LONDON -- I'm a big fan of dividends, but some shares are better payers than others. Using a market statistics package, I've trawled the market to find five of the most fantastic dividend records on the market today.
Royal Dutch Shell (LSE:RDSB)
Royal Dutch Shell has not cut its dividend to shareholders in all the years since the end of World War II. In 2011, the company paid out more in dividends to its shareholders than any other FTSE 100 company. All by itself, Shell pays out 1 pound in every 8 pounds paid in dividends by FTSE 100 companies.
Shell is forecast to report a 4.2% increase in its dividend for the last full year. This is expected to increase again for 2013. In recent years, shares in Shell have rarely traded on such a high yield. 2012 earnings are forecast to come in slightly below the 2011 level before picking up again in 2013 as new projects come on stream. Shell's 2013 P/E of 8.1 is considerably lower than the FTSE 100 average.
Of all the companies in the FTSE 100, it is Tesco that has the longest record of successive dividend increases. Tesco has increased its shareholder dividend every year without fail since 1984. That certainly puts the company's recent short-term difficulties into perspective.
Some analysts are speculating that Tesco will cut its dividend this year. I don't expect this. Although the interim dividend was held at 4.63 pence per share, there are two reasons why I expect the final dividend to show a rise on last year's figure. First, Tesco has recently announced encouraging trading figures. Second, Tesco is immensely proud of its dividend record. I doubt a CEO who has been in the job for less than two years would wish to bring Tesco's record to an end.
Specialist financial firm Resolution currently offers the biggest dividend yield in the FTSE 100. The 2011 payout equates to 7.4% at today's prices. The dividend is expected to increase for 2012, putting the shares on a prospective yield of 7.8%. Resolution's dividend has been increased for the last three years, and another increase is forecast for 2013.
Brave investors had the opportunity to pick up Resolution recently on an even higher prospective yield. The shares are up 18.9% in the last three months. Following some adjustment of the company's capital base, the market has become more confident of Resolution's ability to continue paying such a massive yield.
Petrofac provides services for companies that are operating oil fields.
Of all the companies in the FTSE 100, Petrofac has been growing its dividend fastest over the last five years. Since 2007, the Petrofac payout has been increased by an average of 44% per annum. That's the sort of dividend growth most income investors can only dream of. Better still, that dividend is forecast to carry on increasing. Analysts forecast a 15.3% dividend increase for 2012 before another 12% rise in 2013.
This puts the shares on a prospective 2013 yield of 2.6%. While this may not sound like a large yield, it is comfortably ahead of typical bank-account interest. It is also four times the size of the dividend of 2007, when the shares were trading at about one-third of today's price.
In 2012, Vodafone paid more cash out to shareholders than any other company in the FTSE 100.
The yield on Vodafone shares has been increasing at a rate of 7.1% a year for the last five years. In 2012, Vodafone declared 9.52 pence of ordinary dividends and also paid an additional 4 pence per share as a special dividend which owed to a dividend that Vodafone received itself from its U.S. associate company, Verizon Wireless, at the beginning of 2012.
This dividend to Vodafone was repeated at the end of 2012. Vodafone has decided to use 1.5 billion pounds of this buying back its own shares in the market. This has the effect of increasing the proportion of the company that current shareholders own -- making it easier for Vodafone to increase ordinary dividends in the future.
Successfully investing in dividend-paying shares is what made Neil Woodford his name as the U.K.'s best fund manager. Woodford's stock selections have seen his fund beat the market over the short, medium, and long term. To help you learn from this master investor, the Motley Fool has prepared a free special report into the stock selections of this master investor. "8 Shares Held By Britain's Super Investor" is available now. Simply click here to get your copy today.
David owns shares in Vodafone but none of the other companies mentioned. The Motley Fool owns shares in Tesco and has recommended shares in Vodafone. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.