What This Top Dividend Portfolio Is Holding Now: HSBC Holdings plc, Royal Dutch Shell Plc and Vodafone Group plc

JP Morgan Claverhouse IT (LSE: JCH) has a record of 40 successive years of dividend growth. The trust lifted its dividend by 3.3% for 2012, and a similar rise this year would give a yield of 3.4% at a current share price of 581p.

Picking great dividend shares has helped JP Morgan Claverhouse outperform the FTSE All-Share Index over the past three, five and 10 years.

Let’s take a look at the trust’s current top three holdings: HSBC (LSE: HSBA) (NYSE: HBC.US), Royal Dutch Shell (LSE: RDSB) and Vodafone (LSE: VOD).


HSBC’s market capitalisation is bigger than Lloyds, Barclays and Royal Bank of Scotland combined. Unmatched geographical reach also sets HSBC apart from the FTSE 100 banking crowd.

HSBC’s progress since the 2008/9 financial crisis has recently led top City fund manager and notorious banks bear Neil Woodford to described the company as ‘investable’. HSBC reported continued falling costs and impairments for the third quarter of this year, producing another big uplift in underlying profit — and a third 11% increase for the quarterly dividend.

At a current share price of 687p, analyst forecasts imply an income of 4.7% for the current year, rising to 5.2% for 2014.

Royal Dutch Shell

Like HSBC, Royal Dutch Shell dominates its FTSE 100 sector peers. Shell’s market capitalisation is not much less than BP and BG Group combined.

In contrast to HSBC, though, Shell’s recent third-quarter update was less than inspiring. Shell reported increased upstream operating costs, weak refining conditions and a challenging environment for the company’s substantial business in Nigeria. Earnings fell more heavily during the third quarter than the already significant decline seen in the first half of the year. Nevertheless the board lifted the Q3 dividend by 5%.

The reward for investors who accept the current earnings lull, while waiting for new projects to come on stream, is a forecast 5.3% income based on the current share price of 2,185p


Vodafone’s shares have been on a tear since the late-summer news that the company has agreed to sell its 45% stake in US phones firm Verizon Wireless to Verizon Communications for $130bn (£84bn). Further rocket fuel has been added to the shares by recent rumours that another US phones giant, AT&T, is considering a takeover of Vodafone itself, probably after the Verizon deal completes early next year.

In first-half results released last week, Vodafone lifted the interim dividend by 8% and also confirmed it expects to lift the final dividend by the same amount (adjusted for a share consolidation connected with the Verizon disposal).

The big rise in Vodafone’s shares to a current 231p has pushed the forecast dividend yield down below 5%, but that’s still comfortably ahead of the FTSE 100 average.

Happy retirement!

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> G A Chester does not own any shares mentioned in this article. The Motley Fool has recommended Vodafone.