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Dividends of the UK – Stocks with Highest Yields and 10 Years or More of Payouts

Holly LaFon

Holly LaFon

261 followers
GuruFocus this week unveiled its UK and Ireland Premium Membership, the second installment of its global coverage, with Canada made available last month. Subscribers to UK and Ireland stock coverage can screen stocks on the London Stock Exchange (LSE) and Irish Stock Exchange (ISE) with all of the same characteristics they look for in U.S.-based stocks.

The London Stock Exchange lists 2,938 companies, with a total market value of £3.9 trillion. The Irish Stock Exchange lists over 28,000 securities in 44 countries. Trading was particularly brisk at the ISE in 2012, as the ISEQ equity indices saw returns in the range of 16% to 37%, and had its second-highest number of equity trades at 2.4 million.

Investors seeking yield can venture outside the U.S. using the All-in-One Screener to research which of these UK and Irish companies pay the largest dividends that have not ceased payments 10 years or more. The stocks matching these criteria: Banco Santander SA (LSE:BNC), Total SA (LSE:TTA), AstaZeneca PLC (LSE:AZN), BP PLC (LSE:BP) and National Grid PLC (LSE:NG).

Banco Santander SA (LSE:BNC)

The largest bank in Spain, Banco Santander is the company paying the highest dividend on the London Stock Exchange whose payouts have continued for at least 10 years. The bank has an 8.9% yield.

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LSE:BNC data by GuruFocus.com

In 2012, Banco Santander paid a dividend of EUR 0.60 for the third consecutive year. Over the same three years, its basic revenues increased each year to $40.61 billion, and earnings per share declined each year to $0.23 per share in 2012, after the company set aside EUR 4.11 billion to cover its exposure to real estate in Spain.

Banco Santander’s Chairman Emilio Botin commented on the bank’s 2012 year-end financial position: “Profits reached a turning point in 2012. In 2013, with the exceptional write-offs behind us, we should see a marked increase in earnings, based on the group’s recurrent revenues and cost control.”

Botin also confirmed in his annual speech that the bank would continue paying the dividend going forward. “As I announced at last year’s shareholders’ meeting, Banco Santander is going to continue to pay its 3.3 million shareholders EUR 0.60 per share against 2012 results,” he said.

In the stress tests of Spain’s bank supervised by the European Central Bank, the European Commission, the International Monetary Fund and other international agencies in 2012, Banco Santander was found to be the strongest financial institution in the country, with EUR 25.297 billion in capital surplus in the most adverse economic scenario.

Banco Santander’s stock price has declined almost 9% over the past year, and trades for $4.87 per share. It also has a P/E of 31.4 and P/S of 1.04.

Total SA (LSE:TTA)

Total SA has a 6% yield and has paid a dividend of EUR 2.28 annually from 2008 to 2012. Its dividend payout ratio is 42%.

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LSE:TTA data by GuruFocus.com

Total SA is the France-based energy company focused on upstream, refining and chemicals, and market and services aspects of the business. It has a $111.97 billion market cap. In the past year its stock has declined 10% and trades for $49.56 per share on Friday.

Total in 2010 changed its dividend policy to disperse payments quarterly, effective in 2011. In February 2013, the company planned to propose a 3% dividend increase to EUR 2.34 at its annual shareholders meeting in May 2013.

For 2012, Total’s financial results included an 8% year-over-year increase in adjusted net income to EUR 12.4 billion and sales increased to EUR 200 billion from EUR 184.7 billion. Further, its cash flow from operations increased 15% to EUR 22.46 million.

AstaZeneca PLC (LSE:AZN)

AstaZeneca had a dividend yield of 5.8% and payout ratio of 74% in 2011. The company has raised its dividend per share every year this decade.

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AZN data by GuruFocus.com

AstaZeneca is a global biopharmaceutical company focused on prescription drugs for in the areas of cancer, cardiovascular, gastrointestinal, infection, neuroscience and others.

The company’s board aims to pay a dividend cover of 2 times (a 50% payout ratio) before restructuring costs, depending on its view of its earnings prospects over the investment cycle. Another objective is to maintain or increase the dividend every year, though earnings will likely fluctuate as it navigates the loss of product exclusivity and new product launches. Management also prioritizes share repurchases when it has excess cash.

For full-year 2012, AstraZeneca’s revenue declined 15% to $27.97 billion, as it lost exclusivity on several brands and disposed of Astra Tech and Aptium. Core EPS declined 9% to $6.41, including $0.16 proceeds for the sale of Nexium OTC rights, and benefited by $0.37 for two tax-related matters.

Its board declared a second interim dividend of $1.90 per share, for a full-year total dividend of $2.80, another increase from $2.70 per share in 2011.

Share repurchases for 2012 totaled 57.8 million shares for a total of $2.64 billion, though the company suspended its share repurchases program for 2012 on Oct. 1, 2012 and will not repurchase more shares in 2013 in order to invest in the business.

BP PLC (LSE:BP)

Oil and gas company BP PLC in 2012 paid a dividend of 33 cents per share, for $5.3 billion in total, an 11% increase in dollars from 2011. Its payout ratio was 54.6% with a yield of 4.99%. The dividend has gone up and down over the years as the company encountered various challenges, such as the Gulf oil spill.

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BP data by GuruFocus.com

The headlines are that we expect global energy demand to grow rapidly adding around 36% to global consumption by 2030. And nearly all of that increase in demand - over 90% - is coming from emerging economies. Oil, gas and coal will supply 80% of these needs, with gas showing the fastest growth at around 2% per year.

BP’s revenue increased to $388 billion in 2012, from $386.46 billion in 2011, and net income declined to $11.58 billion from $25.7 billion. BP returned to positive free cash flow in 2012, with $7.44 billion compared to negative $4.48 billion in 2011.

To search for more stocks in the United Kingdom and Ireland, become a GuruFocus Global Premium Member. To screen for virtually anything in a stock, try the All-in-One screener.


Rating: 2.5/5 (11 votes)

Comments

vgm
Vgm - 1 year ago
I was a bit puzzled by the theme and examples in this article.

You say "Investors seeking yield can venture outside the U.S. using the All-in-One Screener to research which of these UK and Irish companies pay the largest dividends" and then go on to mention Banco Santander and Total, neither of which is a UK or Irish company! Or did you mean to say companies which trade on the UK or Irish stock exchanges? Then again, SAN and TOT both trade on the NYSE.

And you mention BP as an example of a company which has not ceased dividend payments for at least 10 years. BP halted its dividend during the Gulf spill crisis and reinstated it at a later date.

Vodafone has one of the highest payout ratios (around 7%) on the LSE and it's a British company. Not sure if it's paid the dividend consistently for 10 years.
edyouds
Edyouds - 1 year ago
Yes I think you should be specfic to the market only BP & AZN are the two true UK stocks. Ed
vgm
Vgm - 1 year ago
I wonder if the best utility of this new screen would be to identify high quality, lesser-known UK/Irish companies (smaller caps?) which are not generally on people's radars. BP, AZN, VOD, etc are all too familiar.

Tweedy Browne has several UK-based companies of that kind (GFS, HAS, LSL) in their International and Dividend portfolios. I find quite a bit of stimulation there. Oakmark International too, run by David Herro.

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