The FTSE 100 (FTSEINDICES: ^FTSE) is slipping back a bit today, as the end of the week brings us closer to next week’s Federal Reserve update and people are apparently starting to worry about economic stimulus tapering again — though why the existence of the Fed is any more apparent today than it was yesterday beats me. Still, at 6,570 points by mid-morning, the FTSE is still up on the week, if only by 23 points.
In uncertain times, many investors rely on dividends, and the FTSE’s forward yield is around 3.2%. But which companies are raising their payouts? Here are three from the top tier doing that this week:
On Thursday, fashion chain NEXT (LSE: NXT) reported a 13.8% rise in first-half pre-tax profit, after sales rose by 2.2%. Earnings per share (EPS) gained 19.9% to 142p, and the interim dividend was lifted 16.1% to 36p per share. The results gave the shares a boost, and they’re now up 55% over the past 12 months. With the price at 5,220p, a 16% rise in the full-year dividend would see a yield of 2.3%.
NEXT says indications suggest the credit squeeze is coming to an end and consumers’ free cash is rising again, but cautions that sentiment is still week. But for the full year, the firm is still forecasting a pre-tax profit rise range of 7-14%, with underlying EPS expected to grow by 12-19%.
Kingfisher (LSE: KGF), the owner of B&Q and Screwfix, was able to lift its first-half dividend on Wednesday, albeit by only 1% to 3.12p per share. That was probably more than many would expect after adjusted pre-tax profit dropped 1.6%, due in part to the very cold first-quarter weather keeping people away from gardening and DIY.
Q2 was better, and the sunnier days helped boost overall sales for the half by 4.3%, but we were still warned that “underlying consumer confidence remains weak“.
Shareholders haven’t done badly this year. Despite a fall on the news, the shares are up around 50% over the past 12 months, to 405p.
Wm. Morrison Supermarkets
First-half results from Wm. Morrison Supermarkets (LSE: MRW) (NASDAQOTH: MRWSY.US) showed a 21% fall in reported pre-tax profit to £344m, with underlying profit down 10% and underlying EPS down 2%. But the shares responded with a rise as investors were cheered by a couple of things, and at 298p they’re in positive territory over the past year.
Firstly, Morrisons is finally moving into 21st-century shopping, with its partnership with Ocado progressing well and first orders expected to be out the warehouse door by the end of January 2014.
And the firm lifted its interim dividend by 10% to 3.84p per share, and launched a new dividend policy aimed at maintaining cover of around twice underlying earnings.
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