This article looks at the top 10 FTSE stocks that pay dividends. FTSE stands for Financial Times Stock Exchange group. It is a financial index, similar to Standard and Poor’s. It rates businesses that are listed on the London Stock Exchange. The companies are ranked by their market capitalization, but that might not be the only criteria you want to use when selecting investment stocks.
Other considerations include:
- If dividends are paid. If so, when and at what rate.
- The type of business in which the company is engaged. Where you place your investment money is one way of voting for or supporting a particular type of business.
- Whether the stock is rising or falling.
- The initial purchase price of the stock.
- The price to earnings or PE, which helps predict profits over time.
Stocks and Dividends
Not all companies pay dividends. Some are set up in a way that will allow you to realise value from them only by selling them. These can be a little bit tricky for novice investors to handle, and can be more work. If you want to realise a steady income from an investment, you want stocks that pays dividends.
Dividends are not always paid to you directly, especially if the company is new or if your account with them has not yet matured. Sometimes the dividends are reinvested. This will increase the value of your holdings, but it will not directly produce income for you or your business. In some cases, you will be able to select the way you want your dividends to be handled.
Bonds are another way to invest in a company and to earn dividends. Unlike stocks that pay a quarterly or annual amount, bonds are money you lend to the company for a specified period of time. While the company is using your money, it is earning interest. If you wait until the end of the agreed-upon time, your bond is said to have matured, and you receive the original value of the bond, plus the interest that it has accrued.
Buy Low, Sell High
The ideal way to accumulate money on the stock market is encapsulated in the old saw, “Buy low, sell high.” The tricky part is knowing when to sell your stock that is increasing in value, or whether to purchase stock that is falling in price. That judgment call is where good stockbrokers show their worth, and where exercising a thing called “due diligence” comes in.
- The FTSE lists top companies from the London Stock Exchange. The lists can be the top five, the top ten, the top 100 or the top 350.
- Rankings are usually by market capitalization.
- To realize periodic income from stocks, you need one that pays dividends
- “Top” FTSE lists can vary from reviewer to reviewer, and they can change quickly.
- Top FTSE lists usually consist of Blue-Chip stocks.
- Below are ten top companies, their characteristics and their rate of return as of September 10, 2019.
Ten Top FTSE Stocks that Pay Dividends:
iShares PLC is a funds management company, handling a variety of International companies around the world. It is managed by Blackrock, an American Global Investment Company. It is the largest issuer of EFTs in the United States. It pays out dividends quarterly, and currently has a yield of 4.37% (as of 9/9/2019). Its highest paying sector is non-renewable energy, with the lowest being industrial support services.
- Avg. Volume: 4,478,603
- Market Cap: £1.54 billion
- Price to Earnings Ratio: No Data
- 2018 Earnings Per Share: 10.80p
- Dividend Yield: 4.37%
- Price: Great Britain Pound Sterling: 1,414.00p
Vanguard Funds provides a broad range of investing opportunities. Options include IRAs, college savings funds, 401Ks, variable annuities, and more. Vanguard functions as a sort of one-stop-shopping facility for investment options. It pays dividends quarterly, with a yield of around 3.10%, although it could fluctuate with the market. It focuses primarily on UK equities, but does have some international diversification. This is a great safe stock that pays dividends.
- Avg. Volume: 244,329
- Market Cap: 115.3 B
- Price to Earnings Ratio: Variable by share type
- 2018 Earnings Per Share: Variable by share type
- Dividend Yield: 4.01%
- Price: Great Britain Pound Sterling: £32.31
Glencore is a natural resource company that focuses on ferrous and non-ferrous metals. They also produce and market thermal coal, as part of their marketing of physical commodities. Because of the nature of their products, they also take into consideration safety, health, environment and community, and human rights. They also take an interest in climate change and sustainability of resources. Their annual yield is estimated at 1.85%.
Their website lists a variety of reports ranging from sustainability to transaction archives. Press releases are also available.
- Avg. Volume: 30,605,760
- Market Cap: £32.86 bn
- Price to Earnings Ratio: 9.32
- 2018 Earnings Per Share: .10
- Dividend Yield: 6.42%
- Price: Great Britain Pound Sterling: 243.45p
London Metric is a property company. It purchases, improves and leases property of all sorts ranging from retail parks to the Amazon.com mega center. It maintains a diversified long-range income portfolio, consistently delivering a steady income. Dividends are paid out annually. Flexible, long-range investments typically mature in four years.
It maintains a reliable 1.46% return, with slight variation. London Metric not long ago acquired A&J Mucklow, a bold move that could substantially expand its purview, and increase its profitability. Like many British companies in 2019, this land/property company could be heavily affected by Brexit.
- Avg. Volume: 4,034,344
- Market Cap: £1.75 bn
- Price to Earnings Ratio: 23.68
- 2018 Earnings Per Share: .10%
- Dividend Yield: 3.94%
- Price: Great Britain Pound Sterling: 208.00 sterling pence
- Scottish Mortgage Investment Trust (Dividends Paid Annually)
The Scottish Mortgage Investment Trust looks for promising businesses in which to invest globally. It is managed by Baillie Gifford & Co Limited, which is based in Edinburgh.
It was founded in 1909 primarily to lend money to rubber tree planters and similar establishments. But by 1913 it had begun to expand its interests. Having weathered a variety of financial crises, including the Great Depression, the Scottish Mortgage Investment trust celebrated its centennial in 2009.
It now invests globally, and focuses on long-term investments. Nearly half its investors reside in the United States, while approximately 1/5 are in China and 1/5 in the Eurozone. The company’s diversified holdings give it a stable position from which to weather political and economic changes. The yearly dividend currently is at 1.25%.
- Avg. Volume:
- Market Cap: £7.73 billion
- Price to Earnings Ratio: 4.7
- 2018 Earnings Per Share: 3.13 pence
- Dividend Yield: 0.60%
- Price: Great Britain Pound Sterling: 519.50 pence
GlaxoSmithKline is a pharmaceutical company. Originally, it was a general trading company, but became Glaxo Welcome by powdering and marketing surplus milk as food for babies. As it expanded its offerings, it became a pharmaceutical producer.
In 2000, Glaxo Welcome merged with SmithKline Beecham. By 2015, it rated as the sixth-largest pharmaceutical company in the world, in spite of having plead guilty in 2012 to promotion of drugs for unapproved use, not having reported safety data, and giving kickbacks to physicians.
Currently (2019) it is ranked as number 12 in FTSE companies, according to Hargreaves Lansdown. This stock pays Dividends quarterly, and its return is 1.12%.
- Avg. Volume: 8,145,929
- Market Cap: £ 82.7 Billion
- Price to Earnings Ratio: 14.37
- 2018 Earnings Per Share: 80.00 pence
- Dividend Yield: 4.76%
- Price: Great Britain Pound Sterling: 1674.00 pence
Centamin is a mineral exploration and development company. It currently operates the Sukari Mines in Egypt in cooperation with the Egyptian government. Centamin continues to look for other mining locations to develop.
It is listed with both the London and Toronto stock markets, and has offices in Australia, the UK and Egypt. Even though Egypt was once a well-known supplier of gold, Sukari is the primary modern gold mine in Egypt. Interestingly, it is located on a site where gold was mined in ancient times. Modern methods have dramatically increased yields from the location.
The modern installation has been in operation since 1970. Dividends are paid to shareholders annually. As of September 6, 2019, returns on shares were at 1.15%.
- Avg. Volume: 8,365,202
- Market Cap: £1.61 bn
- Price to Earnings Ratio: 27.21
- 2018 Earnings Per Share: £ .06
- Dividend Yield: 3.05%
- Price: Great Britain Pound Sterling: 139.30p
AstraZeneca is a biopharmaceutical company that focuses on research and development of cures for major illnesses. Their areas of focus are metabolic disease, cardiovascular, oncology, and respiratory. They research and develop medicines, which are then marketed and sold.
For individuals who take some AstraZeneca products, the company might help with making the medicines more affordable. The assistance program is open to those who have suffered a catastrophic hardship, Americans who receive Medicare part D, and others who are in a similar situation. AstraZeneca introduced a low-key but cogent commercial for the 2019 Super Bowl. Entitled “Envy” it highlights an unpleasant side effect of taking too many pain pills: Constipation.
Tastefully done, it points up the extent of the opioid crisis and its far-reaching effects. Dividends are paid annually, and were at .89% return as of September 2019.
- Avg. Volume: 2,387,392
- Market Cap: £ 95.2 Billion
- Price to Earnings Ratio: 25.88
- 2018 Earnings Per Share: 2.80
- Dividend Yield: 3.07%
- Price: Great Britain Pound Sterling: 6,981.00p
Euromoney is a business to business investment company. Their primary headquarters is in the city of London, but they maintain major offices in Hong Kong, Singapore, and Shanghai, as well as satellite offices.
They deal with pricing, data and market intelligence, as well as asset management, banking and finance. Their business strategy relies heavily on subscription-based products, a method which drives customer loyalty and repeat business. Their primary business activity is information and information management. They support a variety of UK and European charities, and encourage employee participation.
They are working toward what they term a B2B 3.0 business model. They pay out dividends annually. Returns are at .43% as of September 2019.
Fresnillo plc is a holding company, consisting of several subsidiaries which are engaged in mining and improving the quality of the metal through processes known as beneficiation. It variously deals with mining silver, gold from six operating mines.
They have two projects under development. Core operations for the company are primarily in Mexico. Dividends are paid to shareholders on an annual basis, at a current rate of .53%.
- Avg. Volume: 1,974,974
- Market Cap: £5.13 bn
- Price to Earnings Ratio: 19.26
- 2018 Earnings Per Share: $.27
- Dividend Yield: 3.06%
- Price: Great Britain Pound Sterling: 698.60p
Voting with Your Investment
If you spend a lot of time listening to the news, it might seem as if the whole world is in chaos. Experts frequently debate whether the chaotic events are increasing or whether communication has simply become so much faster that we hear about things much more quickly.
Regardless of which is the correct view, paying attention to current events can be one way to help determine where you wish to place your investment money. For example, if you have a loved one who is suffering from cancer or you have lost someone to cancer or some other medical condition, it might be satisfying to invest in a research pharmaceutical company and various other stocks that pay dividends.
You might check to see what kind of success that company has had in finding effective medicines. If you strongly believe that humans are affecting the environment, you might want to invest in alternative energy or conservation projects.
Long-Term and Short-Term Investments
As you probably already know, a good investment portfolio includes both long-term and short-term investments. Long-term investments are ideal for young people who are planning for their future retirement. In general investing in stocks that pay dividends is seen as a longer terms goal.
Because they are not likely to need those investments right away, those funds can be placed in earning situations that will not pay off for several years. On the other hand, if you are hoping to build your immediate cash worth, you might want to put your savings into a much shorter-term investment situation that might pay off in six months to perhaps five years.
The latter is more useful for saving up a down payment on a home or a vehicle than an investment that will not mature for ten years or more.
Your Investment Goals
The top FTSE investment companies for you not only rely on the statistics displayed by the company but also upon your investment goals. You’ve probably read articles about the debate between whether to save money or to pay down debt.
You might have also heard that if you plan to go to a casino or similar venue then you should take only money that you can afford to lose, and not to take your rent or grocery money. While FTSE companies should not be quite so risky as that, the money you invest in stocks or bonds should be cash that you do not immediately need to take care of housing, transportation, food or high-interest debt.
Even though you can be fairly assured of a good return on blue-chip stocks or even common stock from a stable company, it takes time for an investment to grow. Think of it as the difference between being able to harvest lettuce (a garden crop that takes less than six weeks to grow) or being able to pick apples from a tree (trees take a minimum of five years to grow before bearing fruit.)
If you need a quick harvest from a patch of ground, you will choose the lettuce. If you do not need an immediate return, you can plant an apple tree and wait a few years for the first crop. Or to put it another way, you can be certain of a return from most established companies, but the money you invest will not be available for immediate needs. Indeed, looking at stocks that pay dividends tends to be for a longer time frame.
Exercising Due Diligence
With those thoughts in mind, just as a gardener might carefully select a fruit or nut tree keeping in mind that it will take a while before he or she can get a return on the cost of the seedling, the time to plant it, and the time to care for it, you will want to be very careful in selecting your investments. The process of examining a company, reading reviews about it, perhaps even checking the news to see if it has made any recent headlines (good or bad) is called due diligence.
A list, such as the one above, is a good place to begin looking at stocks when you are thinking of investing. The ten top FTSE that pay dividends, and they are listed in descending order, with the company that gives the highest return at the top of the list.
Diversification in stocks that pay dividends is still important
There are a variety of companies in this list. It includes money management, mining, non-renewable resources, pharmaceuticals, research and more. Each has its positive and negative aspects. For example, mining companies gather precious metals that can be used in making ornaments or in manufacturing electronic equipment, but can create environmental concerns.
Pharmaceuticals have come under fire as part of the so-called opioid crisis, but such companies often have research projects that truly do save lives. Some companies do not deal with individuals at all, but are strictly business to business. Before you decide on an investment option, take the time to learn all you can about the company in question.
No list of investment companies is definitive because the market can change rapidly. Therefore, a list such as this one is a good place to begin, but readers should be aware that even as this paragraph is being typed, the financial market is changing. Your own needs and perspectives can change, as well. For example, your investment goals as a single, upwardly mobile, businessperson might change drastically if you discover the love of your life and the two of you begin a family.
Or you might be at the other end of the spectrum, and retirement could change your financial needs. Not only should your investments tick the right boxes as a reliable company that meets your personal philosophy, but they should also fit your personal financial needs.
A Short List as a Place to Begin
Ten is really a very short list of top FTSE stocks that pay dividends. While some might remain at or near the top for weeks, it is a very competitive position.
These select ten, however, will give you a starting place for considering how you wish to invest your nest egg or create the hope for a better tomorrow. Again, your goals, your lifestyle and your personal commitments should be a part of your decision, as well as selecting companies that are stable and likely to be around for many years to come.
With careful investment selections, you can essentially cast your “vote” for the companies that not only seem like a good risk, but also fit your idea of the kind of world you wish to support. Regardless of your vision of the future, your dollars do count toward nudging businesses in a proactive future.
Whether you are backing a company that makes small, personal starter loans to individual entrepreneurs, a company that is devoted to sound environmental practices, one that provides millions of jobs to an area, or one that is helping humankind take that giant step into space, your selection could be the penny that tips the scale in the direction you desire.
With this in mind, investing moves beyond creating a sound financial footing for you and your family, and reaches into the realm of creating a better future for families everywhere.
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- Market information: The Motley Fool, The Economist, The Financial Times, Zero Hedge
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