Temple Bar Investment Trust (LSE: TMPL) is on track for 30 years of unbroken dividend growth after lifting its recent interim dividend by 3%. At a current share price of 1,191p, the trust is on a trailing yield of 3.1%.
Picking great dividend shares has helped Temple Bar outperform the FTSE All-Share Index over the past three, five and 10 years.
Let’s take a look at Temple Bar’s current top three holdings: GlaxoSmithKline (LSE: GSK), HSBC Holdings (LSE: HSBA) and Vodafone (LSE: VOD) (NASDAQ: VOD.US).
GlaxoSmithKline
Leading FTSE 100 pharma firm GlaxoSmithKline released satisfactory first-half results a couple of weeks ago. The drugs and consumer healthcare giant reaffirmed its full-year guidance of core earnings per share (EPS) growth of 3-4%, with turnover growth of around 1% (both at constant exchange rates).
The board declared a second-quarter dividend of 18p, the same as the first-quarter. The 36p payout to date represents a 5.9% increase on the same period last year. In the circumstances, the analyst consensus of 4% growth for the full year looks a little mean. However, the consensus for 2014 is for growth to accelerate to 6.8%.
At a recent share price of 1,671p, GlaxoSmithKline offers a dividend yield of 4.6% based on the 2013 forecasts, rising to 4.9% for 2014.
HSBC
Banking behemoth HSBC reported big growth numbers for profit and EPS within its half-year results announced earlier this week. However, the numbers weren’t quite as big as analysts were hoping for and the market was underwhelmed. The shares are currently down over 7% on their closing price last week.
The board announced a dividend of US$0.10 (up 11.1%) for the second quarter, delivering on a commitment made at the start of the year for that level of payout in each of the first three quarters. Analysts are expecting double-digit growth to be maintained for the full year, with more of the same for 2014.
At a recent share price of 704p, HSBC offers a dividend yield of 4.8% on 2013 forecasts, rising to 5.4% for 2014.
Vodafone
Telecoms titan Vodafone reported a mixed picture within its most recent trading update last month, but the chief executive told shareholders: “Although regulation, competitive pressures and weak economies, particularly in Southern Europe, continue to restrict revenue growth, we continue to lay strong foundations for the longer term”.
Vodafone’s share price continues to be buoyed by talk of a telephone-numbers-sized deal for its stake in US operator Verizon Wireless. If such a deal did happen it would obviously have potential implications for Vodafone’s dividend. The company would lose the ongoing cash flow from Verizon but would gain a whopping great pile of cash in one fell swoop.
In the meantime, Vodafone this year changed its dividend policy from at least 7% annual growth to the rather less appealing at least maintain the dividend at current levels. However, analysts are forecasting some growth in the payout this year and next — giving yields of 5.2% and 5.4%, respectively, at a recent share price of 199p.
Happy retirement!
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> G A Chester does not own any shares mentioned in this article. The Motley Fool has recommended shares in GlaxoSmithKline and Vodafone.
