Top FTSE 100 UK Dividend Paying Stocks – March 2024

Investing
Top FTSE 100 UK Dividend Paying Stocks - March 2024

The past few months have been busy for income investors, with a flurry of dividend announcements from FTSE 100 giants. This article delves deeper into the latest developments, offering insights beyond the headlines and providing valuable information for your investment decisions.

Top FTSE Dividend Paying Stocks

StockExpected Yield (%)1Yr Return
British American Tobacco (BATS)10.09-26.01%
Imperial Brands (IMB)8.62-15.67%
BT (BT.A)7.39-25.76%
Lloyds Banking Group (LLOY)5.93-7.33%
Schroders (SDR)5.59-18.27%
WPP (WPP)5.52-30.75%
Burberry (BRBY)4.92-49.05%
Beazley (BEZ)4.052.85%
GSK (GSK)3.8315.87%
Unilever (ULVR)3.837.65%
Reckitt Benckiser (RKT)3.8014.36%

Recent FTSE Dividend Updates

  • Increases: Lloyds Banking Group (LLOY), GlaxoSmithKline (GSK), Reckitt Benckiser (RKT), and Schroders (SDR) all announced dividend hikes, with Reckitt’s increase being the most substantial (6.7%). However, it’s important to note that GSK and Schroders’ increases were relatively minor.
  • Holds: Unilever (ULVR) maintained its consistent quarterly dividend, while WPP (WPP) also held its dividend steady.
  • Cuts: St. James’s Place (STJ) witnessed a significant dividend cut, with the final dividend falling to 8p from 37.19p, reflecting the company’s annual loss.
  • Reckitt Benckiser (RKT): Despite the dividend increase, investors reacted negatively to “disappointing” Q4 sales, highlighting the importance of considering all aspects of a company’s performance.
  • GSK (GSK): While the annual dividend edged slightly higher than 2022, it remains significantly below the pre-reset levels of 80p per share. The company has projected a 60p per share payout for the 2024 financial year, offering some hope for future growth.
  • Unilever (ULVR): The company’s decision to hold the dividend reflects a cautious approach in the current economic climate. However, their consistent track record of maintaining payouts could be appealing to income-focused investors.

Overall Dividend Landscape

  • 2023: Computershare reported a 5.4% year-on-year increase in UK dividends, reaching £88.5 billion, with oil, utilities, and banks contributing significantly to this growth.
  • 2024 Forecast: Headline growth, including specials, is expected to reach £93.9 billion, representing a 3.7% increase. However, excluding specials, growth is projected to be a more modest 2%.

Beyond Dividends: Share Buybacks

  • Companies like Barclays (BARC) are utilizing share buybacks to enhance shareholder returns, even if the headline dividend figure remains unchanged. This strategy can artificially inflate the share price, but it doesn’t necessarily translate to a direct increase in cash flow for investors.

Conclusion

While the UK market may not be offering the ideal scenario of combined share price gains and dividend growth, investors seeking income can still find opportunities. Carefully evaluating individual companies’ financial health, dividend history, and future outlook is crucial for making informed investment decisions.

  • Adam Grant

    Adam Grant is a highly qualified writer with a solid educational background in finance, holding a Bachelor's degree in Economics and a Master's degree in Business Administration (MBA). With his expertise in financial matters and a deep understanding of investment principles, Adam shares his insights to educate readers on the importance of financial literacy and smart investing strategies. Additionally, he has pursued courses in health and wellbeing, allowing him to offer a holistic perspective on achieving overall wellness in conjunction with financial stability.

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