• 26 FTSE 100 stocks have grown their dividend every year for the past ten years
• On average these stocks are now yielding over 10% a year on the amount invested 10 years ago
• The average total return of these stocks is 600% compared to 103% from the FTSE 100 as a whole
These are some of the highlights from AJ Bell’s latest dividend dashboard report published today.
Russ Mould, investment director at AJ Bell, comments:
“Micro Focus has dropped out of the list of serial dividend raisers this quarter thanks to its demotion from the FTSE 100. That leaves 26 firms in the index that can point to at least 10 consecutive increases in their annual dividend.
“The average dividend yield for the 26 ten-year raisers is forecast to be 3.1%, well below the 4.8% average across the FTSE 100. But further analysis shows that companies that can consistently grow their dividend can deliver great investment returns both in terms of income and capital growth.
“Although they may be yielding only 3.1% on average today, people that invested in these 26 stocks ten years ago and benefited from the ten consecutive years of dividend increases would now be looking at an average dividend yield of 10.5% on their original investment.
“Some of the individual figures are quite remarkable with Ashtead yielding 53% and a total of ten firms yielding over 10% with a track record of consistent increases.”
|
|
2019 forecast dividend yield on June 2009 share price |
2009 actual yield on June 2009 share price |
|
Ashtead |
53.1% |
3.5% |
|
St. James's Place |
18.3% |
1.7% |
|
Hargreaves Lansdown |
14.7% |
2.6% |
|
InterContinental Hotels |
12.4% |
3.3% |
|
Croda |
11.8% |
2.9% |
|
Rightmove |
11.8% |
1.7% |
|
Imperial Brands |
11.5% |
4.1% |
|
British American Tobacco |
10.7% |
5.1% |
|
Compass |
10.3% |
3.3% |
|
Hiscox |
10.2% |
3.7% |
|
Spirax-Sarco Engineering |
9.7% |
3.2% |
|
Standard Life Aberdeen |
9.5% |
5.4% |
|
DCC |
8.5% |
2.8% |
|
Burberry |
8.5% |
2.6% |
|
Prudential |
8.3% |
3.1% |
|
Bunzl |
8.2% |
3.4% |
|
Intertek |
8.1% |
1.9% |
|
Sage |
7.4% |
3.2% |
|
Halma |
7.3% |
3.6% |
|
Diageo |
7.1% |
3.8% |
|
BAE Systems |
7.1% |
4.9% |
|
SSE |
7.1% |
6.3% |
|
JD Sports Fashion |
6.8% |
3.2% |
|
Johnson Matthey |
6.4% |
2.8% |
|
Associated British Foods |
5.5% |
2.5% |
|
Scottish Mortgage |
3.1% |
2.2% |
|
AVERAGE |
10.5% |
3.2% |
Source: Refinitiv data, company accounts, Digital Look, consensus analysts’ forecasts
“Dividend growth is so powerful as it almost inevitably drags a share price higher.
“Any firm which can achieve a streak of ten or more increases in its annual dividend must, on balance, be doing something right and with the benefit of hindsight, buying the FTSE 100’s 26 serial dividend growers ten years ago would have brought bumper returns.
“The average capital gain from the 26 ten-year dividend growers is 460% and the average total return is 600%. Both easily beat the FTSE 100, at 39% and 103% respectively.
“Of the 26 firms to have increased their dividend in each of the last 10 years only three – Standard Life Aberdeen, SSE and Imperial Brands - have failed to beat the index in capital terms. In total returns only one of the 26 – Imperial Brands – has failed to at least match the FTSE 100 in total return terms.
“The tricky bit is that only 12 of the 26 were actually in the FTSE 100 a decade ago, so investors may need to burrow through the FTSE 250 if they are looking for the next generation of dividend growth champions.”
|
|
Total return |
Dividend CAGR* |
Forecast dividend growth** |
|
|
|
2009-19 |
2009-18 |
2019 E |
2020 E |
|
Ashtead |
2931.2% |
29.3% |
17.2% |
10.1% |
|
JD Sports Fashion |
2929.5% |
6.6% |
12.3% |
17.2% |
|
Rightmove |
937.2% |
20.6% |
7.7% |
9.4% |
|
Halma |
893.3% |
6.3% |
9.2% |
7.8% |
|
Croda |
735.4% |
14.9% |
3.2% |
7.7% |
|
Spirax-Sarco Engineering |
729.3% |
10.7% |
8.4% |
9.2% |
|
Hargreaves Lansdown |
723.1% |
18.6% |
5.0% |
10.8% |
|
InterContinental Hotels |
655.7% |
12.0% |
19.1% |
8.2% |
|
Compass |
599.7% |
11.1% |
7.9% |
7.8% |
|
Scottish Mortgage |
448.8% |
3.3% |
1.9% |
1.9% |
|
Hiscox |
413.2% |
9.8% |
8.5% |
0.1% |
|
DCC |
409.9% |
10.6% |
10.1% |
5.6% |
|
Intertek |
379.3% |
14.5% |
8.2% |
8.1% |
|
Burberry |
373.6% |
11.7% |
6.0% |
8.3% |
|
St. James's Place |
361.3% |
26.8% |
2.2% |
9.7% |
|
Diageo |
356.4% |
6.1% |
5.1% |
6.4% |
|
Bunzl |
299.2% |
8.8% |
3.5% |
0.0% |
|
Sage |
285.9% |
8.3% |
3.2% |
3.4% |
|
Associated British Foods |
200.9% |
7.9% |
3.7% |
6.1% |
|
Prudential |
199.0% |
9.5% |
6.2% |
8.4% |
|
BAE Systems |
170.3% |
3.3% |
4.0% |
5.0% |
|
Johnson Matthey |
158.7% |
8.2% |
3.8% |
7.0% |
|
British American Tobacco |
122.7% |
7.4% |
3.9% |
0.0% |
|
Standard Life Aberdeen |
111.9% |
5.8% |
0.0% |
4.3% |
|
SSE |
106.4% |
3.2% |
(17.9%) |
6.3% |
|
Imperial Brands |
67.9% |
9.9% |
10.0% |
2.8% |
|
|
|
|
|
|
|
AVERAGE |
600.0% |
11.0% |
5.6% |
6.4% |
|
FTSE 100 |
102.7% |
6.5% |
6.1% |
2.9% |
Source: Refinitiv data, Company accounts. *Compound annual growth rate. **Source: Sharecast, consensus analysts’ forecasts
