The FTSE 100 (FTSEINDICES: ^FTSE) is continuing its slide, falling a further 41 points t0 6,420 by just after midday and hitting a two-month low on the way. Disappointing Chinese economic data is still damaging sentiment, and the US budget deadlock isn’t helping.
One way to avoid the shock of short-term ups and downs is to look for long-term dividend payers — the FTSE 100 is currently on a forecast average yield of 3.2%, which is enough to beat the bank. It’s important to hold your shares immediately before they go ex-dividend in order to qualify for the payout, and here are three top-tier companies reaching that vital date next Wednesday, 9 October:
For insurer Aviva (LSE: AV) (NYSE: AV.US), it’s ex-dividend time for an interim dividend of 5.6p per share announced with first-half results in August.
The amount is little more than half of last year’s interim, but it is in line with the rebasement of the company’s dividend announced at last year’s annual results.
Full-year forecasts suggest a total dividend of 16p, which would provide a yield of 3.9% based on today’s share price of 411p. That’s still a decent yield and, more to the point, it would be covered around 2.7 times by earnings and should be sustainable.
Kingfisher (LSE: KGF), the owner of B&Q, is set to pay an interim dividend of 3.21p per share, after reporting a 10.2% rise in statutory pre-tax profits for the first half — although adjusted pre-tax profits did fall 1.6%, with adjusted earnings per share down 1.7% to 11.3p.
The 3.21p divi represents just a 1% rise over the 3.09p paid a year ago, but it is well-covered by earnings.
Analysts are forecasting a bigger rise in the final dividend to take the total to around 9.9p per share. With the shares at 385p, that would provide a yield of only 2.6%, but with earnings expected to rise more strongly for the year to January 2015 we should start to see better dividend rises.
Our third for next week, advertising and media giant WPP (LSE: WPP), will be delivering 10.56p per share as a result of its first-half performance. That’s the most positive change of the three, by far, up 20% on last year.
A similar boost to the final payment would result in a total of 34p per share for a yield of 2.7%. At 1,252p, the shares are up around 47% over the past 12 months.
At the halfway stage, headline pre-tax profits were up 12% to £514m, breaking the half-billion-pound mark for the first time in the company’s history. WPP is targeting a dividend payout ratio of 45% within two years, with the latest payment reaching 37%.
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> Alan does not own any shares mentioned in this article.