Today I’m looking at four FTSE 100 stocks with outstanding dividend potential.
Construct colossal returns
I believe that the housing sector is one of the ‘safest’ places for investors to stash their cash, making the likes of Taylor Wimpey (LSE: TW) a great pick for income chasers, in my opinion.
The sector isn’t without its risks, of course, as huge changes in buy-to-let lending conditions could significantly damage landlord demand. Still, I believe soaring demand from first-time buyers and the enduring housing stock shortage, should keep home prices rising.
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This view is shared by the City and Taylor Wimpey is expected to keep enjoying breakneck earnings growth. The homebuilder is anticipated to fork out dividends of 10.9p and 11.6p per share in 2016 and 2017, respectively, figures that yield an eye-watering 6.2% and 6.6%.
Motoring along
With car insurance premiums back on the rise, I reckon Admiral Group (LSE: ADM) is a great bet to keep chucking out market-beating dividends.
As well as enjoying improving market conditions in its home markets, Admiral is also benefitting from a steady turnaround in its European operations. As a result the firm’s total customer base leapt a chunky 9% last year to more than 4.4m.
Against this backcloth, Admiral is forecast to churn out a dividend of 111.7p per share this year, a figure that yields a tremendous 6%. And the yield marches to 6.3% for 2017 thanks to an estimated 117.4p reward.
TV star
Dividends over at broadcasting giant ITV (LSE: ITV) have grown at a terrific rate in recent years thanks to explosive earnings growth.
The company continues to enjoy breakneck revenues expansion across the business, with the top line swelling 33% at ITV Studios and 23% at its Online, Pay & Interactive units, respectively, during 2015. And ITV expects sales in these divisions to swell by double-digit percentages again this year.
With the television giant also throwing up plenty of cash, the Square Mile has pencilled-in dividends of 7.5p and 8.7p per share for 2016 and 2017. These figures throw up yields of 3.3% and 3.9%, and I expect these figures to keep on exploding along with profits.
Chip in
Unlike the stocks discussed above, ARM Holdings (LSE: ARM) may not be an obvious contender for dividend chasers owing to its ultra-low yields. For 2016, a dividend of 10.2p per share is currently forecast, yielding just 1.1% – by comparison the FTSE 100 average stands closer to 3.5%. And a projected 12.2p payout for 2017 yields 1.3%.
But like ITV, ARM has a terrific record of lifting shareholder rewards year after year. Indeed, dividends at the business have grown at a compound annual growth rate of 26% since 2011. And I expect rewards at the chipbuilder to keep on detonating, as demand for ARM’s cutting edge tech from a variety of fast-growth tech sectors marches skywards.
