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Dividend shares are a good way to construct long-term wealth and these three all have one particular attribute. So what makes them so particular?
Solely a dozen FTSE 100 firms have elevated their dividends for a minimum of 25 consecutive years, and generally longer. It’s a vastly spectacular achievement, because it means producing the money to fund shareholder payouts by means of thick and skinny, decade after decade. These three actually jumped out at me.
Halma is an earnings hero
Halma (LSE: HLMA) is the primary. Many buyers wouldn’t even spot it as a dividend inventory as a result of the trailing yield is simply 0.65%. That low yield hides its actual power. The share value is up an unbelievable 33% over the past yr and 70% throughout two years, suppressing the headline yield.
The Halma share value continues to be climbing, regardless of in the present day’s uneven markets. First-half outcomes revealed on 20 November confirmed revenues up 15.2% to £1.23bn and margins widening by 210 foundation factors. The board additionally lifted the interim payout by 7% to 9.63p. It’s elevated dividends for 45 straight years, compounding at 6.9% over the past 15.
Nothing is risk-free. Halma earns giant sums abroad, so forex actions can have an effect on outcomes. The worth-to-earnings ratio now stands at 37.6, effectively above the FTSE 100 common of round 18. So it’s not low cost. Buyers may nonetheless contemplate shopping for on a inventory market dip, assuming Halma dips too. It could not.
DCC rewards shareholders
Advertising and marketing and help providers group DCC (LSE: DCC) has lifted its dividend for 31 consecutive years. It’s in the course of a significant strategic shift as CEO Donal Murphy works to show it into a world chief in vitality distribution, however this could possibly be a chance for long-term buyers.
DCC shares have upset recently, falling 13% in a yr, but the valuation appears interesting because of this with a P/E of simply 12. The trailing yield sits at 4.22%, and the dividend has grown at a median annual charge of 8.97% throughout the final decade.
On 17 November, DCC stated it could return as much as £600m to shareholders through a young provide funded by the £1bn sale of its healthcare arm. There are dangers in any transition, however for long-term buyers, this could possibly be a second to take one other look.
Sage Group appears robust
My third long-term dividend celebrity is Sage Group (LSE: SGE). The software program supplier’s shares are up 80% over 5 years however have slipped 16% within the final 12 months. I’ve watched this one for some time. The valuation was at all times too excessive for me at roughly 33 occasions earnings, however in the present day it’s nearer 26 occasions. Nonetheless dear, however higher worth than earlier than. Sage has earned its premium value.
It has elevated dividends yearly for a spell-binding 37 years. So don’t be fooled by that modest trailing yield of simply 2%. During the last 15 years, payouts have compounded at 7.11% a yr. Dangers embody a slowing international financial system and the menace that AI might undercut a few of its providers.
Nothing lasts endlessly, however these three firms present how decided, well-managed companies can reward buyers, with share value development and dividend will increase working again a long time. Fingers crossed it continues. And there are many different nice FTSE 100 dividend shares on the index too.
