Forecasts for FTSE 100 shares have been scaled back of late. But analysts still expect a bumper year for dividends this year.
At the last count, according to investing services company AJ Bell, the consensus suggested a payout from the UK’s top index of £78.7bn.
That’s just ordinary dividends and doesn’t include any specials. Or share buybacks.
And they expect 2024 to come close to the all-time FSTE 100 dividend record set in 2018.
Earnings rises
It comes on the back of a predicted 10% rise in pre-tax profits this year. And by far the biggest chunk should be from the financial sector.
No wonder then that banks and insurance stocks are high on my dividend favourites list.
I wouldn’t buy all these in a new portfolio as I’d want more diversification. But, right now, I think these are the dividend stocks I’ll most likely choose from in 2024.
Stock
Recent
price
1-year
change
5-year
change
Dividend
yield 2023
Dividend
yield 2024
Barclays
150p
-13%
-11%
5.5%
6.4%
Lloyds Banking Group
47.5p
-0.4%
-12%
5.5%
6.0%
Legal & General
245p
-6.3%
+5.5%
8.1%
8.5%
Aviva
431p
-3.5%
-13%
7.4%
7.9%
M&G
218p
+17%
-22%
9.2%
9.5%
British American Tobacco
2,361p
-30%
-14%
10.0%
10.3%
National Grid
1,080p
+5.7%
+27%
5.3%
5.5%
Taylor Wimpey
142p
+32%
+3.9%
6.9%
6.7%
Land Securities Group
708p
+5.5%
-21%
5.9%
6.0%
Glencore
453p
-17%
+57%
8.1%
4.4%
(Sources: Yahoo! Finance, MarketScreener)
Not the biggest
These aren’t the biggest dividend yields. In fact, I’ve left off one particular big hitter, Vodafone. It’s forecast to pay 12%, but there’s a lot I don’t like about Vodafone’s approach to cash and debt.
Glencore might seem a strange choice, with such a low yield for 2024. But estimates vary, and the consensus is for a rise back to around 6% by 2025. It’s a cyclical business, but I see a long-term cash cow.
I also have a few relatively low yields, in the 5% range. But each one is a stock where I see a high chance of long-term growth. And I rate that as more important than a bigger short-term yield.
Finance risk
There’s a fair bit of finance sector risk here, for sure. And with the Bank of England dashing hopes of any quick interest rate cuts, we could still have a rocky time ahead.
What about builders and real estate? Those were almost untouchable for most of 2023, but they’re coming back. And I can only see long-term demand and long-term profits.
So again, I’d be happy to take the clear risk in the short term.
Old favourite
Why have I never bought National Grid shares? Only because I keep seeing something I like better. Still, even with the uncertainty over the future of gas, today’s dividend forecasts could finally make it a buy for me.
And then, British American Tobacco has faced fears for the end of the business for years. But I rate it as the one most likely to proper from new products. And, again, I see lots of future cash.
The post These are my top 10 FTSE 100 shares for dividends in 2024 appeared first on The Motley Fool UK.
However, don’t buy any shares just yet
Because my colleague Mark Rogers – The Motley Fool UK’s Director of Investing – has released this special report.
It’s called ‘5 Stocks for Trying to Build Wealth After 50’.
And it’s yours, free.
Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.
And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.
That’s why now could be an ideal time to secure this valuable investment research.
Mark’s ‘Foolish’ analysts have scoured the markets low and high.
This special report reveals 5 of his favourite long-term ‘Buys’.
Please, don’t make any big decisions before seeing them.
Secure your FREE copy
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#ffffff”, ‘color’, ‘#FFFFFF’);
})()
More reading
Could buying this beaten-down FTSE 250 stock be like investing in Rolls-Royce a year ago?
Will the Lloyds share price reach 50p before January?
10% dividend yield! Is British American Tobacco one of the greatest FTSE 100 bargains?
12% yield! Yet I wouldn’t touch Vodafone shares with a 10-foot pole until this happens
Putting £500 aside each month? Here’s how I’d aim for £90,400 in passive income
Alan Oscroft has positions in Aviva Plc and Lloyds Banking Group Plc. The Motley Fool UK has recommended Aj Bell Plc, Barclays Plc, British American Tobacco P.l.c., Land Securities Group Plc, Lloyds Banking Group Plc, M&g Plc, and Vodafone Group Public. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
