Monday, 31 January 2011

FTSE 100 Dividends in 2010 and 2011

One element of the DIY Income Investor approach is to hold high-yield shares from the FTSE 100 (the 100 largest companies in the London Stock Exchange). As reported in the Daily Mail today, if you strip out the effect of BP cancelling its dividend, overall dividend payments were up 7.5%  in 2010.

The Daily Mail reported that in 2010 dividend payouts by FTSE 100 companies dropped 3.3% to £56.5bn, with BP's dividend cancellation knocking a hefty £5.4bn off the total. But if the impact of BP is removed, dividends were up 7.5% as companies reinstated or increased their dividends after repairing their balance sheets in the wake of the credit crunch.

Payments by UK companies are still concentrated among a few big payers. Three-fifths of all dividend payments came from the top 15 (i.e. largest) companies in 2010.

So - on average - if you held a High Yield Portfolio of FTSE 100 shares, excluding BP, your income would have increased by more than inflation.

What is more, Investors Chronicle report that Capita Registrars are forecasting  that UK dividend payments in 2011 will be between £59.6bn and £63m, a rise of between 9% and 11.5% on the £56.5bn paid out in 2010, and just below the £63.1bn paid in 2007 before the financial crisis. Adjusted for inflation, dividends are still well behind 2007 levels.

The fifteen companies which accounted for 61% of dividends in 2010 are:
  • Royal Dutch Shell
  • Vodafone
  • HSBC Holdings
  • GlaxoSmithKline
  • AstraZeneca
  • British American Tobacco
  • BP
  • BHP Billiton
  • Tesco
  • National Grid
  • Standard Chartered
  • Diageo
  • Unilever
  • Imperial Tobacco Group
  • Reckitt Benckiser Group

I am not a financial advisor and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

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