The dividend outlook for much of the FTSE 100 has come under significant pressure in recent months.
Creaking balance sheets and poor earnings outlooks have put paid to the progressive policies of many of the index’s go-to dividend stocks, leading many investors to look further afield for strong — and reliable — income flows.
With this in mind I’m looking at four London stars outside the FTSE 100 that appear on course to deliver stunning returns.
Build a fortune
FTSE 250 play 3i Infrastructure’s (LSE: 3IN) focus on core infrastructure projects across Europe makes it a solid selection for those seeking abundant dividend flows, in my opinion.
3i Infrastructure saw its portfolio generate income of £21.8m during January-March, up from £18.6m a year earlier. And promisingly, the firm commented that its investment adviser “continues to make good progress in developing its pipeline of investment opportunities,” a promising sign for earnings and dividend expansion.
The City expects 3i Infrastructure to increase an anticipated 7.3p-per-share dividend for the year ended March 2016 up to 7.5p in the period to March 2017, resulting in a chunky 4.5% yield. And a projected 7.8p reward in 2018 drives the yield to a handsome 4.7%.
Space star
I reckon that real estate investment trust (or REIT) SEGRO (LSE: SGRO) is also a scintillating stock selection thanks to improving conditions in the UK and on the continent.
SEGRO specialises in ‘big box’ logistics sites as well as urban distribution and light industrial warehouses, its portfolio benefitting from structural growth in hot areas like e-commerce. Indeed, the quality of the firm’s property portfolio saw vacancy rates fall to just 4.8% in 2015, the lowest level for well over a decade.
The number crunchers expect SEGRO to shell out a dividend of 16.1p per share for 2016, yielding a terrific 4%. And the yield moves to 4.2% for next year thanks to predictions of a 16.6p reward.
Media mammoth
Shares in business information and media group Centaur Media (LSE: CAU) have moved steadily lower since the autumn, a situation that makes the company a top-level value selection in my book.
The business announced last month that it had made an “encouraging” start to the year, and is aiming to deliver revenues growth of 5% in 2016. Indeed, Centaur Media’s rising focus on the high-quality digital paid-for content and live events markets should deliver resplendent top-line expansion well beyond this year, in my opinion.
City brokers expect Centaur Media to deliver a 3.2p-per-share dividend in 2016, yielding an eye-watering 6.2%. And an anticipated payout of 3.4p for next year pushes the yield to a brilliant 6.6%.
Recruit a dividend great
With earnings at recruitment specialist SThree (LSE: STHR) expected to speed relentlessly higher from this year onwards, the Square Mile unsurprisingly expects the business to get dividends chugging higher once more
SThree announced that gross profit cantered 10% higher during December-February, with double-digit growth across its ICT and Life Sciences divisions offsetting continued weakness across its oil and gas-related activities. On top of this, SThree is expanding its presence in the strong North American market to deliver sterling returns.
Against this backcloth, the City expects SThree to lift a long-running dividend of 14p per share to 14.4p in the year to November 2016, and again to 14.8p in the following period. Consequently the stock boasts exceptional yields of 4.6% and 4.8% for these years.
