This isa tough time for stock markets generally but these threeFTSE 100 dividend favourites have nevertheless put in a solid performance this week.
National Grid
Wires, pipes and cables operator National Grid (LSE: NG) has long been my preferred utility play and this weeks full-year results reminded me why. Although the market gave acoolresponse to a 6% rise in adjusted operating profit to 4.1bn and the 10% rise in adjusted earnings per share of 63.5p, itwas enough to satisfy my simple needs. As was the 1.1% hike in the recommended full-year dividend to 43.34p. That leaves this stockyielding 4.4%, covered a healthy 1.4 times, almost nine times the base rate.
National Gridis about as safe a play as you can get in the current market, given the heavily regulated nature of its business, and the stock has delivered fizzycapital growth as well, rising 55% in the last five years. Its success has even drawn fat cat accusations from Energyhelpline, which has slammed its record high profits of 2.9bn andUK margins of 37%, and called for Ofgem to enforce an emergency 25% price cut.Even success has its dangers.
Royal Mail
Markets were more downbeat about postal services firmRoyal Mail(LSE: RMG), which posted a 33% drop in full-year profits to 267mthis week. Again, markets were harsh, given that revenues before transformation costs actually rose 5% to 742m. Transformation costs were higher than normal due to the groupscost avoidance and efficiency programme.
As chief executive Moya Greenepointed out, this wasa resilient performance in challenging markets, with group revenue up 1%. There are further challenges ahead, with key parcelrevenues rising just 1% in a competitive market, while the inexorable decline in letter volumes showed itself in a 3% annual drop.
These challenges are reflected in avaluation of 11.8 times earnings, while a yield of 4.5% still gives investors a reason to buy and hold. Royal Mail may be oneto consider in the next stock market dip.
Vodafone Group
Telecomsoperator Vodafone Group (LSE: VOD) hasnt delivered much in the way of share price growth latelybut at least the dividend still presses the right buttons, currentlyyielding5.02%. This weeks final results showed full-year organic service revenues rising a steady 1.5%, even if currency headwinds converted that to a 3.5% loss.EBITDA roseby an underlying 2.7% to 11.6bn, with margins improving slightly to 28.3%. Perhaps the biggest treatwas the2% increase in the full-year dividend to 11.45p.
Im glad to see the back of VodafonescostlyProject Spring overhaul, with capex falling 6.5% to 8.6bn, and pleased to see it generate 1bn of free cash flow. The eurozone remains a drag, withsky-high youth unemployment hitting revenues, but at least India and Turkey offer faster growth prospects.
Vodafoneis all about the dividend an, some may be worried about todays cover of just 0.4, which is starting to look shockingly thin. Yet forecast EPS growth of 18% in the year to next March and 29% in the year to follow, should soothe some of their fears.
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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
