3 FTSE Dividends Lifted This Week

Published in Investing on 1 August 2012

Housebuilding boost from Taylor Wimpey (LSE: TW) and a nice raise from Rexam (LSE: REX).

Hovering around the 5,678 mark, the FTSE 100 (UKX) is on a trailing dividend yield of around 3.8%, which isn't bad at all, especially with so much growth opportunity in some depressed sectors, too.

It really does make sense to go for high-yielding shares in times like these, and today we take a look at three companies from the various FTSE indices that have lifted their dividends this week...

Taylor Wimpey

Housebuilder Taylor Wimpey (LSE: TW) reinstated its dividends today as it released interim results. After three years of no payouts while the sector was in a slump, we now have a first-half dividend of 0.19p per share. That's not much yet, but it's nice to see a dividend coming back, especially as the rest of the results were looking good.

Average selling price for the period rose 4.6% to £176,000, and the firm's operating margin strengthened to 11.4%, from 2011's first-half margin of 8.4%, as operating profit was boosted by 50% to £100.9m. The news was enough to raise the share price 2.1% to 45p.

Rexam

Rexam (LSE: REX), the packaging company, lifted its interim dividend by 6% to 5p per share as it reported a 3% growth in sales to £2.16bn, with operating profit up 2% to £253m. Underlying earnings per share came in at 17.1p for a 2% rise, so the dividend is very well covered.

Despite that, the shares fell 11.6p (2.7%) to 423p on the announcement. Maybe investors had been expecting more, after the shares had already gained more than 20% over the past 12 months. Forecasts put the shares on a price-to-earnings (P/E) ratio of under 12, falling to 10 for 2013, and dividend forecasts suggest yields of 3.6% and 3.9%, so the shares are not looking overvalued.

Weir

Weir Group (LSE: WEIR), the mining, power oil and gas engineer, reported great interims on Tuesday, and lifted its dividend by a very nice 11% to 8p per share. With first-half earnings per share coming in at 69.9p per share, that's very well covered and the full-year forecast of a 2.2% yield should be safe.

That's not one of the best yields on the market by a long way, but Weir isn't really an income share, and investors who follow the City's consensus recommendation to buy the shares will be doing so in the hope of a share price recovery -- at 1,677p, the price is already back up 19% over the June low of 1,397p.

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> Alan does not own any shares mentioned in this article.

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Comments

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Luniversal 01 Aug 2012 , 1:59pm

"Housebuilder Taylor Wimpey (LSE: RW) reinstated its dividends today as it released interim results. After three years of no payouts while the sector was in a slump, we now have a first-half dividend of 0.19p per share."

TW. resumed payments in May with a 0.38p a share final.

TMFBoing 01 Aug 2012 , 2:28pm

Sorry that came out wrong - I meant to say it didn't pay anything at the interim stage last year.

Foolish best,
Alan
TMFBoing

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