Capita: An FTSE 100 Dividend-Raising Starhttp://www.fool.com/investing/general/2012/12/04/capita-an-ftse-100-dividend-raising-star.aspx Kevin Godbold
December 4, 2012
LONDON -- In an outcome that's tough on investors, the FTSE 100 has failed to deliver a rising dividend payout over the last few years.
Just look at the iShares FTSE 100 ETF, for example. This is an exchange-traded fund that tracks the benchmark index, and we can see that the aggregate payment from Britain's top 100 companies has yet to regain its pre-recession peak:
But some companies within London's premier index have performed well on dividends, despite these austere times, and this series aims to seek them out. One such name is Capita (LSE: CPI).
The big question is whether the company's dividend can continue to outperform its index. Let's take a closer look.
Capita is one of the U.K.'s leading outsourcing specialists. With the shares at 766 pence, the market cap is 5 billion pounds. This table summarizes the firm's recent financial record:
So the dividend has increased by 78% during the last five years -- equivalent to a 15.6% compound annual growth rate.
In an update released on Nov. 13, Capita sounded upbeat, citing a record 1.7 billion pounds in contract wins to that point during 2012. Apparently, that's the tip of a 4 billion pound iceberg of bids backed up by a buoyant prospect list. If that business all converts to cash flow, the prospects for the dividend look encouraging, especially when compared to Capita's