Should You Invest In Dividend Delights GlaxoSmithKline plc, British American Tobacco plc & Persimmon plc?

Today I am looking at three FTSE stocks set to deliver stunning shareholder returns.


Backed up by its stellar product pipeline, I believe GlaxoSmithKline (LSE: GSK) is a terrific bet for those seeking attractive income flows in the near term and beyond. Earlier this year the business vowed to shell out a dividend of 80p per share through to 2017, a target that yields an impressive 5.9%.

GlaxoSmithKline’s pledge underlines the confidence it has that its exciting product pipeline will offset the loss of key, revenues-driving labels looking ahead. The City expects earnings to have slipped for a fourth successive year in 2015 as generic competitors smash demand for critical medicines. But an 11% anticipated bounceback next year indicates the sterling potential created by GlaxoSmithKline’s R&D department.

The Brentford firm advised this month that US regulators had given the green light to its Nucala add-on product for severe asthma, while its ViiV Healthcare unit also reported promising Phase II data for its HIV treatments. With GlaxoSmithKline planning to submit up to 20 new regulatory filings within the next five years, I reckon long-term investors should enjoy splendid returns.

British American Tobacco

And like GlaxoSmithKline, I believe that the rising financial might of emerging regions should power revenue growth at British American Tobacco (LSE: BATS) in the coming years. These territories, and particularly those of Latin America, continue to cause the London firm a headache as adverse currency pressures weigh.

However, British American Tobacco is upping investment in its ‘Global Drive Brands’ such as Kent and Pall Mall, products that boast supreme pricing power, in order to drive long-term growth and offset these woes. And with good reason — volumes of these labels leapt 7.2% during January-September. With these brands gobbling up market share, the City expects the tobacco play to bounce from a 1% earnings decline in 2015 to punch a 7% advance next year.

And with British American Tobacco also bolstering its e-cigarette proposition, a market spearheaded by its Vype technology, the business is in great shape to keep its progressive payout policy trucking. Indeed, a projected dividend of 155.7p per share for this year produces a chunky 4.2% yield, and this figure edges to 4.4% for 2016 amid predictions of a 163.3p reward.


Due to the steady flow of positive data coming from the UK housing sector, I believe construction specialists such as Persimmon (LSE: PSN) should deliver chunky returns in the years ahead. Just yesterday the ONS announced that the average home price leapt 6.1% year-on-year in September, speeding up from 5.5% in the previous month and driven by resplendent buyer demand.

And Persimmon announced this month that buying activity had strengthened entering the autumn period, with private sales rates rising 12% between mid-August and the start of November, accelerating from 5% over the summer. Although this reflects the traditional seasonality of the market to some degree, a backcloth of favourable lending conditions, low interest rates and improving customer affordability should keep home sales motoring higher, in my opinion.

 Consequently Persimmon is expected to see earnings rocket 26% and 10% higher in 2015 and 2016 correspondingly, a terrific omen for dividends during the period. Indeed, the calculator bashers expect the housebuilder to deliver a payment of 99.6p per share in 2015, yielding a brilliant 5.5%. And a 107.4p dividend forecast for next year produces an exceptional 5.9% yield. I believe dividends should keep on thriving as the British housing crunch persists.

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Royston Wild has no position in any shares mentioned. 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.