Murray Income Trust (LSE: MUT) increased its last full-year dividend by 3.4% to record 30 consecutive years of annual growth. At a recent share price of 768p the trailing yield is 4%.
Picking great dividend shares has helped the trust outperform the FTSE All-Share Index over the past three, five and 10 years.
Murray Income has recently been adding to HSBC (LSE: HSBA) (NYSE: HSBC.US), BHP Billiton (LSE: BLT) and Unilever (LSE: ULVR). Concerns over the emerging markets exposure of these companies has led to share price weakness, but the trust believes that the long term outlook for their end-markets remains bright.
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Unilever
Unilever is famed for its exposure to emerging markets, which contribute 57% (and rising) to group revenue.
The consumer goods giant spooked investors last September, with an unscheduled trading update warning of “weakening in the market growth of many emerging countries in quarter three”. Nevertheless, by the end of the year, management was able to report underlying sales growth in emerging markets of 8.7%, helping the group to overall growth of 4.3%.
Unilever’s shares are off their 52-week lows, but still some 17% below their 2,885p high of last May. Analyst dividend forecasts for the current year give a yield of 3.9%, comfortably above the FTSE 100 average of 3.2%.
BHP Billiton
The amount of metal-bearing rock, coal, and oil and gas that BHP Billiton extracts every day is mind-boggling. The Asia-Pacific region — and China in particular — is the company’s biggest market.
After a couple of weak years for miners, BHP Billiton posted a 31% rise in underlying profit in its interim results last month. Analysts expect that broadly to carry through for the company’s fiscal year to 30 June. In the longer term, management is confident that, “the fundamentals of wealth creation and urbanisation should benefit general commodities demand”.
BHP Billiton’s shares are currently nearer the bottom of their 52-week trading range than the top. Analyst dividend forecasts give a nice yield of 4.2%.
HSBC
Well over half of HSBC’s income comes from outside of Europe and North America — from higher-growth markets stretching from Asia-Pacific to Latin America.
In its annual results, released last month, HSBC noted the sharp sell-off in some emerging markets, but stressed that emerging markets are not a generic category: “The countries most affected have two common themes, large current account deficits and the uncertain outcomes arising from elections within a year”.
HSBC said it remains optimistic about longer-term prospects, and the opportunities presented by the bank’s positioning for an anticipated material expansion in South-South trade and capital flows. At the time of writing, the company’s shares are close to a 52-week low of 592p — down some 23% from their highs of last May. Analyst dividend forecasts give a juicy yield of 5.5%.
