With data from the housing industry continuing to surpass expectations, I reckon Taylor Wimpey (LSE: TW) remains a great dividend stock to buy and hang onto well into the future.
Latest Bank of England data showed mortgage approval for property purchases galloping to 11-month highs in January, up 2.4% from December levels, to 69,928, again confounding predictions of a slump in homebuyer appetite.
And Taylor Wimpey itself lauded the strength of the domestic homes market this week. The builder commented that “UK housing market fundamentals remain good with strong customer confidence in our core geographies,” adding that “the market is underpinned by a competitive mortgage market and low interest rates.”
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Despite fresh rhetoric from the government in the form of a recent white paper, hard action to address the country’s massive housing imbalance remains elusive, and this should continue to power shareholder returns at the likes of Taylor Wimpey.
With earnings therefore expected to keep rising at the firm, the City has chalked-in dividends of 13.8p and 14.9p per share in 2017 and 2018 respectively, yielding 7.5% and 8%. I reckon the Taylor Wimpey should be on the radar of all serious dividend searchers.
The perfect payout pill?
The exceptional progress of GlaxoSmithKline’s (LSE: GSK) R&D teams convinces me that the pharma ace should deliver increasingly-handsome dividends in the years to come.
The company has kept the dividend locked at 80p per share since 2014 as it has invested heavily in its product pipeline and tackled the problems of critical patent expirations. And the City expects GlaxoSmithKline to make good on its pledge to keep payouts around this level until the end of this year. This creates a bumper 4.8% yield.
And as the firm’s suite of new earnings drivers flies off the shelves — new product sales rocketed to £4.5bn during 2016 — the abacus bashers expect GlaxoSmithKline to get dividends moving higher again from 2018. An 80.3p per share reward is currently forecast, also yielding 4.8%.
And with it expecting test data on between 20 to 30 assets by the close of next year alone, I reckon the groundwork could be laid for spectacular earnings, and consequently dividend growth, further down the line.
Star in space
I also reckon Big Yellow Group (LSE: BYG) should keep churning out exceptional dividends as occupancy rates at its storage sites rise.
The business saw like-for-like revenues edge 5% higher during October-December, with demand for its lock-ups picking up following a difficult start to the quarter. While Big Yellow commented in January that “significant uncertainties remain around the UK’s economic outlook,” the company’s bias towards the South East and London should protect it from the worst of any bumpiness. Indeed, just under half of the firm’s facilities can be found within the M25.
The City certainly expects its rich record of profits growth to keep rolling and has consequently chalked-in dividends of 27.6p per share for the year to March 2017 and 30.1p for fiscal 2018. These figures yield 3.8% and 4.1% respectively, and I reckon the space star is in great shape to keep throwing out market-beating rewards.
