“A twelfth consecutive increase in its full-year dividend from BAE Systems and a tiny increase in the final payment from Centrica will offer anxious income hunters some comfort this morning and both shares are up despite a decline in the broader UK market,” he said. “BAE Systems is to offer a total dividend of 20.9p for 2015, up from 20.5p the year before, adding to a list of annual increments that dates back to 2003. That equates to a historic yield of 4.1%, using a share price of 506p and is also very nearly twice covered by the underlying earnings per share figure of 40.2p.”
“Centrica’s total dividend for 2015 of 12p represents a second straight year-on-year drop. However, the final payment of 8.43p compares to 8.4p a year ago,” Mould continued. “In addition, management’s increased confidence in the firm’s future cash flow prospects may ease fears about dividend cover, which is also lower than ideal at 1.4 times, and boost hopes that Centrica has established a base from which it can begin to grow its distribution again.”
