Interactive Investor

The four FTSE 100 income stars returning big money in October

There are 14 blue-chip companies handing billions of pounds back to shareholders in the month ahead. City writer Graeme Evans runs through the income generators.

28th September 2023 13:53

by Graeme Evans from interactive investor

Share on

Golden pound symbol 600

An alcohol-fuelled £3.2 billion of dividends will be toasted by shareholders during October as 14 FTSE 100 companies including Diageo (LSE:DGE), Aviva (LSE:AV.) and GSK (LSE:GSK) are due to make payments.

Diageo will account for a third of the total haul with the Guinness and Smirnoff maker scheduled to distribute its full-year dividend of 49.17p a share on 12 October.

Diageo’s 5% higher dividend will offset a disappointing share price performance that meant the company’s total shareholder return fell 2% in the year to 30 June. The past year’s decline is in contrast to a stronger record over five and 10 years of 7% and 9% respectively.

The £1.1 billion payment will be the last one declared in sterling as Diageo has said it intends to change its reporting currency to US dollars.

The switch reflects the greater proportion of net sales and expenses linked to the greenback, a trend that the company expects to continue.

On the same day as the Diageo payment, GSK is due to distribute £573 million following July’s announcement of a 14p a share dividend relating to second-quarter trading.

That compares with the previous year’s equivalent of 16.25p, which has been adjusted for the share consolidation that took place after the demerger of consumer healthcare arm Haleon (LSE:HLN).

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

October’s payment means the drug giant’s shares yield 4%, the sixth-highest in the month and broadly in keeping with the FTSE 100 as a whole.

Aviva yields 7.9% based on plans for the 5 October payment of 11.1p a share, a move worth £304 million following the insurer’s half-year results announcement.

The 8% uplift in dividend is in line with Aviva’s pledge to pay about £915 million or 33.4p a share for 2023, with low-to-mid single digit growth in the cost of the dividend from 2024 onwards reflecting confidence in future cash generation.

The month’s top-ranking payer is Standard Life business Phoenix Group Holdings (LSE:PHNX), which trades with a 10% yield after announcing a 26p a share dividend for distribution on 23 October.

Other highlights for income investors include 6.7% yielding Land Securities (LSE:LAND), which is due to pay 9p a share or £67 million as the first quarterly award for the year to March 2024.

A 12p a share payment from packaging giant Smith (DS) (LSE:SMDS) also lands on shareholders’ doormats on 3 October. That’s almost 18% more than last year’s divi and means the total payout for the 12 months is 18p, up 20% on 2022, consistent with company policy of 2.0-2.5 times dividend cover over the medium term.

The timing of the results cycle means this month’s dividend total is down sharply from the £15.7 billion that flowed into accounts during September, when shareholders of AstraZeneca (LSE:AZN), Barclays (LSE:BARC) and Shell (LSE:SHEL) were among the beneficiaries.

Other stocks in the October dividend diary include the Asia-focused pair Standard Chartered (LSE:STAN) and Prudential (LSE:PRU), with their payments in sterling terms due to be about 4.95p and 5.16p for distribution on 13 October and 19 October respectively.

Source: interactive investor, SharePad. *Dividend converted to sterling from euros or dollars at exchange rates on 27 September 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.

Get more news and expert articles direct to your inbox