3 Dividend Darlings Set To Ignite: Barclays PLC, Legal & General Group Plc And Amlin plc

Today I am looking at three big-cap beauties carrying terrific dividend prospects.


With Barclays (LSE: BARC) (NYSE: BCS.US) announcing more positive quarterly results late last month — adjusted pre-tax profit surged 9% during January-March, to £1.8bn — suggestions that the firm has finally waved goodbye to the travails of previous years has gained yet more traction.

City analysts currently expect the bank to punch substantial earnings growth of 36% and 21% in 2015 and 2016 respectively, and dividends are subsequently expected to get rolling again after being locked at 6.5p per share for the past three years. Rewards of 8.1p for 2015 and 10.7p for next year are currently predicted.

This stonking growth is expected to shove the yield from a respectable 3.1% this year to 4.1% for 2016, and I expect similarly-high yield expansion in the coming years as the UK economic recovery powers retail revenues. On top of this, Barclays’ Transform plan is providing a double-whammy in the form of improving Barclays’ footprint in the white-hot digital banking arena, as well as boosting the cash pile by stripping out costs.

While it is true that various ongoing legal problems, from the mis-selling of PPI through to investigations over currency manipulation in the US, should continue to dent the balance sheet, I reckon that Barclays’ strong capital base — the firm’s CET1 ratio rose to a healthy 10.6% in the first quarter, up from 10.3% at the close of 2014 — should undergird robust dividend growth.

Legal & General Group

I am convinced that swelling client activity at Legal & General (LSE: LGEN) bodes extremely well for dividend chasers. The company has proved highly successful in evolving its product ranges in line with changing regulatory demands and demographic trends, while expansion into lucrative territories such as the US and Asia is also paying off handsomely. Indeed, Legal & General reported last week that total assets jumped 17% during the first quarter, to £736.8bn.

Not surprisingly the abacus crunchers expect Legal & General to keep on churning out exceptional earnings growth, and expansion in the region of 12% and 9% is estimated for 2015 and 2016 respectively. Not surprisingly these figures should give the insurer’s bubbly dividend policy a strong shot in the arm, and the business is predicted to lift last year’s 11.25p per share payout to 13.2p this year and to 14.6p in 2016.

As a consequence an excellent yield of 4.9% for this year jumps to an even-more impressive 5.4% for 2016. With Legal & General also continuing to generate shedloads of readies — net cash generation climbed an extra 8% in the first quarter, to £326m — I reckon the insurance leviathan is set to deliver market-bursting dividends for some time to come.


Like its insurance sector peer, I believe Amlin (LSE: AML) is also poised to keep its ultra-generous dividend policy on track in the coming years. Even though rising competitive pressures pushed pre-tax profit 21% lower last year, to £258.7m, the firm’s bullish long-term outlook encouraged the business to not only hike the ordinary dividend 4% to 27p per share, but also to declare a special dividend of 15p.

With top-line troubles expected to persist in the near term, the City expects Amlin to suffer earnings dips of 15% in 2015 and 2% in 2016. Still, these numbers represent an improving outlook in the company’s key markets, and facilitated by its robust capital position Amlin is expected to keep dividends moving swiftly higher during the medium term at least.

Indeed, last year’s ordinary dividend is predicted to rise to 28.3p in the current 12-month period, and again to 29.6p in 2016. Consequently the yield bursts from an eye-watering 6.1% for 2015 to 6.4% next year. At these levels I believe that Amlin is hard to ignore for those seeking delicious dividend flows.

But whether or not share my positive take on the firms mentioned, I strongly recommend you check out this brand new and exclusive report that identifies a wide selection of FTSE favourites poised to deliver exceptional shareholder returns.

Our “5 Dividend Winners To Retire On” wealth report highlights a selection of incredible stocks with an excellent record of providing juicy shareholder returns. Among our picks are top retail, pharmaceutical and utilities plays that we are convinced should continue to provide red-hot dividends. Click here to download the report -- it's 100% free and comes with no further obligation.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.