You are here: Home - Investing - Experienced Investor - News -

Covid-19 takes its toll on FTSE’s serial dividend raisers

Written by: Emma Lunn
AJ Bell’s latest “Dividend Dashboard” shows that 14 firms have broken their 10-year dividend growth streaks during the first half of the year, with three firms joining the list.

The investment platform also found that just 14 FTSE 100 firms have increased their dividend for at least 10 consecutive years, down from 25 at the start of the year.

The average total return from the 14 ten-year dividend growers over the period is 622%, easily beating the FTSE 100’s 75% return.

Russ Mould, investment director at AJ Bell, says: “The pandemic and economic downturn have taken their toll on the FTSE 100’s elite list of serial dividend raisers. Just 14 firms can now point to a record of at least 10 consecutive increases in their annual dividend, down from 25 at the start of the year, and that includes three newcomers – Pennon, Legal & General and Intermediate Capital.

“The casualties are Associated British Foods, BAE Systems, Bunzl, Burberry, Compass, Imperial Brands, InterContinental Hotels, JD Sports, Johnson Matthey, Rightmove, St James’s Place and also SSE and Prudential, although in the case of the final two a change to the group structure was a contributory factor following the sale or spin-out of certain assets.”

“Any firm which can achieve a streak of 10 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 14 remaining serial dividend growers would have brought bumper returns to portfolio builders.”

AJ Bell found that average capital gain from the 14 10-year dividend growers is 481% and the average total return is 622%. Both easily beat the FTSE 100, at 20% and 75% respectively.

If the streaks can be maintained then there could be rewards for patient shareholders. All of the 14 firms to have increased their dividend in each of the past 10 years have beaten the FTSE 100 in capital and total return terms.

“The tricky bit is that only four of the 14 – BAT, Diageo, Legal & General and Sage – 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,” says Mould.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Interest-only mortgages could surge after coronavirus

Many mortgages on the market now come with an interest-only option, which could provide borrowers facing reduced income levels after...