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Dividend shares are an effective 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 at the very least 25 consecutive years, and generally longer. It’s a vastly spectacular achievement, because it means producing the money to fund shareholder payouts via 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 just 0.65%. That low yield hides its actual energy. The share value is up an unimaginable 33% over the past 12 months and 70% throughout two years, suppressing the headline yield.
The Halma share value remains to be climbing, regardless of immediately’s uneven markets. First-half outcomes printed 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 massive 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. Traders would possibly nonetheless contemplate shopping for on a inventory market dip, assuming Halma dips too. It could not.
DCC rewards shareholders
Advertising and assist providers group DCC (LSE: DCC) has lifted its dividend for 31 consecutive years. It’s in the midst of a significant strategic shift as CEO Donal Murphy works to show it into a world chief in vitality distribution, however this might be a possibility for long-term buyers.
DCC shares have disillusioned these days, falling 13% in a 12 months, but the valuation seems to be 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 fee of 8.97% throughout the final decade.
On 17 November, DCC mentioned it could return as much as £600m to shareholders through a young supply funded by the £1bn sale of its healthcare arm. There are dangers in any transition, however for long-term buyers, this might be a second to take one other look.
Sage Group seems to be sturdy
My third long-term dividend famous person 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 immediately it’s nearer 26 occasions. Nonetheless expensive, 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 12 months. Dangers embody a slowing world economic system and the risk that AI might undercut a few of its providers.
Nothing lasts eternally, however these three firms present how decided, well-managed companies can reward buyers, with share value progress and dividend will increase operating again a long time. Fingers crossed it continues. And there are many different nice FTSE 100 dividend shares on the index too.
