Today I am looking at four payout powerhouses set to deliver splendid returns.
Vodafone Group
Telecoms giant Vodafone (LSE: VOD) (NASDAQ: VOD.US) has dominated the headlines again in recent days after talks surrounding an asset-swapping programme with cable giant Liberty Global were announced. Although the denial of a full-fat merger has disappointed investors, I believe that the prospect of the UK company bolstering its already-lucrative presence in the ‘quad-play’ entertainment market bodes extremely well for future earnings and dividend growth.
And in the medium term Vodafone is expected to remain a highly-rewarding payout pick. The London firm is anticipated to raise a payment of 11.22p per share for the year ending March 2015 to around 11.7p in 2016 and 2017. Consequently the business sports a jumbo yield of 4.6% through to the close of next year.
Cobham
I am convinced that aero component builder Cobham (LSE: COB) should continue to shell out meaty dividend hikes as conditions in its key end markets improves. On the military side, I expect improving economic conditions in the West to power orders higher following recent budgetary constraints. And striding passenger numbers, combined with a desire to cut long-term fuel costs, should bolster civil aircraft building activity, too.
This environment is expected to drive dividends skywards in line with earnings, and Cobham is anticipated to shell out a payment of 11.6p per share in 2015, up from 10.65p last year and producing a meaty yield of 3.9%. And this reading hops to 4.2% for 2016 amid City estimates of a 12.3p reward.
Ashmore Group
Despite insipid investor appetite whacking trading performance more recently — assets under management declined more than 4% during January-March, to $61.1bn — I believe that signs of slowing outflows at Ashmore (LSE: ASHM) bodes well for both growth and dividend hunters. Indeed, with signs emerging that cyclical headwinds in developing regions are slowing, I reckon that now could be a good time to get in on the financial services play.
The City believes this improved outlook bodes well for the dividend, as well, and a total payment of 16.45p per share for the year ending June 2014 is expected to advance to 17.1p this year, resulting in a tremendous 5.2% yield. And an expected 17.8p dividend drives the yield to an even-better 5.4%.
Galliford Try
I reckon that the steady improvement in the British economy is a terrific omen for the payout profile at Galliford Try (LSE: GFRD). The Surrey firm announced last month that “the construction market is improving and our construction business is seeing growth in the order book,” while the firm has been “encouraged” by the performance of its housing operations since the start of the year.
With earnings expected to continue rattling along at double-digit pace, Galliford Try is anticipated to hike a dividend of 53p per share for June 2014 to 65.4p in the current 12-month period, producing a tasty yield of 3.9%. And a further sizeable raise in 2016, to 80.7p, supercharges the yield to a brilliant 4.9%.
