Interactive Investor

The 13 FTSE 100 shares behind July’s dividend bonanza

29th June 2023 13:59

by Graeme Evans from interactive investor

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Shareholders have the enviable job of deciding what to do with the billions of pounds being paid to shareholders in July. Here are the blue-chip companies returning cash over the next month.

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The first summer dividend from British Gas in four years is among £2.5 billion of payments due to flow into the accounts of shareholders at 13 blue-chip companies in July.

Centrica (LSE:CNA), the gas firm’s parent company, scrapped June 2020’s £200 million distribution of 3.5p a share due to the pandemic and did not declare anything for the following two years.

Payments resumed in November with the £59 million interim award of 1p a share before February’s annual results revealed plans for 2p a share worth £118 million on 20 July.

That’s still a far cry from the 8.4p a share the last time Centrica handed out a summer dividend in June 2019, or the bumper 12.08p shareholders got from ex-chief executive Sam Laidlaw when he announced the June 2014 distribution of £614 million.

The Centrica income stream slowed significantly in July 2019 when former boss Iain Conn rebased the dividend due to “changed circumstances”, including the UK energy price cap and increased demands on cash flows such as additional pension contributions.

Under Chris O’Shea, a much stronger performance in 2022 and improved outlook have resulted in the return of distributions as Centrica pursues a longer-term progressive dividend policy and eventually looks for cover from earnings of around two times.

Another popular stock paying shareholders next month is GSK (LSE:GSK) after April’s first quarter results revealed the intention to hand out 14p a share or £567 million on 13 July. That compares with the previous year’s equivalent of 17.5p, which has been adjusted for the share consolidation that took place after the demerger of the consumer healthcare arm Haleon.

GSK reiterated in April that it expects to declare dividend payments totalling 56.5p a share for 2023 and will be guided longer term by a 40-60% pay-out ratio through the investment cycle.

Next month’s payment means the drugs giant’s shares yield 4.4%, making it one of six FTSE 100 companies in the dividend diary for July trading at 4% or above.

The largest is the 6.8% on offer at Land Securities Group (LSE:LAND), where the £90 million payment of 12p a share compares with 13p the year before and has resulted in a 4.3% increase to 38.6p for the 12 months to 31 March. Shares have fallen 17% in the past year.

B&Q owner Kingfisher (LSE:KGF), another company whose valuation has fallen in the past year, has a current yield of 5.4% ahead of the 3 July full-year payment of 8.6p a share worth £165 million.

Sainsbury (J) (LSE:SBRY), which yields 4.9%, is paying 9.2p a share or £218 million to shareholders on 14 July and advertising and marketing group WPP (LSE:WPP) is distributing £258 million through the award of 24p a share on 7 July. It yields 4.7%.

On the same day as WPP, the leisure group Whitbread (LSE:WTB) and Primark owner Associated British Foods (LSE:ABF) are both due to make shareholders payments of around £100 million.

In the case of the Premier Inn owner, the 49.8p a share stems from annual results while the AB 14.2p a share from AB Foods is an interim award. The conglomerate paid 43.7p in relation to 2022 trading, including January’s full-year 29.9p worth £235 million.

The smallest blue-chip distribution of the month is the £35 million by Baillie Gifford’s Scottish Mortgage Ord (LSE:SMT) investment trust, whose shareholders are likely to be more interested in the growth of a portfolio that includes Tesla Inc (NASDAQ:TSLA), NVIDIA Corp (NASDAQ:NVDA) and ASML Holding NV (EURONEXT:ASML) than the 4 July award of 2.5p a share.

The other blue-chip stocks paying dividends in July are distribution services business Bunzl (LSE:BNZL) on 4 July, Severn Trent (LSE:SVT) on 14 July, Experian (LSE:EXPN) on 21 July and Compass Group (LSE:CPG) on 27 July.

Company

Payment date

Current dividend yield (%)

Kingfisher (LSE:KGF)03-Jul5.4
Bunzl (LSE:BNZL)04-Jul2.1
Scottish Mortgage Ord (LSE:SMT)04-Jul0.6
Whitbread (LSE:WTB)07-Jul2.2
WPP (LSE:WPP)07-Jul4.7
Associated British Foods (LSE:ABF)07-Jul2.2
GSK (LSE:GSK)13-Jul4.4
Sainsbury (J) (LSE:SBRY)14-Jul4.9
Severn Trent (LSE:SVT)14-Jul4.0
Centrica (LSE:CNA)20-Jul2.5
Land Securities Group (LSE:LAND)21-Jul6.8
Experian (LSE:EXPN)*21-Jul1.5
Compass Group (LSE:CPG)27-Jul1.4
Source: interactive investor, SharePad. *Dividend converted from 37.75 US cents at exchange rate on 28 June 2023.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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