Interactive Investor

Investors to receive £5.4bn of holiday money in August

27th July 2023 13:44

by Graeme Evans from interactive investor

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Some of the most generous companies in the FTSE 100 are sending money to shareholders over the next few weeks. Check your accounts for credits from these blue-chips.

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Dividend payments totalling £4.6 billion will flow from just four companies in August, including two of the top-yielding stocks in the FTSE 100 index.

The widely-held quartet of Vodafone Group (LSE:VOD), National Grid (LSE:NG.), Unilever (LSE:ULVR) and British American Tobacco (LSE:BATS) account for the bulk of the £5.4 billion being distributed by 11 blue-chips in the month.

Shareholders of Burberry Group (LSE:BRBY), Next (LSE:NXT) and Johnson Matthey (LSE:JMAT) are also set for a boost to their summer holiday spending plans when the trio share the spoils of 2022-23 trading.

Other August dividends to look forward to include the top flight investment trust F&C (LSE:FCIT), as well as the 5.05p a share heading to the large number of ii customers with All-Share investment group City of London (LSE:CTY) in their portfolios.

The biggest distribution of the month comes from National Grid, which is handing over £1.38 billion through the payment of 37.6p on 9 August.

The electricity transmission and distribution business benchmarks its dividend against the increase in average annual CPI plus housing costs, meaning the payment is protected in real terms. For 2022-23, this meant an overall rise of 8.77% to 55.44p a share.

National Grid had £14 billion of distributable reserves at the end of March, which it points out is sufficient to cover more than five years of forecast group dividends.

The company’s shares yield 5.3%, which compares with the chunky 9.9% at Vodafone after the mobile phone giant’s valuation recently slumped to its lowest level in three decades.

New boss Margherita Della Valle left the full-year dividend unchanged at 4.5 euro cents (3.86p) in May’s annual results, meaning shareholders will get a pot of £1.04 billion when the distribution is made on 4 August.

The exact amount will be determined tomorrow (Friday) based on the day’s foreign exchange rates. But recent moves mean the sterling conversion will be less favourable than the 3.95p a share received when Vodafone also gave out 4.5 euro cents in January.

A bigger concern for shareholders is likely to be ongoing speculation in the City that Vodafone’s dividend is unsustainable and that it will have to cut returns in order to focus resources on improving its operational performance.

The month’s other big-yielding stock is British American Tobacco, which is paying the equivalent of £1.29 billion through 57.72p a share on 18 August. This is the second of four equal quarterly instalments in relation to its 2022 performance, leading to a 8.3% yield.

At the other end of the spectrum, two of the FTSE 100’s lowest-yielding stocks are making distributions. They include the fire safety technology business Halma (LSE:HLMA), which is distributing £47 million through a full-year award of 12.34p a share on 18 August.

This payment is part of a total of 20.20p in relation to 2022-23 trading, which represents Halma’s 44th consecutive year of dividend per share growth of 5% or more.

JD Sports Fashion (LSE:JD.), whose priorities are focused on driving growth on both sides of the Atlantic, is handing over £35 million with 0.67p a share on 4 August. It yields 0.5% compared with Halma’s 0.9%.

The first dividend payments of the month are due on Tuesday, when clean air business Johnson Matthey pays 55p a share, Next hands over 140p a share and United Utilities Group Class A (LSE:UU.) distributes 30.34p a share worth just over £200 million.

Unilever shareholders will have to wait until 31 August for the 37p a share declared alongside Tuesday’s second-quarter results. This is worth £931 million in total.

CompanyPayment dateCurrent dividend yield (%)
Johnson Matthey (LSE:JMAT)01-Aug4.2
Next (LSE:NXT)01-Aug2.9
United Utilities Group Class A (LSE:UU.)01-Aug4.5
F&C Investment Trust Ord (LSE:FCIT)01-Aug1.5
Burberry Group (LSE:BRBY)04-Aug4.4
JD Sports Fashion (LSE:JD.)04-Aug0.5
Vodafone Group (LSE:VOD)*04-Aug9.9
National Grid (LSE:NG.)09-Aug5.3
British American Tobacco (LSE:BATS)18-Aug8.3
Halma (LSE:HLMA)18-Aug0.9
Unilever (LSE:ULVR)31-Aug3.5
Source: interactive investor, SharePad. *Dividend converted to sterling on 26 July 2023.

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