If we take into account the hefty special dividend paid out by Vodafone early last year then total dividends including special payouts will dip by 10 per cent to £82.1bn.
Notably the FTSE250 is expected to be the source of the most healthy growth in dividends between now and 2017 as the general performance of the UK economy, to which the FTSE250 is skewed, is likely to outweigh tougher growth prospects for the global resource- and banking-heavy FTSE100.
The oil and gas sector has been hit by companies such as Tullow Oil (TLW) pulling dividend payments of late but heavyweights Royal Dutch Shell (RDSB) and BP (BP) are expected to maintain payouts. The supermarket sector has been hit with Tesco (TSCO) pulling its dividend and Sainsbury’s (SBRY) payout likely to be cut in the coming months while utilities dividends are also under pressure from tough market conditions.
Hot spots for forecast dividend growth include insurance, where companies such as Admiral (ADM), Amlin (AML), Direct Line (DLG), Legal & General (LGEN) and Phoenix (PHNX) all offer yields above the 5 per cent level. Meanwhile, payouts from the media sector, which is riding the upswing in economic fortunes, are expected to rise by 15 per cent this year and 25 per cent next, boosted by the likes of ITV (ITV) and WPP (WPP) upping their dividends by a significant amount.
