LONDON -- With the FTSE 100 soaring this year, the average dividend yield of the index is down to about 3%, with forecasts for 3.1%. But that does include some companies still going for growth and paying low dividends, so if you're looking for income, you should realistically be aiming higher than that. Fortunately, we have a number of FTSE 100 companies paying 5% or better.
Here are three companies that have lifted their dividends this week.
Vodafone (LSE:VOD) (NASDAQ:VOD)
Vodafone has a good track record of paying dividends, and it didn't disappoint on Tuesday with a 7% hike in its full-year payment to 10.19 pence per share -- and that was about 1.5 times covered. On the current share price of 194 pence, that provides a yield of 5.3%. The rest of the news was a little mixed, though, with group revenue down 4.2% to £44.4 billion. But adjusted earnings per share gained 5% to 15.65 pence, putting the shares on a P/E of 12.4.
Forecasts for the year to March 2014 currently suggest a mere 2% rise in the full-year dividend, though some are suggesting no rise at all. But by this time next year, the nature of Vodafone could be very different, depending on how it gets on with Verizon Communications.
Tuesday also saw Burberry Group lift its annual dividend by 16% to 29 pence per share after the fashion retailer reported a 14% rise in adjusted pre-tax profit to £428 million -- though reported profit fell 4% due to one-off costs. The firm's operating cash flow looked strong, too, up 8% to £523 million.
Although the dividend only amounts to a yield of 1.9% on the current price of 1,502 pence, the share price has had a good few years, pushing the P/E up to about 20 based on forecasts for March 2014. And Burberry has a solid record of raising its dividend -- the City is expecting a further 10% rise for the coming year.
The utilities companies are definitely the darlings of dividend-seekers these days, as rising share prices show: SSE shares are up nearly 30% since early January. And on Wednesday, SSE lifted its dividend once again, by 5.1% to 84.2 pence per share -- with the shares trading for 1,643 pence apiece, that's a yield of about 5%.
With SSE setting "sustained real growth in the dividend payable to shareholders" as its primary business goal, analysts are expecting to see more of the same next year, with a further 4.7% rise to 88.2 pence penciled in, suggesting a yield of 5.3%.
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Alan Oscroft has no position in any stocks mentioned. The Motley Fool recommends Burberry Group and Vodafone. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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