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The London inventory market has lengthy been a well-liked looking floor for traders searching for a big and dependable passive revenue. FTSE 100 shares particularly have confirmed dependable dividend performs with the UK’s premier index full of cash-generating corporations in mature industries and powerful payout cultures.
That mentioned, UK shares have misplaced a few of their lustre from a dividend perspective extra lately. Underlying dividends (which additionally exclude particular dividends) dropped 0.6% in 2024, representing the second successive yr of declines.
On a world foundation, shareholder payouts rose 6.6%, in response to Janus Henderson. Within the US, underlying dividends have been up 8.7% yr on yr.
Taking a world view
That isn’t to say London’s now a foul alternative to buy a second revenue. Spire Healthcare — a share I maintain in my Shares and Shares ISA — hiked the unusual dividend 320% in 2024, for example. Dozens of different UK shares raised theirs by triple- and double-digit percentages too.
However final yr’s efficiency exhibits the knowledge of looking the world for dividend shares and never simply sticking to the UK. Ageas is one such dividend share I’m contemplating for my very own portfolio. The Belgian insurance coverage large has raised dividends throughout 11 of the final 12 years. The one exception got here throughout 2020 — then the enterprise froze money rewards on the peak of the pandemic.
Ageas is very money generative, and is tipped to maintain elevating dividends regardless of macroeconomic dangers. Its ahead dividend yield is a gigantic 6.6%.
I’m additionally taking an in depth have a look at Enel. The Italian power producer has raised dividends yearly since 2015. This stability displays the inelastic nature of energy demand and the dependable money flows it supplies. A concentrate on renewable power can create some turbulence during times of unfavourable climate. Nonetheless, the agency’s portfolio of gas-fired crops helps restrict any harm.
The dividend yield right here is 5.7%.
A high US dividend share
Trying additional afield, Realty Revenue (NYSE:O) is a US share I’ve lengthy admired for its dividend progress file. Investor payouts have risen for 112 consecutive quarters. This implies annual dividend progress because the 1994-listed actual property funding belief (REIT) stands at a wholesome 4.2%.
I additionally like Realty Revenue due to the frequency of its dividends. The self-styled ‘Month-to-month Dividend Firm’ has paid money rewards roughly each 4 weeks for 56 years. This offers traders faster entry to dividends for potential reinvestment.
Reflecting its REIT standing, Realty Revenue is obligated to pay not less than 90% of annual earnings from its rental operations out in dividends. That is in trade for juicy tax perks. However this doesn’t assure a big and rising dividend by itself. Income can fall throughout financial downturns when lease assortment and occupancy points could spring up.
Please word that tax remedy depends upon the person circumstances of every shopper and could also be topic to vary in future. The content material on this article is offered for info functions solely. It’s not supposed to be, neither does it represent, any type of tax recommendation.
Nonetheless, this rule can nonetheless make it a extra reliable dividend payer than most different shares when earnings sink. What’s extra, the corporate has roughly 15,600 business properties locked down on long-term contracts, a robust cushion from attainable downturns.
Realty Revenue’s ahead yield’s a chunky 5.4%.
