Household Brands Are UK’s Top Dividend Achievers - Large-Caps Dominate Index Of Consistent Dividend-Paying Stocks - Vodafone, SABMiller And British American Tobacco Included - Consumer Goods Predominant

Trusted brands known and used in every household in the UK were also among some of the most consistent, dividend yielding stocks over the past year, according to Indxis, a leading independent provider of bespoke indexes and investment products.  

These consistent dividend-paying stocks, the basis of its UK Dividend Achievers Index, produced an annualised return over the 12 months to January 31 of 5.32%, out-performing its MSCI benchmark by 3.81 percentage points. It has also produced an impressive return of 21.86% over the past three years, 3.2 percentage points above its benchmark, according to back-tested data.

Consumer goods made up a large part of the index, such as SABMiller, Diageo, Unilever, British American Tobacco and Tesco. Reckitt Benckiser Group, producers of Dettol and Clearasil, were also among the top 10 holdings¹, which is headed by telecoms giant Vodafone. Natural gas stocks BHP Billiton and BG Group were also present, along with pharmaceuticals company AstraZeneca.

Each of these stocks have increased their annual regular dividend payments for the last five or more consecutive years, the basis for being incorporated into the UK Dividend Achievers Index. Stocks are also screened for liquidity and investibility.

Alan Price, sales director at Indxis, said: ‘Investors continue to tread carefully when it comes to equity investments, even though dividends can provide a valuable supplement to income in tough economic times.

‘It is edifying to see that some of the largest and most trusted brands in the UK also feature among the most consistent dividend-paying stocks. In times like these, it is crucial to trust in those companies that have consistently increased their dividends over five years or more when investing for income, instead of chasing large one-off payments that are often used to hide a deeper malaise within a company.’

The latest Capita Registrars Dividend Monitor² revealed pay-outs from UK companies climbed to a record £67.8bn in 2011. In 2012, it predicts this could increase further to £75bn, led by Vodafone, which paid out in excess of £2bn in dividends at the beginning of this year from its holding in Verizon Wireless.

The UK Dividend Achievers Index mirrors the successful family of Mergent Dividend Achievers in the US, which identifies companies with a proven track record of consistent earnings growth and strong cash reserves. It includes UK companies that have increased their annual regular cash dividends for the past five or more consecutive years, providing a regular and reliable income stream for low-risk portfolio strategies.

Background

¹ Top 10 weighting in UK Dividend Achievers Index  (as of January 31 2012)

² http://www.capitaregistrars.com/publications/dividend-monitor-report-q1-2012.aspx