LONDON -- I've trawled through the FTSE 100 to find the biggest dividend payers around, as measured by yield. What does the future hold for these blue-chip dividends?
Pharmaceuticals giant AstraZeneca paid $2.80 in dividends for 2012. The payout is expected to rise to $2.82 per share for this year before increasing again to $2.87 the year after. That's a forecast yield for 2014 of 6.3%.
The company has recently announced that it has modified the way it determines its level of dividend cover. Some may have read this as softening investors up ahead of a dividend cut. However, the recent final results also contained a number of references to a commitment to a progressive dividend. In the last five years, dividends at AstraZeneca have been increased by an average of 8.4% per annum. Future dividends will likely be higher but advance at a slower rate.
BAE Systems' earnings have not been that reliable recently. As a provider of defense equipment, the company is dependent on a small number of large orders.
While earnings have advanced and fallen back, dividend progression has been constant in recent years. BAE paid 19.5 pence per share for 2012. That was the ninth year running that BAE's dividend had been raised. In the last five years, the payout has been increased at an average rate of 8.8% a year.
BAE is forecast to pay 20.1 pence per share for 2013, rising to 20.6 pence for 2014. That puts the shares today on a forecast 2014 yield of 5.8%.
Royal Dutch Shell
Royal Dutch Shell is one of the best dividend-paying shares on the planet. The company has not cut its payout since the end of World War II. This year, Shell is expected to pay out more cash in dividends than any other company in the FTSE 100.
Shell is forecast to pay $1.87 of dividends for 2013. At today's price, that's a yield of 5.5% -- the average for an FTSE 100 share is just 3.2%. Analysts expect that Shell's dividend will then advance 3.1% for 2014, taking the yield to 5.7%. Earnings for 2013 are expected to be 2.3 times the dividend payout.
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