In recent days I have analysed a cluster of FTSE 100 dividend shares that could make you a fortune in the coming decades. With there being plenty more top-tier income stocks to choose from I’ve decided to take a look at some more of my favourites.
Housing heroes
I’ve long been a champion of Britain’s quoted homebuilders like Persimmon, Taylor Wimpey and Barratt Developments. Impressed by their robustness in the face of declining homebuyer appetite I’m tempted to buy some more, in fact, as the country’s inadequate housing stock has kept demand for new-build homes driving higher.
To demonstrate the scale of the problem, James Prestwich, head of policy at the National Housing Federation, recently estimated that around 340,000 new homes per annum will need to be built over the next 15 years to solve the crisis.
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Last autumn the chancellor Philip Hammond vowed to boost UK house-building to the tune of £44bn to help create 300,000 new homes a year by the mid-2020s. But this number falls short of industry estimates, clearly. And signs are already emerging that the government is failing in its efforts to reach this target due to the huge amounts of red tape involved.
So conditions look ripe for profits at the house-builders to keep rising for some time yet, pushing dividends higher in the process. The three companies I mentioned at the top of the piece all offer yields north of 8% for their current fiscal periods, and I’m certain that shareholder rewards should remain on the generous side for many years to come.
With these housing stars all carrying forward P/E ratios below the bargain-basement threshold of 10 times, I reckon they are far too good to pass up today.
Emerging market mammoth
In a recent article I lauded the exceptional pricing power of household goods manufacturers like Reckitt Benckiser Group thanks to their broad stable of much-loved consumer labels.
This is just one reason I’m expecting these businesses to remain lucrative investments in the decades ahead. While I made reference to their broad geographic footprints too, I didn’t go into detail over their expanding presence in emerging regions, territories where booming wealth and population levels promise plenty of revenues opportunities.
Indeed, a recent report by management consultants Boston Consulting Group illustrated the growing spending power of consumers in emerging nations when it estimated that total spending from such regions will reach a staggering $8trn within the next five years. Reckitt Benckiser highlighted the brilliant profits potential of its own far-flung territories when it announced that like-for-like sales in developing markets for its Health and Hygiene divisions rose 6% and 10% respectively in the April-June quarter.
The Nurofen maker’s slightly-toppy forward P/E multiple of 21 times is a small price to pay for its bright growth story, in my opinion. What’s more, while a corresponding dividend yield of 2.4% may not be the biggest, I believe that the Footsie firm’s exceptional defensive characteristics still makes it a hot income selection thanks to the likelihood of strong and sustained dividend expansion.
