After years of subdued returns, Lloyds’ management reacted to improving results this week by more than doubling the dividend payout and also lobbing in a 0.5p special dividend to boot. Investors responded by sending its shares soaring. In sharp contrast, RBS disappointed investors on Friday by pushing dividend expectations out into the future.
Source: AJ Bell/Digital Look
And the bank is now back among the big guns when it comes to blue chip yield stocks according to this chart from AJ Bell. Lloyds has returned to the top 10 in terms of its dividend outlook for 2016 and, of the top payers, also boasts the strongest level of cover. Indeed, given the nature of the business of some of the other top dividend payers, Lloyds could well rise in the ranks during the coming year if emerging markets or commodity prices fail to recover – something which could cast doubt on dividends at companies such as Aberdeen Asset Management, Shell, BP and Centrica.
