Today I am looking at the investment appeal of two FTSE-quoted dividend darlings.
Bank on bumper returns
As a result of earnings fluctuations, heavy restructuring, and the need to build its capital base, shareholder rewards over at Barclays (LSE: BARC) have disappointed the market in recent years. Indeed, the bank has kept the dividend locked at 6.5p per share since 2012.
However, with the improving British economy driving revenues at its core businesses, and cost-cutting and asset sales still ticking along Barclays retail operations in Italy were offloaded to CheBanca! this month the dividend outlook at the London firm is steadily improving.
Indeed, the number crunchers expect Barclays to put aside the bottom-lime bumpiness of recent years, and stellar growth of 24% is pencilled in for this year. A further 21% advance is forecast for 2016.
As a result Barclays is predicted to putits progressive dividend policy back into gear, and a 6.6p per share reward is currently forecastfor 2015, yielding a handy 2.9%. And dividend growth is really expected to get back into gear from next year, with an estimated 8.3p dividend yielding a decent 3.6%.
And there are plenty of reasons to be bullish over Barclays long-term dividend prospects. The banks Transformprogranmme aimed atstabilising the business,putting performance on the right track and becoming, in their words, the Go-To bank still has plenty left in the tank, while revenues at its Barclaycard division keep on surging.
And Barclays hefty presence in Africa gives it solid exposure to emerging market consumers, a region with relatively-low product penetration. I believe the banks exceptional outlook at home and abroad should make it a lucrative dividend star in the years ahead.
A hulking housebuilding star
Stunning dividend expansion is nothing new over at housebuilder Bellway (LSE: BWAY), the business having lifted payouts at a stunning compound annual growth rate of 57.5%overthe past five years.
Bellways investors have tearaway bottom-line growth to thank for this stunning performance, with earnings having surged by incredible double-digit percentages throughout this period. And if todays trading update is anything to go by, I believe the construction giant should continue delivering knockout shareholder rewards.
Bellway announced that it has made an excellent start to the current financial year, supported by strong market conditions and an increase in the number of units in production. The company expects completions to rise 10% in the year to July 2017, to a record 7,752 units, while average selling prices are also anticipated to rise by around a tenth.
According to City forecasts, Bellway is set to deliver a stonking 17% earnings advance in fiscal 2016. As a result, last years dividend of 77p per share is predicted to leap to 87.8p in the current period, although I expect todays positive result to prompt a flurry of upgrades. The current projection yields a chunky 3.4%.
And as Britains housing crunch intensifies, I expect shareholder payments to continue striding comfortably higher well into the future.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
