These FTSE 100 dividend stocks just gave investors a pay rise

Love dividends? Check out these three FTSE 100 (INDEXFTSE: UKX) companies which all recently hiked their dividend payouts.

| 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.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

People who know me know that I love a dividend. I’m always talking about the benefits of dividends and explaining how they can potentially make you wealthy over the long term. Yet when it comes to dividend investing, there’s one thing I look for in particular and that’s dividend growth. While these payouts can make you wealthy, growing dividends can really turbo-charge your wealth.

Today, I’m looking at three FTSE 100 companies that have all announced increases recently. Could these stocks help you achieve your financial goals?

Reckitt Benckiser

You may not be familiar with the name Reckitt Benckiser (LSE: RB) but there’s every chance you’ll know its products – the £49bn consumer goods giant owns a powerful stable of health and hygiene brands, including trusted names such as Nurofen, Dettol and Durex.

While RB’s dividend yield is not the highest in the FTSE 100, at 2.4%, it’s worth noting that the company has an excellent track record of increasing its payout. Over the last decade, the cash distribution to shareholders has been increased from 55p per share to 164.3p, which equates to an annualised growth rate of 11.6%.

There was more good news for dividend investors recently, with the group announcing a FY2018 interim dividend of 70.5p per share, a 6% increase on last year’s interim payout. Investors have had their doubts about the company’s strategy in the recent past, but a 6% dividend hike suggests that management is confident about the outlook.

Aviva

Insurance specialist Aviva (LSE: AV) doesn’t have the same enviable dividend growth track record as Reckitt Benckiser and has had its problems in the past. As a result, its dividend history has been a little up and down. Yet in recent years, it looks to have transformed itself into a leaner, stronger organisation, and the company has put together a nice string of dividend increases. Over the last three years, the payout has risen from 18.1p to 27.4p per share, an increase of more than 50%.

Aviva reported half-year results last week and there was good news for those who hold the stock for its dividend. The group increased its interim payout by a healthy 10% which marked four consecutive double-digit increases in the half-year payout. Clearly, the company is doing something right. With City analysts expecting a full-year figure of 30.1p per share, Aviva’s prospective yield is currently a high 6%, offering appeal to those looking for high income.

St. James’s Place

Saving the best until last, take a look at the dividend history of wealth manager St. James’s Place (LSE: STJ). Not only does the group have an outstanding dividend growth history, having recorded 14 consecutive increases, but the dividend is growing at a powerful rate.

STJ released half-year results last week and the numbers were excellent, with gross inflows rising 15% and group funds under management increasing 16% on the same period last year. However, what was most impressive, in my view, was the massive 20% increase in the interim dividend – a fantastic result for dividend investors.

For the full year, analysts currently expect STJ to pay out a dividend of 49.2p per share, which at the current share price, equates to a prospective yield of a healthy 4.2%. With that level of yield on offer and the payout growing quickly, I believe the stock is worth a closer look from a dividend-investing perspective.

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.

Edward Sheldon owns shares in Aviva and St James's Place. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing For Beginners

Here’s how I’m trying to prevent a stock market crash from ruining my portfolio

Jon Smith explains which shares he's avoiding and what he's thinking of buying to try and protect his portfolio from…

Read more »

Bearded man writing on notepad in front of computer
US Stock

Call me crazy, but here’s why I’m eyeing up the CrowdStrike share price

Jon Smith notes the carnage caused by Friday's global outage, but flags up why he's thinks the CrowdStrike share price…

Read more »

Investing Articles

What do Hargreaves Lansdown results mean for the share price?

The Hargreaves Lansdown share price has surged in recent months on takeover expectations, but what will the recent results mean…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Newly minted S&P 500 stock CrowdStrike just crashed! Here’s why

Shares of S&P 500 firm CrowdStrike collapse as the company lies at the centre of a global IT outage. What…

Read more »

artificial intelligence investing algorithms
Investing Articles

Is Nvidia heading for the mother of all tech stock crashes?

Nvidia stock has soared, and the company briefly became the most valuable on the planet. But not everyone’s an AI…

Read more »

Dividend Shares

The BP share price is down 15% in 3 months. Time to buy?

In the space of just a few months, the BP share price has fallen by a double-digit percentage. Is this…

Read more »

Investing Articles

A 5.4% dividend bargain I’ll buy over Lloyds shares

Harvey Jones loves his Lloyds shares but now he's found a high-yielding FTSE 250 stock that may offer even more…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Recommended by Warren Buffett, this top hedge fund’s betting on Rolls-Royce shares

When Warren Buffett ended his previous investment partnership, he recommended Bill Ruane’s Sequoia Fund. Today, its largest investment is in…

Read more »