LONDON -- One of the most popular funds tracking the FTSE 100
The payout confirmed that aggregate dividends from Britain's 100 largest companies continue to advance following the widespread cuts seen during the banking crash. However, the current aggregate dividend from the FTSE 100 index remains a fraction below the level seen prior to the recession.
Today's 5.61 pence-per-share payout now means the iShares FTSE 100 ETF has declared dividends of 20.27 pence per share during the last 12 months -- up 12% on the preceding 12 months. As the table below shows, that 20.27 pence figure is 6% below the iShares FTSE 100 ETF's all-time dividend peak, which was reached a few years ago:
|
12 Months to February |
iShares FTSE 100 Dividend (pence per share) |
|---|---|
|
2007 |
17.56 |
|
2008 |
19.43 |
|
2009 |
21.56 |
|
2010 |
16.07 |
|
2011 |
15.68 |
|
2012 |
18.55 |
Source: iShares.com/Bloomberg.
Recent dividends from the iShares FTSE 100 may have been bolstered by good results from major blue-chip shares. Indeed, members of the FTSE 100 raising their payouts of late include BT, with a 15% advance; BP, with a 12.5% dividend increase; and GlaxoSmithKline, with a 6% advance.
The possibility of better returns
While index trackers such as the iShares FTSE 100 are a great way to capture the long-term collective power of British companies and the stock market, there are always individual shares that have better dividend records -- and could deliver better returns -- than the wider index.
Here are three quick ideas that might beat the iShares FTSE 100:
|
|
Five-Year Dividend Growth |
Price (pence) |
Trailing Yield |
|---|---|---|---|
|
iShares FTSE 100 |
6% |
578 |
3.5% |
|
Centrica |
33% |
320 |
4.8% |
|
J Sainsbury |
34% |
349 |
4.6% |
|
SSE |
32% |
1,400 |
5.7% |
Source: Bloomberg.
Of course, you must do your own further research before buying any individual share. While some companies may offer better payout histories than the blue-chip index, a tracker will always provide greater dividend diversification.
Nonetheless, you always have the option of building a portfolio of shares that could beat the all-around dividend progress of the FTSE 100. Indeed, one investor whose portfolio dividends have been thrashing those of the FTSE is Neil Woodford, the head of investments at Invesco Perpetual and quite possibly the City's finest dividend-devoted stock-picker.
As you can see from this table, the income from one of Woodford's funds hardly buckled during the banking crash:
|
12 Months to October |
Invesco Perpetual Income Fund (pence per share) |
|---|---|
|
2007 |
46.24 |
|
2008 |
46.4 |
|
2009 |
45.17 |
|
2010 |
48 |
|
2011 |
48.81 |
|
2012 |
50.23 |
Source: Bloomberg.
What's more, Woodford's longer-term dividend performance far outstrips that of the iShares FTSE 100:
|
|
2002 |
2012 |
Change |
|---|---|---|---|
|
iShares FTSE 100 (pence per share) |
12.15 |
20.27 |
67% |
|
Invesco Perpetual Income (pence per share) |
24.81 |
50.32 |
103% |
Source: Bloomberg.
To learn more about Woodford, his dependable style of dividend investing, and the shares he favors right now, this free Fool report can be sent to your inbox immediately. You never know -- the blue-chip shares covered by the report could easily help your dividends outpace those of the FTSE 100 in the years ahead. Just click here to download your copy of the Neil Woodford report today.
