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3 FTSE Shares Going Ex-Dividend: SSE PLC, Compass Group plc and Pennon Group plc

The FTSE 100 (FTSEINDICES: ^FTSE) made a tentative to 2014, going nowhere for the first couple of weeks of the year. But so far this week the index of top UK shares is up 76 points to 6,816. But in addition to share price gains, dividends form a significant part of FTSE 100 returns — last year the index provided an average yield of 3.0%, and there’s a further 3.1% forecast for the next 12 months.

If you do go for dividends, be sure to hold on to your shares until they pass their ex-dividend date or you won’t be eligible for the cash. The number of firms going ex-dividend is low at the moment, but here are three reaching their crucial dates over the next couple of weeks:

SSE

It will be interim ex-dividend time for SSE (LSE: SSE) on Wednesday 22 January, with a first-half payment of 26p per share up for grabs — up 3.2% from the same period a year previously.

Adjusted pre-tax profit did fall, however, by 11.7% to £354m, with adjusted earnings per share (EPS) down 17.4% to 29.4p.

Forecasts for the full year indicate a dividend rise of 3.6% to yield a massive 6.4% on today’s 1,312p share price, and that seems more likely now that the firm has said it is on course for a full-year dividend rise that should beat RPI inflation. SSE also expects to continue to lift its annual payment by more than RPI inflation in subsequent years.

Compass Group

There’s a final dividend to come from Compass Group (LSE: CPG) on the same day, 22 January, of 16p per share, taking the total payout for the year up 12.7% to 24p per share.

The lift was made possible by a 12.5% rise in underlying earnings per share to 47.7p, from a 9.2% gain in underlying pre-tax profit to £1,188m. Forecasts for the next two years suggest dividend rises of 5% and 8% respectively.

This year’s payment provides a yield of a fairly modest 2.5% on the current share price of 966p, but the shares have gained around 28% over the past 12 months.

Pennon Group

Water utility Pennon Group (LSE: PNN) is our third, with an increase in its interim dividend of 7.2% to 9.39p per share — ex-dividend date is a week later, on Wednesday 29 January.

For the half-year to 30 September, Pennon saw a 3.5% rise in pre-tax profit to £110.9m, with adjusted EPS up 2.6% to 23.8p.

Pennon plans to boost its dividend by 4% per year above inflation up to the end of the 2014/15 year. With the shares trading at 678p, a similar rise at year-end this year would provide 30.5p per share for a yield of 4.5%.

Finally, dividends like these can provide a strong footing to any long-term portfolio. If you want to learn how to identify great long-term dividends yourself, have a look at the new Motley Fool report "How To Create Dividends For Life", which gives you 5 Golden Rules for Building a Dividend Portfolio.

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> Alan does not own shares in any company mentioned.