The UK offers an excellent hunting ground for income investors. Britain has traditionally been a market with a strong dividend culture and accordingly many large-cap firms have high dividend yields relative to their US peers. In addition, for US-based investors British dividend stocks are a good choice among foreign stocks since the UK charges no dividend withholding taxes on dividends paid out to US investors. However this rule does not apply to dividends paid out by UK REITs.
According to an article in the Money Observer half of the FTSE 100 dividends are projected to come from just seven firms. From the article:
Dividend research forecasts £39 billion will be paid out by just seven firms in 2017, while dividend cover looks ‘worryingly thin’.
The latest ‘dividend dashboard’ from AJ Bell, which looks at analysts’ forecasts for the FTSE 100 companies, suggests that the blue chip dividend environment looks bleak in 2017.
Although £78.4 billion is forecast to be paid out in 2017 – an increase of 6.25 per cent on 2016 forecasts amounting to a yield of 4.2 per cent – more than half of that (51 per cent) is still expected to come from only seven businesses.
These include oil companies Royal Dutch Shell and BP and pharmaceuticals GSK and AstraZeneca, as well as HSBC, British American Tobacco and Vodafone.
Source: Half of FTSE 100 dividends to come from just seven companies in 2017, Money Observer
The above seven stocks are listed below with their dividend yield on the US market:
1.Company: Royal Dutch Shell PLC (RDS.A)
Current Dividend Yield: 7.05%
2.Company: BP PLC (BP)
Current Dividend Yield: 6.66%
3.Company: GlaxoSmithKline (GSK)
Current Dividend Yield: 5.50%
4.Company: AstraZeneca PLC (AZN)
Current Dividend Yield: 5.13%
5.Company: Vodafone Group PLC (VOD)
Current Dividend Yield: 6.08%
6.Company: British American Tobacco PLC (BTI)
Current Dividend Yield: 3.90%
7.Company: HSBC Holdings PLC (HSBC)
Current Dividend Yield: 6.14%
Note: Dividend yields noted above are as of Dec 14, 2016. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.
Disclosure: No Positions