These 10 Companies Pay Half of all UK Dividends

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The British equity market is an excellent hunting ground for yield-seeking investors. British firms have a strong dividend culture and have high dividend yields on their equities. For American investors, an added advantage is that there is no withholding taxes on dividends (excluding REITs).

Despite the pros, the British stock market has a structural issue according to a study Henderson Global Investors. From an article quoting the study:

The top ten companies pay half of all UK dividends, with the top 20 companies paying 70% of all UK dividends.

Source: Seven out of 10 UK equity income funds hold these 10 companies, MoneyWise, April 21, 2017

Hence investors seeking to gain exposure to British income stocks may want to consider adding the top ten companies. These stocks are listed below their current dividend yield on the US market:

1.Company: AstraZeneca PLC (AZN)
Current Dividend Yield: 4.70%
Sector: Pharmaceuticals

2.Company: Vodafone Group PLC (VOD)
Current Dividend Yield: 5.93%
Sector: Wireless Telecom

3.Company: British American Tobacco PLC (BTI)
Current Dividend Yield: 3.21%
Sector:Tobacco

4.Company: GlaxoSmithKline (GSK)
Current Dividend Yield: 4.92%
Sector: Drugs

5.Company: HSBC Holdings PLC (HBSC)
Current Dividend Yield: 6.38%
Sector: Banking

6.Company: BP PLC (BP)
Current Dividend Yield: 7.06%
Country: UK

7.Company: Royal Dutch Shell PLC (RDS.A)
Current Dividend Yield: 7.31%
Sector: Oil, Gas & Consumable Fuels

8.Company: Legal & General PLC (LGGNY)
Current Dividend Yield: 9.80%
Sector: Insurance

9.Company: Aviva PLC

10.Company: Imperial Brands PLC (IMBBY)
Current Dividend Yield: 4.02%
Sector:Tobacco

Note: Dividend yields noted above are as of April 24, 2017. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Disclosure: No Positions

 

U.S. Ranks 33rd in terms of Dividend Yield Globally

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The US equity market has one of the low to average dividend yields in the world. The S&P 500’s yield has been around 2% for many years now. Of the 44 countries in the MSCI All-Country World Index, the US ranks poorly. Based on the dividend yield the US stands at the 33rd spot.

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Source: Client Letter – February 2017, Richard C. Young & Co Ltd.

Foreign-born Population As a Percentage of Total Population for Select Countries

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The number of foreigners (i.e. foreign-born people) relative to total population varies across countries. Some countries such as those in Eastern Europe have low foreign-born population since they have been closed economies until the iron curtain fell. Luxembourg(LUX) and Switzerland (CHE) have the highest foreign-born population since they are tax havens. Mexico (MEX) and Poland(POL) have the lowest foreign-born population according to the latest OECD data. In the US, the rate is under 15%.

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Source: OECD Factbook 2015-2016