What This Top Dividend Portfolio Is Holding Now: Vodafone Group plc, Unilever plc And Schroders plc

Murray Income Trust (LON:MUT) counts Vodafone Group plc (LON:VOD), Unilever plc (LON:ULVR) and Schroders plc (LON:SDR) among its dividend darlings.

| 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.

Murray Income Trust (LSE: MUT) delivered its forty-first consecutive annual dividend increase last year. And picking great dividend shares, such as the ones I look at below, has helped the trust outperform the FTSE All-Share Index over the past three, five and ten years.

Market conditions may be volatile at present, but Murray remains “confident that the best way to generate attractive long term returns is to invest in globally competitive businesses with robust balance sheets and experienced management teams”.

Vodafone

Vodafone has an experienced management team led by chief executive Vittorio Colao, who was appointed in 2008, having previously held a number of senior country and regional positions within the group.

Vodafone had net debt of £29bn at the last tally. A big number in absolute terms, but the market capitalisation is £62bn, and the balance sheet is strong relative to sector peers. Furthermore, Vodafone has just completed a massive three-year investment programme, so cash flow should improve significantly going forward.

The chief executive said last month: “We continue to face regulatory and competitive challenges in many markets, but we are confident that the business is well positioned for the growth opportunities ahead”.

Vodafone is one of the higher-yielding blue chips held by Murray Income Trust. The mobile giant is forecast to deliver an 11.48p dividend for its financial year ending 31 March, giving a yield of 5.3% at a share price of 216p. Analysts see the dividend ticking up at least in line with inflation for the next couple of years.

Unilever

Unilever is Murray’s biggest holding. And you’d be hard-pressed to find a better example of the kind of globally competitive business with robust balance sheet and experienced management team that the trust seeks to invest in.

Chief executive Paul Polman is a veteran of the consumer goods industry, having started at Proctor & Gamble in 1979 and done a stint at Nestlé, before joining Unilever in 2008. Unilever has modest net debt of £8.5bn, and the company’s global reach and competitiveness are amply demonstrated by sales growth ahead of its markets and a rising operating margin.

Unilever’s shares are trading at 3,070p, and with an 88.49p dividend paid for 2015, the trailing yield is a relatively modest 2.9%. However, the trade-off is reliability, with annual mid to high single-digit dividend increases forecast to continue.

Schroders

Murray Income Trust has been adding to its holding in asset manager Schroders this year. Schroders was established in 1804, and continues to be controlled by descendents of the founders. You don’t survive for over 200 years without being adept at management succession-planning and having a wealth of experience to draw on — currently embodied by 83-year-old Bruno Schroder, a non-executive director and member of the nominations committee.

With a strong balance sheet and prudent management, Schroders weathered the 2008/9 financial crisis with little problem. The dividend has increased from 37p in 2010 to 87p last year. At a share price of 2,700p the trailing yield is 3.2%, although if you buy the non-voting share class (ticker SDRC) at 2,056p, you get a yield of 4.2%.

Dividend growth is forecast to moderate after the tremendous increases of recent years, but Schroders remains an appealing stock in the financial sector, which is not exactly renowned as a bastion of long-term, prudent management.

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.

G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. 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

With a P/E ratio of 9, is the Aviva share price a bargain?

Christopher Ruane looks at the Aviva share price and considers some strengths and weaknesses of the FTSE 100 insurance business.

Read more »

Surprised Black girl holding teddy bear toy on Christmas
US Stock

Is it too late to buy growth stock Shopify after its 25% pop?

Up more than 40% this year, Shopify is on fire at the moment. Here, Edward Sheldon explains how he’d play…

Read more »

Investing Articles

Investors should consider buying this energy AIM stock, up 50% in the past year

AIM stock Afentra has seen a stellar price rise in 12 months to November. I believe there may be room…

Read more »

Investing Articles

2 ISA shares to consider for a large passive income!

Looking for dividend shares to buy in a Stocks and Shares ISA or Lifetime ISA? Royston Wild reveals two of…

Read more »

Young mixed-race woman jumping for joy in a park with confetti falling around her
Investing Articles

A Bitcoin investment that can be held inside a Stocks and Shares ISA or SIPP

UK investors can’t buy Bitcoin ETFs for their investment accounts or SIPPs due to FCA regulation. This stock could be…

Read more »

Entrepreneur on the phone.
Investing Articles

As the Vodafone share price slides 6% on lacklustre H1 results, what does the future hold?

After posting moderate results this morning, Vodafone saw its share price sink further, erasing this year's gains. Our writer looks…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing For Beginners

If I’d invested £5k in a FTSE tracker fund after the pandemic crash, here’s what I’d have now

Jon Smith explains the extent of his potential gains if he'd invested in a FTSE tracker fund during the Covid…

Read more »

Investing Articles

2 top shares I’ve bought for my Stocks and Shares ISA in November

This writer reveals a pair of fast-growing businesses that he's recently added to his Stocks and Shares ISA for the…

Read more »