3 More Big, Safe FTSE 100 Dividends
Feb 27th 2013 8:52PM
Updated Feb 28th 2013 2:10AM
LONDON -- I've trawled the FTSE 100 to find companies that I expect to continue paying big dividends. Here are another three.
Pharmaceuticals giant GlaxoSmithKline has been increasing its dividend to shareholders every year since 2002.
Shares in Glaxo are forecast to yield 5.3% in 2013. That is a 4.9% increase on the payout for 2012. The dividend is expected to rise again for 2014, increasing the prospective yield to 5.6%.
Dividend cover is not enormous at around 1.5 times forecast earnings. However, pharmaceuticals purchases are rarely discretionary, bringing a high level of visibility to Glaxo's future earnings.
Today, the shares trade on a 2013 price-to-earnings ratio of 12.6 times forecasts, falling to 11.5 times expected profits for 2014.
BP is currently fighting a legal battle over its role in the Gulf of Mexico disaster in 2010. If BP suffers an unfavorable judgment, a multibillion pound fine could be in the cards. This may affect BP's ability to pay future dividends.
Last year, BP paid $0.33 of dividends. That equates to a yield of 4.9%. The payout is forecast to increase this year to $0.42. That would mean a dividend yield of 6.2% against today's buy price.
In anticipation of fines, BP has been selling some assets. The company also now has a new deal in place with Russian state oil company Rosneft.
J Sainsbury is the outstanding operator among the FTSE 100 supermarkets. The company has enjoyed 32 quarters of successive like-for-like sales growth. Unlike Tesco, it has not issued a profit warning in recent years. Unlike Morrison's, Sainsbury has been increasing its market share.
Sainsbury's has been growing its dividend to shareholders since 2005. In the last five years, dividends have increased by an average of 10.1% per year.
For the next two years, dividend growth is expected to slow. Slightly higher earnings growth is forecast, meaning that the dividend will be more secure. At today's price, the shares trade on an expected yield for 2014 of 5.1%.
While these three income stocks offer impressive payouts today, our analysts here at The Motley Fool think that there is an even better income share available in the FTSE 100. This share offers not only a high yield but also a real chance of significant share price appreciation. All of our expert opinion and analysis is in the new Motley Fool report "The Motley Fool's Top Income Share for 2013." This report is totally free. Click here to learn more about this big dividend payer today.
The article 3 More Big, Safe FTSE 100 Dividends originally appeared on Fool.com.David O'Hara does not own shares of any of the above companies. The Motley Fool owns shares of Tesco. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.