What This Top Dividend Portfolio Is Holding Now: Vodafone Group plc, Unilever plc And Schroders plc

Murray Income Trust (LON:MUT) counts Vodafone Group plc (LON:VOD), Unilever plc (LON:ULVR) and Schroders plc (LON:SDR) among its dividend darlings.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Murray Income Trust (LSE: MUT) delivered its forty-first consecutive annual dividend increase last year. And picking great dividend shares, such as the ones I look at below, has helped the trust outperform the FTSE All-Share Index over the past three, five and ten years.

Market conditions may be volatile at present, but Murray remains “confident that the best way to generate attractive long term returns is to invest in globally competitive businesses with robust balance sheets and experienced management teams”.

Vodafone

Vodafone has an experienced management team led by chief executive Vittorio Colao, who was appointed in 2008, having previously held a number of senior country and regional positions within the group.

Vodafone had net debt of £29bn at the last tally. A big number in absolute terms, but the market capitalisation is £62bn, and the balance sheet is strong relative to sector peers. Furthermore, Vodafone has just completed a massive three-year investment programme, so cash flow should improve significantly going forward.

The chief executive said last month: “We continue to face regulatory and competitive challenges in many markets, but we are confident that the business is well positioned for the growth opportunities ahead”.

Vodafone is one of the higher-yielding blue chips held by Murray Income Trust. The mobile giant is forecast to deliver an 11.48p dividend for its financial year ending 31 March, giving a yield of 5.3% at a share price of 216p. Analysts see the dividend ticking up at least in line with inflation for the next couple of years.

Unilever

Unilever is Murray’s biggest holding. And you’d be hard-pressed to find a better example of the kind of globally competitive business with robust balance sheet and experienced management team that the trust seeks to invest in.

Chief executive Paul Polman is a veteran of the consumer goods industry, having started at Proctor & Gamble in 1979 and done a stint at Nestlé, before joining Unilever in 2008. Unilever has modest net debt of £8.5bn, and the company’s global reach and competitiveness are amply demonstrated by sales growth ahead of its markets and a rising operating margin.

Unilever’s shares are trading at 3,070p, and with an 88.49p dividend paid for 2015, the trailing yield is a relatively modest 2.9%. However, the trade-off is reliability, with annual mid to high single-digit dividend increases forecast to continue.

Schroders

Murray Income Trust has been adding to its holding in asset manager Schroders this year. Schroders was established in 1804, and continues to be controlled by descendents of the founders. You don’t survive for over 200 years without being adept at management succession-planning and having a wealth of experience to draw on — currently embodied by 83-year-old Bruno Schroder, a non-executive director and member of the nominations committee.

With a strong balance sheet and prudent management, Schroders weathered the 2008/9 financial crisis with little problem. The dividend has increased from 37p in 2010 to 87p last year. At a share price of 2,700p the trailing yield is 3.2%, although if you buy the non-voting share class (ticker SDRC) at 2,056p, you get a yield of 4.2%.

Dividend growth is forecast to moderate after the tremendous increases of recent years, but Schroders remains an appealing stock in the financial sector, which is not exactly renowned as a bastion of long-term, prudent management.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Is Rolls-Royce’s share price an irresistible bargain?

Is Rolls-Royce's share price the FTSE 100's greatest bargain today? Royston Wild explains why he would -- and wouldn't --…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

Is the Vodafone share price a wonderful bargain or a horrible value trap?

As the Vodafone share price continues to fall, is it now a stock to buy with a view to a…

Read more »

Hand of a mature man opening a safety deposit box.
Investing Articles

I’d buy 95,239 shares of this banking stock to generate £200 of monthly passive income

Muhammad Cheema takes a look at how Lloyds shares, with a dividend yield of 5.9%, can generate a healthy monthly…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

Can FY results give the Antofagasta share price a long-term boost?

The Antofagasta share price has had a good five years. Now the company says it's set to enter a new…

Read more »

Person holding magnifying glass over important document, reading the small print
Dividend Shares

Can I make sustainable passive income from share buybacks?

Jon Smith notes the rise in share buybacks from FTSE 100 companies, but flags up why they aren't great for…

Read more »

Front view of a mixed-race couple walking past a shop window and looking in.
Investing Articles

After the Currys share price rockets, here are more potential UK takeover targets!

The Currys share price has surged 39% higher in response to news of a takeover bid. Which UK stocks could…

Read more »

Investing Articles

Down 25%, where will the British American Tobacco share price go next?

The British American Tobacco share price has taken a hit. But this Fool isn't deterred. He think's now could be…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

2 cheap dividend stocks I’d snap up in a heartbeat!

This Fool is on the look out for quality dividend stocks and earmarks these two firms as great options to…

Read more »