The FTSE 100 is an index that includes the top 100 companies from the London Stock Exchange. They are ranked by their market capitalization. However, the market cap may not be an investor’s only interest in a stock.
Many of the stocks in this index pay dividends. Those seeking income from stocks will want to know what kinds of dividend yields are available. FTSE stock dividend yields range from approximately 1% to 9%. We have selected the top five FTSE stocks that pay a dividend. Data is as of December 27, 2017.
- The FTSE 100 includes the top 100 companies from the London Stock Exchange.
- Rankings are by market capitalization and include Centrica, SSE, GlaxoSmithKline, Marks & Spencer Group, and BP.
- Many top stocks also pay dividends.
1. Centrica (CNA)
Centrica is a British utility company. Its primary operations include the distribution of gas and electricity for energy services. The company provides energy services in the U.K. and North America. In North America, its branded services are provided through Direct Energy, WTU and CPL. In the U.K. services are provided from British Gas and Centrica Energy. In the U.K. its operations also include gas fields, power stations, wind farms, energy storage, and gas exploration.
The company pays semi-annual dividends. It has the highest dividend yield in the FTSE 100 at 8.65%.
- Avg. Volume: 3,915,677
- Market Cap: GBP 7.77 billion
- PE Ratio: 4.40
- 2016 EPS: GBP 31.20
- Dividend Yield: 8.65%
- Price: GBP 137.75
2. SSE (SSE)
SSE is also an electricity and gas company. It provides energy services throughout England and Ireland. SSE uses gas, oil, coal, water, and wind to generate electricity. It distributes electricity to nearly four million users that include businesses and homes. It also distributes gas to homes and businesses.
It owns overhead and buried cable networks for electricity distribution, as well as gas lines for distributing natural gas. SSE provides lighting for streets and provides maintenance for wiring and heating units.
The company pays a semi-annual dividend. It has a dividend yield of 7.08%.
- Avg. Volume: 1,025,289
- Market Cap: GBP 13.24 billion
- PE Ratio: 7.92
- 2017 EPS: GBP 158.20
- Dividend Yield: 7.08%
- Price: GBP 1,294.00
3. GlaxoSmithKline (GSK)
GlaxoSmithKline is a British healthcare company focused on pharmaceutical drugs and products. It operates three business lines: prescription medicines, vaccines, and consumer healthcare products. In 2015 the company partnered with Novartis in a transaction that has helped to strengthen the growth of the business. Through the deal, GSK acquired Novartis’s vaccines business. It also combined the consumer healthcare businesses of the two companies. It's major competitor is Gilead Sciences.
GSK now has over 99,000 employees. In 2016, they generated a net profit of GBP 1.062 billion. Earnings per share for the year were GBP 18.60. In 2016, the company also reported positive cash flow of GBP 1.2 billion which equated to 120.89 per share. The company pays quarterly dividends. It has a dividend yield of 6.14%.
- Avg. Volume: 2,156,740
- Market Cap: GBP 64.02 billion
- PE Ratio: 39.58
- 2016 EPS: GBP 18.60
- Dividend Yield: 6.14%
- Price: GBP 1,310.75
4. Marks & Spencer Group (MKS)
Marks & Spencer is a luxury brand department store with operations across the U.K., Europe, the Middle East, and Asia. The company’s sales have been volatile in recent years with new branding strategies and leadership helping to revive revenue. In April 2016, Steve Rowe took over as the company’s CEO. Under Rowe’s leadership, the company has been cutting costs and reviewing stores for closure. It has also increased sales in its food business which accounts for approximately 60% of the U.K. turnover.
For the year ended April 2017, the company reported a profit of GBP 117.7 million with earnings per share of GBP 7.2. 2018 could be a breakout year for the company as it looks to reduce costs and rebuild the customer experience. The company pays semi-annual dividends. It has a dividend yield of 5.96%.
- Avg. Volume: 2,248,095
- Market Cap: GBP 5.09 billion
- PE Ratio: 8.34
- 2017 EPS: GBP 7.2
- Dividend Yield: 5.96%
- Price: GBP 315.90
5. BP (BP)
BP is one of the largest oil and gas companies in the world. The company dates back to 1889 and has its headquarters in London. It explores for oil and gas and is involved in transporting and storing natural gas and oil. It also is involved in the refinery of petrochemical products such as gasoline, aviation fuel, diesel, and lubricants. The company distributes its products through nearly 3,000 service stations. The company is also involved in alternative energy, with working interests in 14 wind farms.
In 2016 the company reported earnings per share of 44p increasing from GBP -23.16. Cash flow for the business was positive at GBP 16.112 billion. The company pays quarterly dividends. It has a dividend yield of 5.79%.
- Avg. Volume: 8,856,063
- Market Cap: GBP 102.5 billion
- PE Ratio: -78.76
- 2016 EPS: 44p
- Dividend Yield: 5.79%
- Price: GBP 519.00
The Bottom Line
When searching for robust dividend yields, it is important to choose companies that have a long track record of stability. Each of the companies on this list has a long history of profits, dividends and steady cash flow. Of course, an investor must also evaluate share price fluctuations to make sure an investment is not losing money despite the dividend.