Today I am looking at five London leviathans with terrific dividend prospects.
Telecoms giant BT (LSE: BT-A) has long been an impressive cash generator, as evidenced by its financial release which showed free cash flow leap16% last year to a colossal £2.8bn. With the business shelling out huge sums to service its huge organic investment across its broadband and television services — not to mention the £12.5bn takeover of EE — such a quality is essential to soothe any nerves over the size of future payouts.
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And I reckon that the surging popularity of BT’s ‘quad-play’ proposition should continue as this investment pays off, underpinning both earnings and dividend growth. Indeed, the company is anticipated to hike a payout of 12.4p per share for the year ending March 2015 to 14.5p this year, driving the yield to 3.1%. And this reading leaps to 3.5% next year amidst expectations of a dividend of 16.1p.
With Britain’s cycling obsession continuing to click through the gears, I reckon that the dividend outlook at Halfords (LSE: HFD) is nothing short of exceptional. The business opened another Cycle Republic store earlier this month, this time in Nottingham, and also launched its Boardman clothing line to compliment its related cycle range. And Halfords is also well positioned to enjoy strong car-related revenue growth, with both accessories sales and service activity at its Autocentres ticking over nicely.
As a result the number crunchers expect the company to lift a predicted dividend of 15.5p per share for the year concluding March 2015 to 17.1p in the current year, and again to 18.6p in 2017. Such projections create appetising yields of 3.6% and 3.9% correspondingly.
Aberdeen Asset Management
I believe that Aberdeen Asset Management (LSE: ADN) should keep on offering market-bashing dividend yields as client activity gradually improves. Indeed, the financial services play announced this month that “new business inflows have continued to grow,” and although outflows remain heady I expect these to peter out as market sentiment picks up. On top of this, the company’s rising emphasis on global growth regions also bodes well for earnings and consequently payout growth.
Against this backcloth the City expects the company to raise a payout of 18p per share in the year concluding September 2014 to 19.7p this year, producing a chunky yield of 4.5%. And this leaps to 5% for next year as current forecasts suggest a further sizeable hike, to 21.8p.
With car premiums appearing be on the cusp of finally turning the corner, I reckon the dividend picture at Esure (LSE: ESUR) should continue to improve. The insurer announced this month that gross written premiums rose 7.2% in January-March, to £110.1m, the best result for four years. And Esure’s plans to expand its footprint in more market sectors should put a fire under the top line in the coming years, in my opinion.
Consequently Esure is in great shape to keep on offering up lip-smacking dividend yields. Indeed, a projected full-year payout of 15.7p per share for 2015 — up from 15.3p last year — results in a monster yield of 6.4%. And predictions of a 16.3p-per-share for 2016 reward drives this figure still higher, to 6.7%.
Backed by a steady flow of annual earnings explosions, Galliford Try (LSE: GFRD) has long been sought after by investors looking for brilliant year-on-year dividend growth. And with the UK economy continuing to improve, and the housebuilding sector in particular hitting the high notes — Galliford Try actually purchased Shepherd Homes just last week — I believe that the business should remain a popular income pick.
This view is shared by the City, and the calculator bashers expects the construction play to institute another eye-watering hike in the year concluding June 2015, with a predicted payout of 64p per share rising from 53p in 2015 and yielding an impressive 4.2%. And this figure leaps to 5.1% for next year amid estimates of a 78p reward.