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There are 4 FTSE 100 shares presently providing a yield in extra of 8%. Remembering that dividends are by no means assured, right here’s a fast have a look at every.
| Inventory | Dividend – final 12 months (pence) | Share worth (pence) | Yield (%) |
|---|---|---|---|
| WPP | 39.40 | 416 | 9.5 |
| Taylor Wimpey | 9.46 | 109 | 8.7 |
| Authorized & Basic | 21.36 | 254 | 8.4 |
| Phoenix Group Holdings | 54.00 | 650 | 8.3 |
Troubled occasions
On condition that it not too long ago issued a revenue warning, I believe WPP (LSE:WPP) is the most definitely to chop its dividend. International macroeconomic uncertainty is inflicting many corporations to cut back their promoting and advertising budgets. The group’s high and backside traces are struggling in consequence. Its margin can be coming underneath stress.
Of elementary concern, it’s going through a menace from synthetic intelligence (AI) functions which can be serving to companies carry the artistic course of in-house.
However regardless of its woes, the group’s nonetheless anticipating to report £400m-£425m of working revenue for the primary half of 2025. It additionally retains a powerful blue-chip shopper base and has gained quite a few awards.
Nonetheless, I don’t wish to make investments. There’s an excessive amount of uncertainty surrounding the inventory – and the business – for my liking.
Attainable inexperienced shoots
Taylor Wimpey‘s (LSE:TW.) paid a dividend of 8.58p-9.46p for the final 4 years making it some of the beneficiant round. Impressively, it’s managed to do that towards a backdrop of a struggling housing market. Rising rates of interest and a post-pandemic squeeze on disposable incomes has dented confidence.
However there are indicators that issues is likely to be choosing up. Excluding joint ventures, it expects to promote 10,400-10,800 properties in 2025. Final 12 months, it accomplished 9,972.
Nonetheless, the housing market stays fragile and will hunch once more if rates of interest don’t fall as anticipated. And it could possibly be a number of years (if ever) earlier than the group’s in a position to match its pre-Covid margin.
However with a powerful stability sheet, numerous plots on which to construct and a wholesome order guide (£2.26bn), Taylor Wimpey could possibly be one to contemplate.
A historical past of dividend development
Aside from 2020 (when it saved it unchanged), Authorized & Basic (LSE:LGEN) has elevated its dividend yearly because the monetary crash of 2009. And it’s pledged to boost it by 2% each year from 2025-2027.
In 2024, it reported a 6% year-on-year enhance in core working earnings per share. Even so, I consider its shares are attractively priced at round 12.6 occasions historic revenue.
Nonetheless, the group has over £500bn of investments on its stability sheet. A worldwide slowdown might have an effect on funding earnings and result in a minimize in its dividend. Competitors might additionally influence earnings.
However the group’s sturdy stability sheet, spectacular pipeline of recent enterprise and lengthy observe document of dividend development might make it one other inventory to contemplate.
Born in 1782
Phoenix Group Holdings (LSE:PHNX) operates in the identical sector as Authorized & Basic and faces related challenges from each well-established manufacturers and newcomers. However its market-cap is lower than half that of its bigger rival, which implies it has much less monetary firepower to face up to a downturn. And since July 2020, its share worth has been flat.
Nonetheless, its 2024 outcomes have been spectacular. In comparison with 2023, adjusted working revenue was up 31%, working money technology was 22% larger and belongings underneath administration elevated 11%.
The group owns some well-known manufacturers, together with Commonplace Life and SunLife, and has elevated its dividend for the previous six years. For these causes, I believe it’s a inventory that buyers might take into consideration including to their long-term portfolios.
