BT, Vodafone and BAT to reward income investors in February

The 584,000 shareholders of BT Group (LSE:BT.A) will be among the beneficiaries when ten FTSE 100 companies hand over dividends worth a total of £4.7 billion in February.

They also include mobile phone giant Vodafone Group (LSE:VOD) and income stock British American Tobacco (LSE:BATS), which last year paid the third-highest annual sum by a FTSE 100 company.

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The biggest distribution of the month will be on 20 February when Reckitt Benckiser Group (LSE:RKT) returns £1.6 billion to shareholders through a special dividend of 235p a share.

The one-off payment relates to proceeds from the sale of Reckitt’s Essential Home business to Advent International and will be accompanied by a 24-for-25 share consolidation.

This reduces the number of shares in issue by about the same proportion of market capitalisation returned via the special dividend. This means the market price of each Reckitt share should remain at a broadly similar level.

Excluding this one-off payment by Reckitt, the amount being returned to FTSE 100 shareholders during February is broadly similar to last year’s level at £3 billion.

The biggest ordinary dividend will be BAT’s payment of £1.3 billion, which is the final quarterly instalment of 60.06p a share in relation to 2024 annual results.

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The tobacco giant, which boasts more than 25 consecutive years of dividend growth, is due to disclose the levels for the next four quarters when it posts annual results on 12 February.

According to this week’s dividend monitor by Computershare, BAT last year kept its place as the third-biggest payer in the FTSE 100 behind HSBC Holdings (LSE:HSBA) and second-placed Shell (LSE:SHEL).

The report showed total UK dividends fell 0.9% to £87.5 billion but when excluding special dividends and currency movements the figure was a better-than-expected 3.6% higher.

Computershare’s projection for 2026 points to underlying dividend growth of 2%, with UK equities projected to yield 3.3% over the next 12 months.

Among February’s dividend payers, BAT yields the highest income at 5.4% followed by BT Group at 4.3%.

The telecoms group is due to make a half-year distribution of 2.45p, which is 2% higher than a year ago and in line with its policy of paying 30% of the prior year's full year dividend.

The award worth £239 million on 11 February comes as BT continues to make progress towards its cash-flow targets of £2 billion in the 2027 financial year and £3 billion in 2030.

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BT has been the largest investor in UK infrastructure of any company listed on the FTSE 100, having committed capital expenditure of £24.3 billion in the past five financial years.

As the company nears the end of its fibre network build, the expected sharp improvement in cash flow has boosted hopes in the City of an acceleration in dividend growth.

Analysts are also positive on the dividend outlook at Vodafone, which is due to pay the equivalent of £457 million through 2.25 euro cents or 1.95p a share on 4 February.

This sum is unchanged from the previous year, when the sale of operations in Italy and Spain and merger of Vodafone’s UK business with Three meant a new capital allocation framework that halved the total 2025 dividend to 4.5 euro cents.

The restructuring and recent signs of trading progress in key markets including Germany and UK have fuelled hopes for bigger distributions in the future.

Berenberg’s recent forecasts point to a dividend of 4.61 cents in 2026, rising to 4.75 cents in 2027 and the 4.89 cents the year after. The shares trade with a current dividend yield of about 3.7%, which compares with 9.5% in 2024.

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Among other blue-chip dividends, caterer Compass Group (LSE:CPG) is due to hand over 43.3 US cents to shareholders on 26 February.

The full-year award is up from the previous year’s award of 39.1 cents, although the impact of a stronger pound on dollar-denominated dividends means there’s little change in sterling terms at an expected 31.38p.

Head of editorial Lee Wild owns shares in BT Group.

Source: interactive investor, ShareScope. Data and dividend conversions to sterling at exchange rate correct on 29 January 2026.