Today I am looking at four London lovelies poised to deliver brilliant dividends.
British banking star Barclays (LSE: BARC) grabbed the headlines in Tuesday trading following chatter that former JP Morgan banker Jes Staley is poised to fill the vacant CEO position. The American’s background has obviously raised questions over whether Barclays is poised to reignite its Investment Bank, particularly as previous head Antony Jenkins was intent on scaling back the department in favour of doubling-down on its retail footprint.
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The news could of course have huge ramifications for both Barclays’ risk profile and cost base, so more cautious investors should pay close attention to developments in the coming weeks and months. Still, I believe the bank’s strong high-street presence, strong e-banking proposition and lucrative African assets make it a very respectable stock market selection.
With earnings expected to pound higher thanks to these factors, Barclays is anticipated to raise the dividend from 6.5p per share for the past three years to 6.7p in 2015, yielding 2.6%. And this leaps to 3.5% for 2016 amid predictions of a 9p reward.
For those seeking reliable-if-unspectacular share suggestions, I believe power play National Grid (LSE: NG) provides the perfect solution. Earnings are not expected to explode due to the capital-intensive nature of electricity network provision. But the dependable role of electricity in the developed economies of the UK and US is predicted to push the bottom-line steadily higher in the coming years, a promising omen for future dividends.
On top of this, National Grid remains focussed on building its asset base by between 5% and 6% per annum on both sides of the Atlantic, a scenario that should continue to underpin solid investor returns. For the 12 months ending March 2016 National Grid is anticipated to provide a dividend of 43.8p per share, up from 42.87p in 2015 and yielding a stonking 4.8%. And this figure moves to 4.9% for 2017 due to expectations of a 45p payment.
Thanks to its unremitting focus on emerging markets, I reckon Prudential (LSE: PRU) is in great shape to deliver excellent returns for both growth and income chasers. In particular, the company plans to extend its tentacles still further into the explosive markets of Asia, continuing the strategy of former chief executive Tidjane Thiam. And this appears to be a shrewd strategy — pre-tax profits from the continent galloped 20% higher in January-June, to $632m.
But Prudential’s global presence is also giving it access to other white-hot markets, and profits from the US jumped by almost a quarter to $846m in the period. With surging business inflows also flooding the firm with cash, Prudential is predicted to hike last year’s 36.93p per share dividend to 39.8p in 2015, and again to 43.6p next year. Yields of 2.6% and 2.9% may not be spectacular, but I expect bubbly earnings expansion in the years ahead to keep driving dividends skywards.
Big Yellow Group
A steadily-improving domestic economy bodes extremely well for storage specialists Big Yellow Group (LSE: BYG), in my opinion. With citizens’ wallets become increasingly fatter, and homesteads up and down the country become more congested with the latest fashions and furnishings as retail activity takes off, the need for extra space is becoming all the more critical.
Combined with Britons’ growing reluctance to throw away old items, Big Yellow Group is reaping the rewards and is steadily expanding to cater to growing demand — the firm opened its newest outlet in Enfield in April and is busy converting another site in Cambridge. With earnings expected to keep chugging higher, the business is predicted to fork out a payment of 24.8p per share in the year to March 2016, up from 21.7p last year and yielding 3.6%. And this rises to 4% for 2017 due to predictions of a 28p dividend.