FE Trustnet recently published a research report listing the most popular UK income stocks held by UK Equity Income Funds. The 20 stocks in the list are all members of the FTSE 100 index. According to the report, AstraZeneca, Centrica and Imperial Tobacco are the highest-conviction plays among UK Equity Income managers.
The most popular UK equity income stocks are listed below with their ticker on the US market and the current dividend yields:
| S.No. | Company | Ticker | Dividend Yield as of Feb 8, 2013 |
|---|---|---|---|
| 1 | GlaxoSmithKline | GSK | 5.16% |
| 2 | Royal Dutch Shell | RDS-A | 5.10% |
| 3 | Vodafone | VOD | 5.56% |
| 4 | BP | BP | 5.00% |
| 5 | HSBC | HBC | 3.17% |
| 6 | British American Tobacco | BTI | 4.06% |
| 7 | AstraZeneca | AZN | 5.90% |
| 8 | Imperial Tobacco | ITYBY | 4.63% |
| 9 | BT | BT | 3.30% |
| 10 | Centrica | CPYYY | 4.54% |
| 11 | BHP Billiton | BBL | 2.87% |
| 12 | Unilever | UL | 3.16% |
| 13 | Legal & General | LGGNYX | 4.49% |
| 14 | Rio Tinto | RIO | 2.88% |
| 15 | BAE Systems | BAESY | 5.57% |
| 16 | Tesco | TSCDY | 4.04% |
| 17 | Reed Elsvier | RUK | 3.15% |
| 18 | National Grid | NGG | 5.79% |
| 19 | BG Group | BRGYY | 1.41% |
| 20 | Diageo | DEO | 2.41% |
Source: The most-popular stocks with UK Equity Income managers, FE Trustnet
British companies have traditionally paid out a larger portion of their earnings as dividends compared to US firms.The country dividend yield for U.S. and UK as of Feb 7 is 2.1% and 3.3% respectively per FT market data. The dividend yield of the S&P 500 has stayed around 2% for many years now. High dividend yields and no withholding taxes on dividends for US residents make British income stocks attractive to US investors.
Except HSBC none of the other top British banks appear in the list above. HSBC weathered the global credit crisis well and has a strong presence in the US market. Imperial Tobacco and British American Tobacco have consistently paid out high dividends and are perennial favorites for income investors and fund managers alike. Overall US investors looking to add British dividend stocks to their portfolios can use the stocks listed as a starting point.
Disclosure: Long LGGNY
