3 top dividend-payers of the FTSE 350!

Andrew Woods outlines the biggest dividend-paying firms from the FTSE 350, explaining why he’s attracted to each based on recent financial results.

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While I love finding high-quality growth stocks, I also enjoy searching for income stocks. To that end, I’ve compiled a list of the top three dividend-paying stocks on the FTSE 350. Let’s take a closer look.

Rising interest rates

NatWest (LSE:NWG) shares are currently trading at 258p and they’re up 25% in the last three months.

The banking firm declared a total dividend of 16.8p on 29 July. At the time of writing, this results in a dividend yield of around 6.42%.

The company is currently benefiting from rising interest rates in the UK that are now set at 1.75%. These may only move higher, as the Bank of England seeks to control inflation, which is over 10%.

Rising interest rates generally mean that banks can charge more for loans and mortgages, so that could be good news for NatWest. 

This was visible in its results for the six months to 30 June, when the business reported higher-than-expected pre-tax profits of £2.6bn. The consensus was £2.2bn and the result for the same period in 2021 was £2.3bn.

On the flip side, rising rates may be a deterrent for future customers who don’t wish to take on more debt amid the cost-of-living crisis.

Overall though, NatWest expects full-year revenue to grow 25% compared to last year.

A return to shopping centres

Second, Hammerson (LSE:HMSO) recently declared an interim dividend of 2p per share. At the current share price of 24p, this results in a dividend yield of about 7.62%.

It’s worth noting though, that dividend policies can be subject to change in the future.

The shopping centre and real estate investment firm was battered during the pandemic and the share price slumped to just over 4p.   

For the six months to 30 June however, earnings rose by 154% to £51m. Furthermore, there was a 25% fall in net finance costs, which should place the company on a better financial footing. 

Despite this, there’s always the threat that further pandemic variants have a detrimental impact on Hammerson’s operations. In addition, online shopping may negatively affect the business.

Overall though, the group’s portfolio value increased to £5.3bn, with an annual return of 2.1%. 

Greater hiring

Finally, PageGroup (LSE:PAGE) declared an interim dividend of 31.62p per share, which equates to a dividend yield of 7.01%. At the time of writing, the shares are trading at 446p.

The recruitment consultancy firm has reported solid pre-tax profits for the past five years, while reporting a £114.5m pre-tax profit for the six months to 30 June. This was an 80% increase year on year.

Furthermore, revenue grew to £977m. These financial results give me confidence as a potential investor, but I’m always aware that past growth doesn’t necessarily indicate future growth. 

However, it cautioned about a new trend of slowing recruitment by companies as many have reduced their hiring capacity due to economic conditions. 

Despite this, the business stated that it had benefited from wage inflation, because it had received greater fees per hire on average. 

Overall, these three big dividend companies may provide interesting opportunities for income. As such, I’ll add all three to my portfolio soon.

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.

Andrew Woods has no position in any of the shares mentioned. 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.

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