4 Payout Plays To Plough Your Cash Into: BT Group plc, GlaxoSmithKline plc, Carillion plc And Barratt Developments PLC

Today I am looking at four payout powerhouses that would supercharge any stocks portfolio.

BT Group

On first look BT (LSE: BT-A) may not be the most appetising payout pick out there, the firm having lagged the average market yield for some time now. And this trend is expected to continue for the medium term at least — the City expects the London company to shell out a reward of 14.4p per share for the 12 months ending March 2016, yielding just 3.2% versus 3.4% for the wider FTSE 100.

Still, I believe that BT’s terrific long-term earnings prospects should keep the firm’s ultra-progressive dividend policy in business. Indeed, the firm has lifted the total payment at a blistering compound annual growth rate of 13.8% during the past five years as profits have rocketed higher. BT is anticipated to raise the payout to 15.7p in 2017, yielding 3.5%, and with a rising subscriber base driving the bottom line higher and cash flows also on the rise, I expect dividends to continue blasting skywards.


The capital-intensive nature of GlaxoSmithKline’s (LSE: GSK) operations have cast some doubts over the scale of shareholder rewards in future years. To try and assuage these fears the pharma play has vowed to shell out a dividend of 80p per share right through to the close of 2017, a figure that creates an almost-unrivalled yield of 5.8%.

Of course there is no guarantee that GlaxoSmithKline will be able to make good on these promises, particularly as vast sums are required for the Brentford firm to develop new drugs and put to bed the enduring problem of patent losses. But I believe that GlaxoSmithKline’s pedigree in getting product from lab bench to market — its exciting mepolizumab anti-asthma drug received FDA approval for adults just last month — combined with further rounds of extensive cost-cutting should keep dividends trucking along at generous levels.


I am convinced that construction giant Carillion’s (LSE: CLLN) ability to grind out contract win after contract win with major private- and public-sector customers should maintain steady dividend growth as the bottom line swells. Even though construction data remains patchy, on a longer-term time horizon I believe the fruits of an improving UK economy should continue sending business Carillion’s way.

Meanwhile, the building play’s ability to throw up massive amounts of cash should copper-bottom investor confidence in dividends looking ahead, in my opinion. This view is shared by the number crunchers, who expect the business to lift the dividend from 17.75p per share in 2015 to 18.2p in 2016, and again to 18.9p in the following year. Consequently Carillion carries vast yields of 5.2% and 5.4% for these periods.

Barratt Developments

Make no mistake: the colossal gap between housing supply and demand in Britain is not likely to be fixed anytime soon. Such a scenario is playing into the hands of homebuilders such as Barratt Developments (LSE: BDEV), and with interest rates set to remain low well into 2016 at the earliest; lending products becoming cheaper and cheaper for new buyers; and owners becoming increasingly reluctant to put their properties on the market, the imbalance is only likely to get worse.

With home prices likely to keep surging as a result, the earnings outlook at the likes of Barratt Developments is as strong as at any time in recent memory. Subsequently the company is predicted to transform last year’s 10.3p-per-share dividend to 22.9p in the year concluding June 2016, producing a chunky yield of 3.6%. And this readout leaps to 4.5% for 2017 amid expectations of a 28.6p payment.

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Royston Wild owns shares of Barratt Developments. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.