JP Morgan Claverhouse IT (LSE: JCH) extended its dividend record to 42 consecutive years of increases when it announced its annual results last month. At a current share price of 620p, the trust is on a trailing yield of 3.2%.
Picking great dividend shares has helped JP Morgan Claverhouse outperform the FTSE All-Share Index over the past three, five and 10 years.
Among its largest holdings, the trust has overweight positions in Vodafone (LSE: VOD) (NASDAQ: VOD.US), British American Tobacco (LSE: BATS) and AstraZeneca (LSE: AZN) (NYSE: AZN.US).
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Vodafone
Mobile giant Vodafone is working hard to replenish lost earnings after selling its stake in US phones firm Verizon Wireless for £84bn last year. In a trading update in February, the company reported improving revenue trends in most of its major markets, and good progress on its massive Project Spring investment programme and the integration of cable acquisitions in Germany and Spain.
Although it will be some years before earnings get back to previous levels, Vodafone is committed to paying an increasing dividend in the meantime. Analysts expect to see an 11.5p a share payout when the company announces its results for the financial year ended 31 March, giving a juicy 5% yield at a current share price of 228p.
British American Tobacco
British American Tobacco lifted its dividend by 4% for the year ended 31 December 2014 when it announced its annual results in February. The company said it expects the trading environment to remain difficult during 2015, with foreign exchange headwinds continuing to impact the business. Nevertheless, the Board said it is confident “we will deliver value to our shareholders in the short and long term”.
Analysts are forecasting another 4% increase in the dividend this year to around 154p, giving a yield of 4.1% at a current share price of 3,750p.
AstraZeneca
AstraZeneca has been through three years of falling earnings, largely as a result of expiring patents on a number of its top-selling drugs. Nevertheless, the company has been able to maintain its dividend at 280¢ a share. The good news is that the pipeline of new drugs has gone from strength to strength since Pascal Soriot came in as chief executive at the back-end of 2012.
Analysts don’t expect the pipeline to translate into a big pick-up in earnings just yet, and the consensus is for the dividend to again be held at 280¢ this year. However, at current exchange rates that translates to around 187p (compared with 178p last year), giving an above-market-average yield of 3.9%. Furthermore, there’s potential for the payout to grow strongly in the not-too-distant future.
