Interactive Investor

The four FTSE 100 companies paying £6bn of dividends in March

Shareholders in four of the UK's six largest companies will be responsible for an income windfall in the weeks ahead, marking the biggest monthly payout since September 2023. Graeme Evans names them here.

29th February 2024 11:56

Graeme Evans from interactive investor

AstraZeneca, Unilever (LSE:ULVR) and oil giants BP and Shell are set to remind investors of the income power of the FTSE 100 index at a time when other markets have been at record highs.

The heavyweight quartet are paying dividends of £6 billion in March, representing the bulk of the £6.85 billion due for distribution by eight blue-chip companies in the month.

The overall blue-chip total is the largest sum since September as the London market’s old economy stocks show their appeal as regular and dependable payers of dividends.

The FTSE 100 index currently yields dividend income of 3.8%, which compares with the S&P 500 index trading at record highs but on a yield of less than 1.5%.

The biggest yielding stock among London’s March dividend payers is the 8% on offer at Imperial Brands (LSE:IMB), which is due to distribute £452 million through 51.82p a share.

The award on 28 March brings the tobacco giant’s total dividend for the year to 146.82p, having made two awards of 21.59p in June and September and another of 51.82p in December.

Together with share buy-backs the company expects to return £2.4 billion to shareholders in the current financial year, which is about 15% of its current market value.

The biggest dividend outlay of the month is by AstraZeneca (LSE:AZN), whose distribution of about £2.4 billion stems from a second interim dividend of $1.97 a share.

This is unchanged for the second year in a row, resulting in a total dividend for the full year of $2.90. The pharmaceuticals company, which is celebrating its 25th anniversary, has reported total shareholder return of more than 40% in the period between 2021 and 2023, ahead of its global peer average and well ahead of the FTSE 100.

Shell (LSE:SHEL) has stepped up the level of its returns after targeting total shareholder distributions of 30-40% of its cash flow from operations, up from 20-30% previously.

The next dividend award is due to land in accounts on 25 March after chief executive Wael Sawan increased the fourth-quarter award by another 4% to $0.344 a share.

That compares with the previous year’s $0.2875 but is still below the $0.47 before April 2020’s landmark cut rebased the figure back to $0.16 a share. The payment in sterling terms will be determined by the currency rate on 11 March and is likely to be around 27.10p.

The total for the year of $1.293 is up by 25%, underpinned by Sawan’s enhanced focus on performance and stronger capital and spending discipline.

Like Shell, the BP (LSE:BP.) yield stands at more than 4% after the oil giant increased its total dividend for the year by 18% to 28.42 US cents a share. This includes the 28 March payment of 7.270 cents a share, representing a 10% year-on-year increase and the same as the third quarter

The conversion into sterling is based on the 12 March exchange rate and is likely to be in the region of 5.73p, up from the payment to UK shareholders of 5.5p the year before.

The quartet of big dividend payers in March is completed by Unilever, which is due to distribute £912 million through an unchanged fourth quarter dividend of 36.47p a share on 22 March.

Among the other blue-chip dividends in the month, 20p a share worth a total of £219 million is due from SSE (LSE:SSE) on 8 March.

That’s much lower than the previous year’s 29p a share after the renewable energy company said it would rebase the total dividend for 2023/24 to 60p a share. From there, it intends to target increases of between 5% and 10% up to 2026-27.

Company

Payment date

Current dividend yield (%)

SSE (LSE:SSE)

08-Mar

6.1

Pershing Square Holdings Ord GBP (LSE:PSH)*

15-Mar

1.0

Unilever (LSE:ULVR)

22-Mar

3.7

AstraZeneca (LSE:AZN)

25-Mar

2.2

Endeavour Mining (LSE:EDV)*

25-Mar

5.1

Shell (LSE:SHEL)*

25-Mar

4.1

Imperial Brands (LSE:IMB)

28-Mar

8.0

BP (LSE:BP.)*

28-Mar

4.8

Source: interactive investor, SharePad. Data correct as at 26 February 2024. *Dividend converted to sterling from dollars at exchange rates on 26 February 2024.

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