Today I’m looking at three terrific FTSE-listed income plays.
Insurer marches on
As life insurance product demand surges across the globe, I believe Standard Life (LSE: SL) is in terrific shape to deliver resplendent profit – and consequently dividend – growth in the years ahead.
Standard Life saw assets under administration creep 2% higher between January and September, to £301.9bn, bolstered by terrific net inflows of £5.8bn during the period. And close to two-thirds of these inflows came from foreign shores, illustrating Standard Life’s sterling efforts in shaping and marketing its product portfolio for consumers the world over.
With earnings expected to flip 48% higher in 2015, the life insurance play is expected to churn out a dividend of 18.3p per share, up from 17.03p last year and yielding 4.6%. And an anticipated payout of 19.7p in 2016 nudges the yield to a delicious 4.9%.
A roaring retail star
Thanks to its long record of generating double-digit earnings growth, clothing and homeware retailer NEXT (LSE: NXT) has long been a pleasing play for dividend hunters. And with improving wage levels and falling grocery and fuel bills steadily boosting consumer spending power, I see no reason for the company’s appeal with income investors to decline.
The strength of Next’s brand power is something few on the High Street can match and, allied with the galloping popularity of its Next Directory online and catalogue arm, is something that continues to keep the tills ringing. Revenues leapt 6% during August-October, prompting the business to lift its full-year profit target to £810m-£845m.
With earnings anticipated to rise an extra 8% in the 12 months to January 2016, Next is expected to shell out a dividend of 398.1p per share, yielding a delicious 5%. And a forecasted 417.1p dividend in fiscal 2017 drives the yield still higher, to 5.3%.
A chipper income play
On the face of it ARM Holdings (LSE: ARM) may not appear an obvious selection for dividend-hungry investors. Because of the vast sums required to generate the next line of industry-leading microchips, yields at the Cambridge-based business have long lagged the market.
And this scenario is not expected to be consigned to history any time soon. Indeed, ARM Holdings is expected to produce a dividend of 8.3p per share in 2015, yielding just 0.7% – by comparison the FTSE 100 carries an average yield around 3.5%. And a projected payment of 10.1p for 2016 keeps the yield locked at a still-subdued 0.9%.
Still, I believe ARM Holdings’ decision to turbocharge shareholder returns makes the chipbuilder a highly-desirable selection for long-term investors – the company has raised dividends at a compound annual growth rate of 24.7% during the past five years.
And I fully expect dividends to continue tearing higher as hardware sales to tech alumni like Apple continue to surge, while diversification into other tech areas like servers and networking pays off.
