If you want to be eligible for a dividend payment, or if you’re watching for possible share price falls, keeping up with ex-dividend dates can prove beneficial — as long as you hold the shares up to and including that day, you’ll get your money.
We have a handful of companies from the FTSE 100 and FTSE 250 reaching their crucial dates next week. Here are three that will go ex-dividend next Wednesday, 17 July:
The only FTSE 100 company going ex-dividend next week is Imperial Tobacco Group (LSE: IMT), which will pay an interim dividend of 35.2p per share. For the six months ended 31 March, revenue fell 3.1% with adjusted earnings per share dropping by a similar 3.1% to 90.2p. But the firm still felt sufficiently confident to lift that interim dividend by 11%, restating its plan to grow dividends “by at least 10 per cent per year over the medium term”.
A 10% rise in the total dividend for the year would result in a payment of around 116p, for a yield of 5.1% on today’s share price of 2,279p, which sounds pretty good — but earnings for the second half have a bit to go to achieve the current consensus of a 4% rise.
In April, WH Smith (LSE: SMWH) announced an interim dividend of 9.4p per share, up 13% from the previous year, after earnings per share grew by 11% to 44.2p. The firm’s share buyback programme is going according to plan, with 4.2 million shares having been repurchased as of 10 April, and £28m returned to shareholders. The share price has done well too, gaining nearly 40% over the past 12 months, to 742p today.
If the full year dividend is raised by the same 13%, we should see a total payment of about 30.4p per share for a yield of 4.1%. And with the shares on a forward P/E of 10.6, falling to under 10 for 2014, we might be looking at a bargain.
For the year to 30 March, the figures were up across the board — revenue up 7%, adjusted pre-tax profit up 8%, and adjusted earnings per share up 7%. All that meant that this year’s dividend rise of 7% was really not stretching, covered 2.5 times as it was.
Forecasts value the shares quite highly, with a P/E of about 18.5 based on today’s price of 530p and a dividend yield of only around 2%, but Halma is clearly a long-term quality company and the market is valuing it accordingly.
Finally, dividends like these can add nicely to your investment returns — they can be spent or reinvested according to your needs. Whether investing for income or growth, good old cash is always welcome.
And that’s why I recommend the BRAND-NEW Fool report, “The Motley Fool’s Top Income Share For 2013“, in which our top analysts identify a share that they believe will provide handsome dividend income for years to come.
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> Alan does not own any shares mentioned in this article.
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