Ordinary dividends in the UK are expected to rise 4.5 percent in 2014, at aslower growth rate than previous years, research by Markit shows, although abumper one-off payout by Vodafone is set to lift the total payout.
The total FTSE 350 payout will hit 89.3 billion pounds, a 21 percentrise on the 2013 total, after Vodafone agreed to sell its stake inVerizon Wireless to Verizon in a $130 billion deal, with Markit expecting14.5 billion pounds ($23.84 billion) is returned to investors through a specialdividend.
However, a reduction in Vodafone's ordinary dividend is the biggest singlestock factor in slowing down dividend growth for the year.
Markit says that sectoral trends in early 2014 across the index otherwiseremain broadly similar to previous years.
"The precious metal mining companies continue to struggle and the technologysector continues to deliver strong growth in payouts," Markit says in a researchnote.
Underlying growth for technology stocks will be led by the likes ofchipmaker ARM, which has increased its payout by at least 20 percentwith each of the past seven sets of earnings, as the sector continues to movefrom one dominated by growth stocks to one that has a more dependable stream ofdividend income.
The basic resources sector is expected to see total payouts dip 11 percentyear on year, with the likes of Evraz, Kazakhmys and HochschildMining set to maintain suspensions of their payouts in the near term.
The dividend yield of UK-listed stocks remains attractive, however, with anaverage yield of 3.1 percent for FTSE 350 companies slightly higher than theSTOXX Europe 600 average of 2.9 percent, Thomson Reuters StarMine datashows.
Markit's estimates are less optimistic than those of Capita Asset Services,who see the total payout for 2014 topping 100 billion pounds.
($1 = 0.6083 British pounds)
Reuters messaging rm://alistair.smout.thomsonreuters.com@reuters.net
Vodafone (VOD)