Fill Your Stocking With Dividend Stars Standard Life Plc, NEXT plc & ARM Holdings plc!

Royston Wild explains why income chasers need to check out Standard Life Plc (LON: SL), NEXT plc (LON: NXT) and ARM Holdings plc (LON: ARM).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today I’m looking at three terrific FTSE-listed income plays.

Insurer marches on

As life insurance product demand surges across the globe, I believe Standard Life (LSE: SL) is in terrific shape to deliver resplendent profit – and consequently dividend – growth in the years ahead.

Standard Life saw assets under administration creep 2% higher between January and September, to £301.9bn, bolstered by terrific net inflows of £5.8bn during the period. And close to two-thirds of these inflows came from foreign shores, illustrating Standard Life’s sterling efforts in shaping and marketing its product portfolio for consumers the world over.

 With earnings expected to flip 48% higher in 2015, the life insurance play is expected to churn out a dividend of 18.3p per share, up from 17.03p last year and yielding 4.6%. And an anticipated payout of 19.7p in 2016 nudges the yield to a delicious 4.9%.

A roaring retail star

Thanks to its long record of generating double-digit earnings growth, clothing and homeware retailer NEXT (LSE: NXT) has long been a pleasing play for dividend hunters. And with improving wage levels and falling grocery and fuel bills steadily boosting consumer spending power, I see no reason for the company’s appeal with income investors to decline.

The strength of Next’s brand power is something few on the High Street can match and, allied with the galloping popularity of its Next Directory online and catalogue arm, is something that continues to keep the tills ringing. Revenues leapt 6% during August-October, prompting the business to lift its full-year profit target to £810m-£845m.

With earnings anticipated to rise an extra 8% in the 12 months to January 2016, Next is expected to shell out a dividend of 398.1p per share, yielding a delicious 5%. And a forecasted 417.1p dividend in fiscal 2017 drives the yield still higher, to 5.3%.

A chipper income play

On the face of it ARM Holdings (LSE: ARM) may not appear an obvious selection for dividend-hungry investors. Because of the vast sums required to generate the next line of industry-leading microchips, yields at the Cambridge-based business have long lagged the market.

And this scenario is not expected to be consigned to history any time soon. Indeed, ARM Holdings is expected to produce a dividend of 8.3p per share in 2015, yielding just 0.7% – by comparison the FTSE 100 carries an average yield around 3.5%. And a projected payment of 10.1p for 2016 keeps the yield locked at a still-subdued 0.9%.

Still, I believe ARM Holdings’ decision to turbocharge shareholder returns makes the chipbuilder a highly-desirable selection for long-term investors – the company has raised dividends at a compound annual growth rate of 24.7% during the past five years.

And I fully expect dividends to continue tearing higher as hardware sales to tech alumni like Apple continue to surge, while diversification into other tech areas like servers and networking pays off.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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

More on Investing Articles

Investing Articles

3 of my top FTSE 250 stocks to consider buying before April

Buying undervalued UK shares can be a great way to generate long-term wealth. Here, Royston Wild reveals a handful on…

Read more »

Ice cube tray filled with ice cubes and three loose ice cubes against dark wood.
Investing Articles

Just released: our 3 top income-focused stocks to buy before April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Investing Articles

Is this the best chance to buy cheap FTSE 100 shares in a generation?

I want to buy shares when they're cheap, and sell... never, just keep taking the dividends. And the FTSE 100…

Read more »

Man putting his card into an ATM machine while his son sits in a stroller beside him.
Investing Articles

Could NatWest shares be 2024’s number one buy for passive income?

For those of us looking to earn some long-term passive income, how does NatWest's 7% dividend yield sound? It sounds…

Read more »

Investing Articles

£12K in savings? Here’s how I could turn that into £13K annual passive income

This Fool explains how investing a lump sum can help her build a passive income stream to enjoy in her…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Here’s why Rolls-Royce shares are now set to fly over the £4 mark

Once again, Rolls-Royce shares are crushing the FTSE 100. Should I add to my holding of this stock at the…

Read more »

Investing Articles

1 under the radar FTSE 100 AI stock investors should consider buying

Our writer explains why this FTSE 100 pick could be a shrewd investment with its established experience of using AI…

Read more »

Investing Articles

Does the beaten-down Diageo share price make it a no-brainer buy?

Harvey Jones spent years waiting for the Diageo share price to look like good value, before finally buying it in…

Read more »