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As an older investor, my household portfolio is safer than once I was a youthful man. Immediately, it consists of many dividend shares to generate excessive ranges of passive earnings.
Over time, my spouse and I intend to completely change our earnings with unearned earnings, largely from two important sources. First, state, firm and private pensions. Second, from a balanced, diversified portfolio of dividend shares.
I like FTSE 100 dividends
However one drawback with future dividends is that they’re not assured, so will be lower or cancelled with out warning. One other large drawback with money dividends is that almost all corporations listed on the London inventory market don’t pay them.
In some instances, loss-making corporations don’t have the funds to pay out money to their shareholders. Different companies desire to reinvest their income into boosting future progress. Both means, these companies don’t present my household with the passive earnings we search.
Then once more, virtually all members of the UK’s elite FTSE 100 index do pay dividends to their house owners. That’s why the Footsie is my glad looking floor for juicy dividend shares.
5 dividend Goliaths
For instance, the 5 corporations listed within the desk under all pay out large money sums to their shareholders. Right here they’re, sorted from largest to smallest by market worth:
| Firm | Sector | Market worth | Share worth | Dividend yield | One-year change* | 5-year change* | Yearly dividend |
| Shell | Oil & fuel | £161.1bn | 2,494p | 4.1% | 0.5% | 6.5% | £6.6bn |
| AstraZeneca | Healthcare | £158.4bn | 10,220p | 2.2% | -8.8% | 61.8% | £3.5bn |
| HSBC Holdings | Banking | £114.1bn | 597.2p | 8.0% | -5.2% | -2.9% | £9.2bn |
| Unilever | Client items | £100.0bn | 4,002p | 3.7% | -4.6% | 0.5% | £3.7bn |
| BP | Oil & fuel | £79.3bn | 466.1p | 4.8% | -14.8% | -13.0% | £3.8bn |
For the file, these are the Footsie’s 5 largest companies. The most important is value over £160bn, whereas the smallest is value virtually half that. In different phrases, these are the large beasts of the UK inventory market.
Because of their measurement, dividend payouts from these 5 teams are enormous, starting from £3.5bn a yr to £9.2bn a yr. Throughout all 5 companies, the entire yearly dividend involves a whopping £26.8bn.
Whole FTSE 100 dividend earnings for 2024 is forecast to be £83.7bn. Due to this fact, these 5 giants might pay out virtually a 3rd (32%) of whole Footsie dividends this calendar yr. Wow.
I like this inventory
For the file, my spouse and I purchased one in every of these shares six months in the past for its impeccable historical past of paying out passive earnings. The corporate in query is shopper items colossus Unilever (LSE: ULVR).
Sadly, our timing was hardly supreme once we purchased into this £100bn Anglo-Dutch behemoth final August. We paid 4,122.2p a share, however the inventory then dived, hitting a 52-week low of three,671.5p on 23 January.
The mega-cap inventory has since rebounded strongly, closing at 4,002p on Friday (23 February). The shares now ship a dividend yield of three.7% a yr, slightly below the FTSE 100’s yearly money yield of 4%. However Unilever has a protracted file of steadily lifting its dividends.
Granted, the enterprise had a troublesome 2022-23 attributable to falling gross sales progress and margin shrinkage. And progress this yr may very well be below-trend. Nonetheless, I’m hopeful of upper revenues, income and money flows in 2024-25. Therefore, we intend to hold on to our holding for a few years for its passive earnings!
