British companies are projected to increase dividend payouts by 10% this year according to a report by Capita Registrars Dividend Monitor. Captia Registrars expects overall dividend yield to be 4.4% in 2011.
While most investors focus on stock prices, dividends are an important part of total return. Quoting the Barclays Equity Gilt Study, the monitor report notes that a £100 invested at the end of World War II would have been worth £5,721 at the end of 2008 in nominal terms. But if dividends were invested the same £100 would be worth £92,460. This example shows the tremendous power of dividend reinvesting over many years.
The report added that 61% (or £34.4 billion) of all dividends paid out in 2010 came from just 15 companies. Hence investors looking to add some high-quality British dividend stocks may start with the following stocks:
1.Royal Dutch Shell plc (RDS.B)
Sector: Oil
Current Dividend Yield: 4.58%
2.Vodafone (VOD)
Sector: Telecom
Current Dividend Yield: 3.17%
3. HSBC Holdings (HBC)
Sector: banking
Current Dividend Yield: 2.82%
4. GlaxoSmithkline (GSK)
Sector: Major Drugs
Current Dividend Yield: 5.49%
5. Astra Zeneca (AZN)
Sector: Major Drugs
Current Dividend Yield: 7.76%
6. British American Tobacco(BTI)
Sector: Tobacco
Current Dividend Yield: 2.76%
7. BP plc (BP)
Sector: Oil
Current Dividend Yield: 3.56%
8. BHP Billiton(BBL)
Sector: Metal Mining
Current Dividend Yield: 2.22%
9. Tesco (TSCDY)
Sector: Retail Grocery
Current Dividend Yield: 2.02%
10.National Grid plc (NGG)
Sector: Electric Utility
Current Dividend Yield: 4.57%
11. Standard Chartered Banking(SCBFF)
Sector: Banking
Current Dividend Yield: 2.49%
12. Diageo (DEO)
Sector: Beverages (Alcoholic)
Current Dividend Yield: 3.78%
13. Unilever (UL)
Sector: Food Processing
Current Dividend Yield: 3.89%
14. Imperial Tobacco (ITYBY)
Sector: Tobacco
Current Dividend Yield: 6.30%
15. Reckitt Benckiser Group (RBGPY)
Sector: Household products
Current Dividend Yield: 2.78%
Disclosure: No Positions
Note: The dividend amounts and projected yield noted in the monitor report are based on stocks trading on the local market while the yields shown above are for the ADRs.
