A fifth of Footsie firms to hike dividends
The news that payouts from FTSE 100 index shares are potentially on the rise is likely to be welcomed by savers who want to make up for the falling interest rates on lacklustre savings accounts.
Andy Yates, of DigitalLook, says: 'Last year's market was a washout almost across the board but this year sensible stock picking should prevail.
'With concerns that Government bonds are overpriced and low saving rates on savings accounts perhaps high yielding shares will make up the gap for income hungry investors.'
The sectors that are forecast to see the strongest rises in dividends, payout from shares, this year are defensive stocks, whose profits are regarded as relatively uncorrelated to the state of the economy and more surprisingly the big listed travel companies.
The list is led by Imperial Tobacco Group with an increase of 23.7% on top of their current dividend yield of 3.5%.
Now reaping the awards of consolidation that has taken out an enormous amount of capacity from the sector over the last few years, tour operators are also forecast to stay in very good shape.
Thomas Cook's dividends are projected to grow by 20.6% on top of a yield currently standing at 5.7% whilst TUI Travel is expected to increase its dividend by 20% boosting its yield of 4.1%.
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Other anticipated high risers include Cable & Wireless, with a 16.2% forecast rise, International Power with a predicted 14.1% increase and British American Tobacco with 12.4%.
AstraZeneca, Inmarsat, FirstGroup and ICAP, are also expected to hike their dividends substantially.
There has been an assumption as some high profile names, notably embattled banks, such as Lloyds TSB, Barclays, Halifax Bank of Scotland and Royal Bank of Scotland have announced that they are cutting their dividend and that others like Marks & Spencer are rumoured to be cutting theirs, that all equities will see their pay out slashed.