FTSE 100 dividend forecasts are holding flat but are still at an attractive level, albeit shy of 2018’s all-time high. When share buybacks are taken into consideration as well, the income opportunity offered by UK equities looks compelling.
The biggest 100 companies in the UK are expected to pay out £78.6bn in 2024 and £83.9bn in 2025, according to AJ Bell’s quarterly dividend monitor. While these estimates haven’t increased since last quarter, they are strong from a historic point of view. The all-time record is £85.2 billion.
The overall cash yield on UK equities has also been boosted by share buybacks and special dividends. We have seen an increase in buyback activity in the UK market in recent years as firms look to capitalise on the valuation discount in their stock. The value of buybacks announced so far in 2024 has hit £49.9bn.
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