Why Hungry Dividend Hunters Must Check Out Barclays PLC, National Grid plc, Prudential plc And Big Yellow Group plc

Royston Wild explains why Barclays PLC (LON: BARC), National Grid plc (LON: NG), Prudential plc (LON: PRU) and Big Yellow Group plc (LON: BYG) are all hot income plays.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today I am looking at four London lovelies poised to deliver brilliant dividends.

Barclays

British banking star Barclays (LSE: BARC) grabbed the headlines in Tuesday trading following chatter that former JP Morgan banker Jes Staley is poised to fill the vacant CEO position. The American’s background has obviously raised questions over whether Barclays is poised to reignite its Investment Bank, particularly as previous head Antony Jenkins was intent on scaling back the department in favour of doubling-down on its retail footprint.

The news could of course have huge ramifications for both Barclays’ risk profile and cost base, so more cautious investors should pay close attention to developments in the coming weeks and months. Still, I believe the bank’s strong high-street presence, strong e-banking proposition and lucrative African assets make it a very respectable stock market selection.

With earnings expected to pound higher thanks to these factors, Barclays is anticipated to raise the dividend from 6.5p per share for the past three years to 6.7p in 2015, yielding 2.6%. And this leaps to 3.5% for 2016 amid predictions of a 9p reward.

National Grid

For those seeking reliable-if-unspectacular share suggestions, I believe power play National Grid (LSE: NG) provides the perfect solution. Earnings are not expected to explode due to the capital-intensive nature of electricity network provision. But the dependable role of electricity in the developed economies of the UK and US is predicted to push the bottom-line steadily higher in the coming years, a promising omen for future dividends.

On top of this, National Grid remains focussed on building its asset base by between 5% and 6% per annum on both sides of the Atlantic, a scenario that should continue to underpin solid investor returns. For the 12 months ending March 2016 National Grid is anticipated to provide a dividend of 43.8p per share, up from 42.87p in 2015 and yielding a stonking 4.8%. And this figure moves to 4.9% for 2017 due to expectations of a 45p payment.

Prudential

Thanks to its unremitting focus on emerging markets, I reckon Prudential (LSE: PRU) is in great shape to deliver excellent returns for both growth and income chasers. In particular, the company plans to extend its tentacles still further into the explosive markets of Asia, continuing the strategy of former chief executive Tidjane Thiam. And this appears to be a shrewd strategy — pre-tax profits from the continent galloped 20% higher in January-June, to $632m.

But Prudential’s global presence is also giving it access to other white-hot markets, and profits from the US jumped by almost a quarter to $846m in the period. With surging business inflows also flooding the firm with cash, Prudential is predicted to hike last year’s 36.93p per share dividend to 39.8p in 2015, and again to 43.6p next year. Yields of 2.6% and 2.9% may not be spectacular, but I expect bubbly earnings expansion in the years ahead to keep driving dividends skywards.

Big Yellow Group

A steadily-improving domestic economy bodes extremely well for storage specialists Big Yellow Group (LSE: BYG), in my opinion. With citizens’ wallets become increasingly fatter, and homesteads up and down the country become more congested with the latest fashions and furnishings as retail activity takes off, the need for extra space is becoming all the more critical.

Combined with Britons’ growing reluctance to throw away old items, Big Yellow Group is reaping the rewards and is steadily expanding to cater to growing demand — the firm opened its newest outlet in Enfield in April and is busy converting another site in Cambridge. With earnings expected to keep chugging higher, the business is predicted to fork out a payment of 24.8p per share in the year to March 2016, up from 21.7p last year and yielding 3.6%. And this rises to 4% for 2017 due to predictions of a 28p dividend.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Google office headquarters
Investing Articles

1 reason I like buying S&P 500 shares – and 1 reason I don’t

Will this investor try to improve his potential returns by focusing more on S&P 500 shares instead of British ones?…

Read more »

Young woman holding up three fingers
Investing Articles

3 SIPP mistakes to avoid

Our writer explains a trio of potentially costly errors he tries to avoid making when investing his SIPP, on an…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

Here’s how (and why) I’d start buying shares with £25 a week

Our writer uses his investment experience and current approach to explain how he would start buying shares on a limited…

Read more »

Aerial shot showing an aircraft shadow flying over an idyllic beach
Investing Articles

Here’s my 5-step approach to earning passive income of £500 a month

Christopher Ruane explains the handful of steps he uses to target hundreds of pounds in passive income each month.

Read more »

Investing Articles

2 UK shares I’ve been buying this week

From a value perspective, UK shares look attractive. But two in particular have been attracting Stephen Wright’s attention over the…

Read more »

Investing Articles

A lifelong second income for just £10 a week? Here’s how!

With a simple, structured approach to buying blue-chip dividend shares at attractive prices, our writer's building a second income for…

Read more »

Investing Articles

Here’s how I’d use a £20k Stocks and Shares ISA to help build generational wealth

Discover how our writer would aim to turn a £20k Stocks and Shares ISA into a sizeable nest egg by…

Read more »