The Motley Fool

Income investors: these FTSE 100 stocks haven’t cut dividends! I’d buy them in an ISA now

Image source: Getty Images

Buying shares for income has become a minefield of late. Companies of all shapes and sizes are cutting or reducing shareholder payouts as their profits sink and their balance sheets feel the strain. Even stacks of FTSE 100 stocks have decided to rebase their dividend policies in the wake of the Covid-19 crisis.

Fear not though. The UK stock market remains jam-packed with companies that should continue to lavish their investors with dividends over the short-to-medium term. And some of these FTSE 100 businesses are worthy of serious investor attention today.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Markets mammoth

London Stock Exchange Group’s (LSE: LSE) 1% dividend yield for 2020 clearly isn’t one of the biggest out there. But never mind that: the rate at which the blue-chip has lifted annual dividends over the past half decade has been truly staggering. And City analysts expect payouts to continue exploding, despite the coming economic storm.

In fact, the group stands to benefit from these conditions that are driving turbulence on financial markets. Major buying and selling activity drove London Stock Exchange’s total revenues 13% higher during the first quarter. It also drove demand for the Footsie firm’s information services, and its data services arm FTSE Russell enjoyed a 7% sales uptick between January and March.

Finally, London Stock Exchange has a rock-solid balance sheet to support its ultra-progressive dividend policy. I’d happily buy it in an ISA today.

Another FTSE 100 star

Smith & Nephew (LSE: SN) has, like London Stock Exchange, decided to persist with paying dividends despite the Covid-19 quake. Healthcare-related stocks are considered to be some of the safest out there in tough economic times. And this FTSE 100 giant’s decision to maintain its payout policy underlines this theme.

That’s not to say that the artificial limb maker hasn’t had a torrid time of late. Smith & Nephew has seen demand for its high-tech products slump in recent months as the coronavirus outbreak has caused non-essential surgeries across the globe to be kicked into the long grass. This caused underlying revenues at the Footsie firm to crumble 8% in the first quarter.

Screen of price moves in the FTSE 100

Getting back to business

However, with countries having expanded their healthcare facilities to deal with coronavirus patients and global infection rates beginning to slow, Smith & Nephew can look forward to demand for its products gradually picking up again.

Indeed, back in early May the company declared that “the recovery in China is encouraging, as is the restart of elective surgeries in many other countries, and especially within the US.” Sales in these hot growth regions rocketed 8% and 24% respectively back in 2019, underlining the exceptional long-term revenues potential of these territories.

Smith & Nephew’s near-term dividend isn’t the biggest either. In 2020, it sits at 1.4%. But like London Stock Exchange, City brokers expect steep rises in the annual payout over the medium term at least. Both have rock-solid balance sheets to support these projections and this, allied with their bright earnings outlooks, makes them brilliant buys for income-hungry investors, in my opinion.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.