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Dividend shares are an effective way to construct long-term wealth and these three all have one particular attribute. So what makes them so particular?
Solely a dozen FTSE 100 corporations have elevated their dividends for not less than 25 consecutive years, and generally longer. It’s a massively spectacular achievement, because it means producing the money to fund shareholder payouts by thick and skinny, decade after decade. These three actually jumped out at me.
Halma is an revenue hero
Halma (LSE: HLMA) is the primary. Many traders wouldn’t even spot it as a dividend inventory as a result of the trailing yield is simply 0.65%. That low yield hides its actual energy. The share worth is up an unimaginable 33% during the last 12 months and 70% throughout two years, suppressing the headline yield.
The Halma share worth remains to be climbing, regardless of as we speak’s uneven markets. First-half outcomes revealed on 20 November confirmed revenues up 15.2% to £1.23bn and margins widening by 210 foundation factors. The board additionally lifted the interim payout by 7% to 9.63p. It’s elevated dividends for 45 straight years, compounding at 6.9% during the last 15.
Nothing is risk-free. Halma earns giant sums abroad, so foreign money actions can have an effect on outcomes. The value-to-earnings ratio now stands at 37.6, effectively above the FTSE 100 common of round 18. So it’s not low-cost. Traders would possibly nonetheless think about shopping for on a inventory market dip, assuming Halma dips too. It might not.
DCC rewards shareholders
Advertising and marketing and help companies group DCC (LSE: DCC) has lifted its dividend for 31 consecutive years. It’s in the midst of a serious strategic shift as CEO Donal Murphy works to show it into a worldwide chief in power distribution, however this may very well be a chance for long-term traders.
DCC shares have disillusioned recently, falling 13% in a 12 months, but the valuation seems to be interesting consequently with a P/E of simply 12. The trailing yield sits at 4.22%, and the dividend has grown at a median annual price of 8.97% throughout the final decade.
On 17 November, DCC stated it might return as much as £600m to shareholders through a young supply funded by the £1bn sale of its healthcare arm. There are dangers in any transition, however for long-term traders, this may very well be a second to take one other look.
Sage Group seems to be sturdy
My third long-term dividend celebrity is Sage Group (LSE: SGE). The software program supplier’s shares are up 80% over 5 years however have slipped 16% within the final 12 months. I’ve watched this one for some time. The valuation was at all times too excessive for me at roughly 33 instances earnings, however as we speak it’s nearer 26 instances. Nonetheless dear, however higher worth than earlier than. Sage has earned its premium worth.
It has elevated dividends yearly for a spell-binding 37 years. So don’t be fooled by that modest trailing yield of simply 2%. Over the past 15 years, payouts have compounded at 7.11% a 12 months. Dangers embrace a slowing world financial system and the menace that AI might undercut a few of its companies.
Nothing lasts perpetually, however these three corporations present how decided, well-managed companies can reward traders, with share worth progress and dividend will increase operating again a long time. Fingers crossed it continues. And there are many different nice FTSE 100 dividend shares on the index too.
