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2022 dividend forecasts: GSK, Barclays, Shell

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I’m looking at 2022 dividend forecasts for three of the biggest income stocks in the FTSE 100. You might expect shareholder payouts from Royal Dutch Shell (LSE: RDSB), Barclays (LSE: BARC) and GlaxoSmithKline (LSE: GSK) to be boringly reliable. Sadly, that hasn’t been true in recent years.

Two of them cut their payouts last year. The third is planning a 2022 cut. So which would I buy today?

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Shell looks bulletproof – for now

Shell sent shockwaves around the City last April when CEO Ben van Beurden cut the dividend by 65%. I think it was the right decision. The old payout just wasn’t affordable.

The good news is that Shell’s new dividend looks pretty safe to me. It’s also growing steadily and, after oil prices bounced back this year, van Beurden lifted Shell’s dividend by 38% at the half-year mark.

This was a one-off increase and Shell has told shareholders to expect a 4% increase each year. However, City analysts reckon the firm will do better than this. They’re forecasting a 10% dividend increase for 2022. If they’re right — and I think they could be — that would give Shell a 2022 forecast yield of 4.1% at current levels.

It’s too soon to know whether this fossil fuel producer can reinvent itself as a low-carbon energy business. It’s a tough task. But I’m comfortable with Shell today and would be happy to buy the shares for income in 2022.

GlaxoSmithKline: changes ahead

Pharmaceutical group GlaxoSmithKline hasn’t cut its dividend since 2005. But that’s about to change. When GSK separates its consumer healthcare business into a standalone unit next year, the combined dividend from the two companies is expected to fall by 31%, from 80p to around 55p.

From 2023, there’s no dividend guidance for the consumer business, which will be run separately. But the ‘New GSK’ dividend is expected to be set at 45p. This will mark the start of a new policy targeting a 40-60% payout ratio from earnings each year.

These numbers mean that Glaxo’s dividend yield is expected to fall to 3.5% in 2022 (including consumer healthcare) and 2.9% in 2023 (excluding consumer healthcare).

I’m cautiously optimistic that Glaxo’s performance should continue to improve. But I’m wary about buying the stock ahead of such a big restructuring that could still fail. For now, I’m keeping a watching brief.

Barclays gets new CEO – is the dividend safe?

Barclays’ former CEO Jes Staley exited the company under a cloud this week. New boss CS Venkatakrishnan (known as Venkat) has told staff that the bank’s existing strategy “is the right one”. But I think it’s fair to say that, over time, he’ll make some different decisions to his predecessor.

It’s too soon to know how these might affect Barclays’ dividend payouts and a leadership change is always a risk. But the bank’s recent third-quarter results suggest to me that the payout is likely to continue its recovery from last year’s cut.

Pre-tax profit for the quarter trebled to £6.9bn. Regulatory measures of surplus capital also improved. This suggests to me that the bank should be able to continue growing its dividend.

Broker forecasts suggest Barclays’ dividend will rise to 6p this year, just below the pre-pandemic level of 6.5p. In 2022, the bank’s expected to reward shareholders with a 28% dividend hike, lifting the payout to 7.7p. That’s equivalent to a forecast yield of 3.8%.

I’d consider buying Barclays at current levels.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays and GlaxoSmithKline. 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.

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