Interactive Investor

FTSE 100 dividends in January total almost £2.6bn

Christmas is the most expensive time of year for many of us, so investors in these blue-chip companies will be pleased to hear there’s a dividend cheque coming their way in the month ahead.

2nd January 2024 14:35

Graeme Evans from interactive investor

Dividends from National Grid (LSE:NG.) and GSK (LSE:GSK) and a first distribution by Marks & Spencer Group (LSE:MKS) in four years are among 15 blue-chip payments totalling £2.58 billion in January. 

The first of these took place earlier today when Piccadilly Lights owner Land Securities Group (LSE:LAND) handed shareholders a second interim dividend of 9.2p a share worth £69 million.

Tomorrow sees Next (LSE:NXT) pay £84 million through a 66p a share half-year dividend, while the outsourcing firm Bunzl (LSE:BNZL) is due to distribute £62 million, or 18.2p a share.

Their awards are small in scale compared with the £716 million from the electricity transmission and distribution business National Grid on 11 January.

The income play benchmarks its dividend against the increase in average annual CPI plus housing costs, meaning the shareholder payment is protected in real terms. As a result, the dividend for the six months to 30 September has been increased by 9% to 19.4p a share.

The company, which has previously disclosed it has sufficient distributable reserves to cover more than five years of forecast dividends, trades with a current yield of 5.2%.

January’s next biggest dividend by value is £576 million from GSK, having declared an unchanged 14p a share third-quarter payment for 11 January.

The drugs giant continues to expect to pay 56.5p a share across 2023, with its longer-term guidance for a 40-60% earnings pay-out ratio through the investment cycle.

GSK shares yield 4.2%, which is just ahead of the wider FTSE 100 index at 4%. 

The highest yielding of January’s dividend payers is Burberry Group (LSE:BRBY) at 6.8% after a poor run for its shares. The luxury goods group, which targets a full-year pay-out of around 50% of adjusted earnings, is due to make an interim award of 18.3p on 26 January. 

One of this month’s dividend highlights is also one of the smallest as Marks & Spencer is due to pay a “modest” 1p a share worth £20 million on 12 January.

The distribution follows the improvement in the retailer’s operating performance, balance sheet and credit metrics, with shares more than doubling to 272p in 2023.

Despite the progress, M&S loyalists among the 100,000 or so retail investors will recall being above 500p in 2015 and sharing a dividend pot worth £375 million the following year.

Broker Peel Hunt said recently it is looking for a total dividend for the current financial year of 6p, rising to 8p a share in 2025.

On the same day as M&S, Primark owner Associated British Foods (LSE:ABF) is due to pay £349 million through a final dividend of 33.1p a share, plus return of surplus capital through a special dividend of 12.7p a share.

The payments are part of a 37% jump in the total for the September financial year to 60p a share, as inflationary pressures and volatility have eased compared with a year ago.

The other FTSE 100 companies set to distribute dividends in January are JD Sports Fashion (LSE:JD.), RS Group (LSE:RS1), Intermediate Capital Group (LSE:ICP), Severn Trent (LSE:SVT), 3i Group Ord (LSE:III), Auto Trader Group (LSE:AUTO) and DS Smith (LSE:SMDS).

Source: interactive investor, SharePad.

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