcel traffic drove commercial vehicle sales to a record high of 108,456 units in January-March, up more than 22% from the same period in 2014. Combined with the rewards of extensive restructuring, I reckon the courier should provide wholesome payout expansion.
This view is shared by the number crunchers, who anticipate a 52% hike in the full-year payout for the year concluding March 2015, to 20.3p per share from 13.3p in 2014. And additional advances of 3% and 2% are predicted for 2016 and 2017 respectively, to 20.9p and 21.3p, creating bumper yields of 4.6% and 4.7%.
Construction play Carillion (LSE: CLLN) has a terrific record of lifting the dividend even in times of severe earnings volatility. And although the UK construction sector remains under pressure, in my opinion the firm’s ability to keep on stacking up marquee building contracts — Carillion announced it had inked road and housebuilding contracts worth £123m just this month — should keep earnings and payouts heading higher.
Carillion is expected to lift a payout of 17.75p per share last year to 18.2p in 2015, a 3% uptick and which creates a mighty yield of 5.5%. And the good news does not cease there, with an extra 3% advance pencilled in by the City’s boffins, to 18.7p. This projection drives the yield to a mouth-watering 5.6%.
In my opinion Old Mutual (LSE: OML) should keep shelling out market-busting dividends, underpinned by solid demand for insurance products across its critical African markets. Indeed, a extensive revamping of its distribution network is expected to make the most of low product penetration rates in these emerging regions and light a fire under earnings growth from this year onwards.
As a result Old Mutual is expected to hike last year’s dividend of 8.7p per share by 13% in 2015, to 9.8p. And an additional 10% rise, to 10.8 p, is predicted by the number crunchers for next year. Accordingly the insurance play’s yield leaps from an impressive 4.1% for this year to 4.6% for 2016.