Eight shares for income seeking investors

20th November 2013

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Despite the upswing in the global economy, ultra-low interest rates are forecast to remain a staple of the developed world for some time yet.

Against such a backdrop Jonathan Jackson, head of equities at brokers Killik & Co points to dividend-paying equities which offer an attractive yield for investors looking for income.

He says: “We believe interest rates will remain low for some time in order to stimulate economic growth. Against this backdrop, we believe equities continue to provide an attractive source of income for investors willing to accept a degree of risk.”

The prospective yield on UK equities at 3.69% is currently ahead of both the 20-year average, of 3.25% and well ahead of returns on cash and the 10-year UK Gilt yield, at 2.72%. He adds: “Furthermore, this represents a net yield, with the equivalent in gross terms 4.61% for a basic rate taxpayer and 6.15% for a higher rate taxpayer.”

But strong corporate corporate balance sheets provide the flexibility to pay progressive dividends to shareholders. Below Jackson tips the following stocks as an attractive source of progressive income:

 

UK EQUITIES

 

Prospective 2014 Yield – 4.6%

 

Prospective 2014 Yield – 4%

 

Prospective 2014 Yield – 5.1%

 

Prospective 2014 Yield – 5.6%

 

Prospective 2014 Yield – 3.7%

 

GLOBAL EQUITIES

 

Prospective 2014 Yield – 3.6%

 

Prospective 2014 Yield- 3.8%

 

Prospective 2014 Yield – 4.2%

 

Stock

Price

Prospective 2014 Yield

Dividend Cover

Free Cash Flow Cover

Net Debt to EBITDA

 

Berkeley Group Holdings

2,291p

4.6%

1.7x

0.8x

Net Cash

BHP Billiton

1,928p

4.0%

2.1x

3.3x

0.9x

HSBC Holdings

693p

5.1%

1.8x

2.0x

nm

National Grid

779p

5.6%

1.3x

2.3x

4.2x

Unilever

2,495p

3.7%

1.5x

2.0x

1.1x

BASF

€77.5

3.6%*

2.1x

3.3x

1.2x

Sanofi

€78.8

3.8%*

1.9x

2.3x

0.5x

Verizon Communications

$50.5

4.2%*

1.6x

4.2x

1.0x

 

Source: Company Data, Bloomberg

 

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