The ten highest dividend payers in 2022
“Rio Tinto is expected to be the single biggest paying stock within the FTSE 100 in 2022 but Shell and British American Tobacco are not expected to be far behind it.
“This may have ESG-oriented investors gnashing their teeth, especially as they may argue both firms are acting too slowly in their attempts to shift their business mix to more renewable sources of energy. Shell and fellow oil major BP, also a top-ten dividend contributor, have a tricky balancing act as they look to get the best out of their existing assets, reinvest for the future (without overpaying here, amid the mad scramble for ‘green’ assets) and keeping shareholders sweet with cash returns.
“That said, Shell is starting to increase its dividend on a quarterly basis and both it and BP are also returning cash to investors via share buybacks.”
| 2022 E | |||
| Dividend (£ million) | Dividend as % FTSE total | Dividend cover (x) | |
| Rio Tinto | 5,801 | 6.9% | 1.44x |
| Shell | 5,406 | 6.5% | 3.24x |
| BAT | 5,241 | 6.3% | 1.49x |
| BHP Group | 4,652 | 5.6% | 1.34x |
| HSBC | 4,229 | 5.1% | 1.64x |
| Unilever | 3,792 | 4.5% | 1.35x |
| Glencore | 3,638 | 4.3% | 1.89x |
| AstraZeneca | 3,366 | 4.0% | 1.71x |
| BP | 3,357 | 4.0% | 3.09x |
| GlaxoSmithKline | 2,754 | 3.3% | 1.73x |
Source: Company accounts, Marketscreener, consensus analysts’ forecasts
The ten firms forecast to have the highest yields in 2022
“Investors will have to look carefully at the list of the highest-yielding firms, as some of them have a track record of having to cut their dividend payments when times get tough.
“At the time of writing, Evraz is the highest-yielding individual stock, closely followed by BHP and then Rio Tinto.
“Forecast of yields of more than 10% may make investors a little wary, given the shocking record of firms previously expected to generate such bumper returns, including Vodafone, Shell, Evraz itself and – when they were still in the FTSE 100 – Royal Mail, Marks & Spencer and Centrica. All were forecasts to generate a yield in excess of 10% at one stage or another and all cut the dividend instead.
“BHP’s likely disappearance from the FTSE 100 in 2022, when it adopts a Standard rather than a Premium listing and makes its primary base Australia, is another factor for investors to ponder, at least if they are seeking to glean yield from index-tracking funds.”
| 2022E | ||||
| Dividend yield (%) | Dividend cover (x) | Pay-out ratio (%) | Cut in last decade? | |
| Evraz | 17.2% | 1.29 x | 77% | 2012, 2013, 2014, 2020 |
| BHP Group | 10.6% | 1.34 x | 75% | 2016, 2020 |
| Rio Tinto | 10.0% | 1.44 x | 70% | 2016 |
| M & G | 9.4% | 1.16 x | 86% | No (listed 2019) |
| Imperial Brands | 9.2% | 1.55 x | 64% | 2020 |
| BAT | 8.5% | 1.49 x | 67% | No |
| Persimmon | 8.4% | 1.12 x | 89% | 2014, 2019 |
| Glencore | 7.8% | 1.89 x | 53% | 2015, 2016, 2020 |
| Phoenix Group | 7.6% | 0.74 x | 135% | 2016, 2018 |
| Taylor Wimpey | 7.5% | 1.58 x | 63% | 2019 |
Source: Company accounts, Marketscreener, analysts’ consensus forecasts, Refinitiv data
