Analysis suggests around three quarters of FTSE100 companies are likely to be making regular payouts by mid-2021
(Picture: PA)MINING, consumer and healthcare stocks top a new list of shares judged likely to start paying dividends by mid-2021 as the markets come back from six months in the Covid deep freeze.
Analysis by investment bank Peel Hunt suggests around three quarters of FTSE100 companies are "likely" or “extremely likely” to be making regular payouts by the middle of next year.
Aound half of the blue-chip index cancelled or slashed regular payouts as the pandemic crashed ashore, including previously bulletproof stocks like Royal Dutch Shell. Likewise the FTSE 250 companies, as well as more than 100 companies listed on Aim.
Banks are still off the menu, as haggling continues with regulators over restarting investor rewards and bring back employee bonuse
But Peel Hunt now suggests 44 companies on the UK’s blue-chip index are “extremely likely” to reinstate or continue payouts by June 2021, with another 26 considered “likely” to have done so yielding a total of £32.7billion.
It said: “We have focused on these categories given investors looking for income will be keen for some guidance given the difficulties so far in 2020.
"Sectorally, the mining, miscellaneous/utilities, consumer and healthcare sectors offer the biggest ‘extremely likely’ dividend streams, with decent flows also expected from the insurance, building and industrials areas.
“The ‘likely’ category has a large amount expected from the oil and gas stocks, as well as technology and insurance companies."
Company
Est divi / share - p
Est share price - p
Est yield - %
Admiral
65.6
2758
2.4
AngloAmerican
44
1984
2.2
Antofagasta
8.1
1038
0.8
Ashtead
15.0
2975
0.5
AstraZeneca
146.40
8028
1.8
Avast
7.5
495
1.5
BAE Systems
13.8
458
3
BHP
50
1609
3.1
BAT
55.9
2572
2.2
CRH
57.4
2845
2.0
Croda
50.5
6264
0.8
DCC
49.5
5028
1.0
Diageo
27.41
2628
1.0
DS Smith
5.4
309
1.7
Experian
11.4
2970
0.4
Fresnillo
13.0
1219
1.1
GlaxoSmithKline
19.0
1353
1.4
Glencore
1.9
167
1.1
Halma
7.0
1089
1.2
Hargreaves Lansdown
11.2
1378
0.8
Homeserve
8.3
1167
0.7
Imperial Brands
20.85
1300
1.6
Intermediate Capl
16.9
1230
1.4
Intertek
64.2
5996
1.1
Legal & General
13.0
196
6.6
LSE
51.6
9192
0.6
National Grid
16.89
945
1.8
Pearson
13.5
512
2.6
Persimmon
70.0
2593
2.7
Phoenix
24.1
687
3.5
PolyMetal
68.7
1760
3.9
Reckitt Benckiser
101.6
7000
1.5
RELX
32.0
1635
2.0
Rentokil
2.9
544
0.5
Rio Tinto
190.0
4578
4.2
RSA Group
10.1
436
2.3
Sage
11.1
694
1.6
Schroders
79
2750
2.9
SEGRO
14.4
944
1.5
Smurfit Kappa
70
3124
2.2
SSE
24.34
1377
1.8
Taylor Wimpey
3.8
119
3.2
Unilever
37
4694
0.8
United Utilities
14.4
890
1.6
The latest Janus Henderson Global Dividend Monitor show UK payouts dropped 54 per cent on a headline basis in the second quarter of 2020 — with HSBC, Shell, Lloyds and Glencore making the biggest impact.
Meanwhile FundCalibre has estimates which suggest dividends will still be down by about 30 per cent overall next year, 15 per cent down from 2019 levels in 2022.
Any return to payments cannot come too soon for ordinary savers and pension firms in particular, where dividends and dividend growth play a critical role in achieving sustainable income and long-term returns at a time when interest rates are near zero and falling.
Laith Khalaf, a financial analyst at AJ Bell, said: “Cutting dividends isn’t new to the pandemic, but it has certainly happened on the broadest scale I’ve seen before with scalps like Shell cutting payments, something that didn’t happen even with the financial crisis... a Shell dividend cut was almost unthinkable.
“But if you look at the FTSE now a lot of pain is already in the price, and a lot of the dividend cuts are priced in, so looking forward the yield on the FTSE for new money going in is pretty good.
“UK equity is a good market for income seekers and will be good again, but it clearly needs to rebuild from the low base it’s at at the moment.”
