As a provider of pharmaceutical products, GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) has a high degree of visibility of its future sales and profits. This results in the company being one of the most reliable dividend payers in the FTSE 100.
The Glaxo dividend has been increasing year-on-year for more than ten years. In the last five years, it has been increased at an average rate of 6.9% a year.
Two years of earnings and dividends growth are forecast at Glaxo. Analysts estimate that the company will report a 17.8% increase in earnings per share (EPS) this year, followed by a 10.4% rise in 2014. The dividend is expected to be hiked by 5.1% this year and 5.7% the next.
At today’s share price, that puts Glaxo on a 2014 P/E of 13.6, with an expected yield of 4.7%.
As Tesco‘s growth has stalled and Morrisons looks at risk of going into reverse, J Sainsbury (LSE: SBRY) continues to power ahead. In its most recent trading statement, the company confirmed its 34th successive quarter of sales growth.
Over the next two years, profit growth is expected to outstrip dividend growth, helping secure the Sainsbury’s payout.
Analysts have pencilled in 5.4% of earnings growth this year, and 7.5% growth to follow. The dividend is forecast to rise 3.7% this year and 4.0% the next. If these projections come good, then Sainsbury’s is trading on a 2015 P/E of 11.1, with an anticipated yield of 4.8%.
Although there are bigger yields available, there are few better than Sainsbury’s.
Centrica (LSE: CNA) is the company behind the British Gas utility brand . Utilities are frequently considered reliable, big dividend payers. Centrica is no exception.
In the last five years, the company has delivered successive annual dividend increases. Dividend growth has outstripped inflation in that time — increases have averaged 7.2% per annum.
Centrica shares today trade on 13.5 times earnings forecasts for 2013. The average FTSE 100 stock trades at 14.1 times.
Centrica’s shares are forecast to yield 4.6% for the year. The average FTSE stock is expected to pay just 3.0%. Dividend cover is around 1.6 times, suggesting that future payouts and increases can be expected.
Our team of analysts here at The Motley Fool believe that they have found an even better income share than any of these three. Their in-depth analysts of this blue-chip dividend opportunity can be found in the Motley Fool report “Power Up Your Portfolio”. This research is 100% free and will be delivered to your inbox immediately. Just click here to start reading today.
> David does not own shares in any of the above companies mentioned above. The Motley Fool owns shares in Tesco.
*the fourth company to qualify is BAE Systems.
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