M&G and L&G top yields as FTSE 100 dividends stabilise before expected 2025 bounce
Published: 10:35 07 Oct 2024 EDT
FTSE 100 dividend forecasts have stabilised in the past few months, with the UK's blue-chip companies set to report modest growth this year and a rebound in 2025.
Dividends from FTSE 100 companies are set to total £78.6 billion in 2024, growth of 1% compared to last year, according to a quarterly dividend report from AJ Bell, which compiles consensus analysts’ forecasts for each company in the index.
A previous report in April had noted that estimates for this year had anticipated an 11.5% decline compared to last year.
For 2025, aggregate dividends are estimated to climb to £83.9 billion, a 7% improvement on the expected total for this year.
The FTSE 100's forward dividend yield is 3.7% for 2024 and 4.0% for 2025, based on current forecasts for ordinary dividend payments.
However, the total cash yield is 7.7% for the FTSE 350 if already unveiled plans for £49.9 billion of share buybacks this year, £11 billion of forecast dividends from FTSE 250 companies and £47.2 billion of live or completed takeover offers are added.
This would take the FTSE 350's aggregate cash return to £189.7 billion, adding dividends to buybacks and takeovers, versus a £2.5 trillion market capitalisation.
"That figure compares very favourably to the 5.00% Bank of England base rate, the 10-year gilt yield of 3.92% and the prevailing rate of inflation of 2.2%, based on the consumer price index," said AJ Bell.
Ten biggest FTSE 350 forecast dividend increases
- Rolls-Royce Holdings PLC (LSE:RR.) £452m
- International Consolidated Airlines Group SA (LSE:IAG) £307m
- Admiral Group Plc (LSE:ADM) £176m
- Berkeley Group Holdings PLC (LSE:BKG) £161m
- Vistry Group PLC (LSE:VTY) £160m
- Associated British Foods PLC (LSE:ABF) £140m
- LondonMetric Property PLC (LSE:LMP) £130m
- AstraZeneca PLC (LSE:AZN) £129m
- National Grid PLC (LSE:NG.) £109m
- GSK PLC (LSE:GSK, NYSE:GSK) £80m
Top yields
- M&G PLC (LSE:MNG) 9.5%
- Legal & General Group PLC (LSE:LGEN) 9.5%
- Phoenix Group Holdings PLC (LSE:PHNX) 9.4%
- British American Tobacco PLC (LSE:BATS) 8.0%
- Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) 7.4%
- Aviva PLC (LSE:AV.) 7.3%
- HSBC Holdings PLC (LSE:HSBA) 7.2%
- Imperial Brands PLC (LSE:IMB) 6.8%
- Schroders PLC (LSE:SDR) 6.3%
- Land Securities Group PLC (LSE:LAND) 6.1%
