After reading Monday, FTSE 100 The index has been re-established. On Thursday, it closed at 7,078.35 points, up 240 points (+ 3.6%) from Monday’s low. But the index has risen only 5.6% in six months, so it has bounced back since last October. Yet Futsy 22 has come a long way since March 23, 2020, when it crashed below 50,000. Today, I believe Futsy is cheap, both in historical terms and in contrast to other major markets. In fact, I see deep value, especially among Futsi mega-caps (the largest company listed in London). There are five cheap shares I own here but today I will buy them for a shiny dividend yield.
Five fat FTSE 100 dividends
Dividends – regular cash distributions paid to shareholders – play an important role in the total return of FTSE 100. Indeed, it is estimated that about half of the index’s long-term earnings came from re-employment of this payment. Currently, the index forecasts cash yields for 2021 to be 3.8% – and this could rise next year. Also, only a handful of futsal companies do not pay dividends to shareholders.
Today, I screened 101 stocks (a dual-listing) of the FTSE 100 looking for tough companies offering deadly cash yields. After compressing my results on 10 stocks, I chose five cheaper stocks that yield bumper dividends at the moment. Here are my five dividend dynamos, sorted by highest to lowest yield:
|Institution||Sector||Market price||Production dividends|
|Rio Tinto||Mining||.1 80.1bn||10.1%|
|Imperial brand||Tobacco||.7 14.7 billion||8.9%|
|Legal and general||Financial||.9 16.9bn||6.3%|
Every firm does that
Each of these five dividend powerhouses owns a big business. The youngest, asset manager M&G, Its market value is above 5bn. Largest, global mining giant Rio Tinto, Worth a whopping .1 80.1bn – an FTSE 100 heavyweight. Two of the five are miners (Rio and Evraj, Two are financial institutions (M&G and Legal and general), When Imperial brand A leading cigarette manufacturer. But what really attracts me to these five is the yield of their market-beating dividends.
Evraj, a global steelmaker and miner with major operations in Russia, Ukraine and North America, currently offers the highest dividend yields on the FTSE 100. 13.1% per year, this is a level usually associated with distressed business. But Evraj’s dividends are covered by both earnings per share and cash flow, so it seems sustainable (for now, at least). Similarly, Rio Tinto’s annual dividend yield of 10.1% is high, but apparently difficult. It said that if demand for steel and base metals in China fell, both companies could suffer – the world’s largest consumer of raw materials.
Third on my dividend favorites list is the investment manager M&G yielding 9% dividends per year. Legal & General, its biggest competitor, also gives a market-beating yield of 6.3% per annum. Even in the midst of the 2020 Covid-1 market crash, L&G has not paid its bills, showing its financial strength. And the last on my list is Imperial, whose 8.9% dividend yield is comfortably covered by its huge cash flow from Sigi sales.
Now for the bad news
Like Rockefeller, I love my share dividends. But I also know that there is no guarantee of paying this cash. These can be cut, canceled or suspended at any time. In fact, during the 2020 coronavirus crisis, FTSE 35050 companies canceled or reduced their dividends. That’s why I always spread my risk by investing in a wide range of dividend paying stocks.
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Cliffordcy has no position in any of the shares mentioned. Motley Flowers has recommended the UK Imperial brand. The opinions expressed in the companies mentioned in this article may differ from those of the author and therefore the official recommendations we make on our subscription services, such as Share Advisor, Hidden Winner and Pro. Here at The Motley Flower, we believe that considering a variety of insights makes us a better investor.