Today, I’m looking at the latest dividend forecasts for utility companies SSE and National Grid, as well as telecommunications group BT.
As analysts’ dividend estimates constantly fluctuate, it pays to review them every so often.
All figures are sourced from Stockopedia.
Analysts currently expect SSE (LON: SSE) to pay the following dividends:
2018 – 94.5p per share
2019 – 97.4p per share
At the current share price of 1,324p, those payouts equate to yields of 7.1% and 7.4%.
In the last month, analysts have upgraded their 2018 dividend estimate by 0.15p and upgraded their 2019 forecast by 0.26p.
Those yields are HIGH! Investors have sold down the stock on fears of price caps and a potential renationalisation. Yet, it’s worth noting that analysts are actually upgrading their dividend forecasts.
Analysts currently expect National Grid (LON: NG) to pay the following dividends:
2018 – 46.2p per share
2019 – 47.2p per share
At the current share price of 868p, those payouts equate to yields of 5.3% and 5.4%.
In the last month, analysts have downgraded their 2018 forecast by 0.18p and downgraded their 2019 forecast by 0.16p.
Lastly, analysts currently expect BT Group (LON: BT.A) to pay the following dividends:
2018 – 15.9p per share
2019 – 16.6p per share
At the current share price of 271p, those payouts equate to yields of 5.9% and 6.1%.
In the last month, analysts have upgraded their 2018 dividend estimate by 0.12p and upgraded their 2019 estimate by 0.18p.
Why are utility companies’ yields so high right now?
The share prices of many UK utility companies have fallen heavily over the last six months, pushing up dividend yields. Why has this happened? There are several reasons.
First, price caps could result in lower profits. Second, talk of renationalisation has created considerable uncertainty (see my article on National Grid here). Third, many investors are chasing growth right now, and as a result, boring defensive stocks are out of favour.
Disclosure: Edward Sheldon, CFA has no position in any companies mentioned.
This article is provided for general information only and is not intended to be investment advice. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.