Vodafone dividend among £3bn of cash for investors in August

A £1 billion distribution that marks the end of an era for high-yielding Vodafone Group (LSE:VOD) is among £3.2 billion of dividend payments due from nine FTSE 100 companies in August.

The biggest is the £1.3 billion quarterly dividend of British American Tobacco (LSE:BATS), while others of note include £153 million from Burberry Group (LSE:BRBY) before it turns off the dividend taps.

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All payments bar one are in the first two days of the month, providing retail investors with a timely income boost at the start of the August summer holidays.

Unilever (LSE:ULVR) shareholders will have to wait a little longer, however, as their slice of the near-£1 billion dividend is due in early September compared with last year’s at the end of August.

This and the National Grid (LSE:NG.) dividend being earlier than last year means the total haul is down from £5.4 billion recorded by 12 FTSE 100 companies in August 2023.

As with last year, Vodafone is the highest-yielding stock in the month’s dividend diary.

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The current 10.4% is based on another payment of 4.5 euro cents a share, continuing the run of interim and final awards at this level going back to February 2020. This converts in sterling to 3.79p a share, down from 3.84p in February and the peak of 4.08p in August 2020.

As recently as August 2018 the distribution stood at 10.23 euro cents or 9.9p a share.

That was announced by boss Vittorio Colao alongside 2017-18 results showing service revenues of 41 billion euros and adjusted earnings per share of 11.59 cents. The equivalent figures in last May’s results were 29.9 billion and 7.47 cents respectively.

The shares have more than halved since that 2018 payday to reach their lowest level in two decades, fuelled by intense competition in key markets including Germany.

As part of a wide-ranging restructuring that has led to the sale of operations in Italy and Spain, chief executive Margherita Della Valle recently announced a new capital allocation framework that will rebase the 2025 total dividend to 4.5 cents.

The cut will be offset by plans for share buybacks worth four billion euros (£3.4 billion), part of the 12 billion euros (£10.3 billion) of proceeds from disposals. Based on recent UBS forecasts, Vodafone now trades with a forward dividend yield of 5.5%.

British American Tobacco yield stands at 8.4%, having delivered 25 years of consecutive dividend growth.

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Friday’s planned payment of 58.88p a share is the second part of the 235.52p declared with February’s annual results, with the remainder set for November and February 2025.

BATS said last month: “We understand the importance of cash returns to shareholders, and remain committed to our progressive dividend based upon 65% of long-term sustainable earnings.”

At the other end of the spectrum, the 0.8% yield of fire safety technology business Halma (LSE:HLMA) is the lowest in next month’s diary based on the distribution of £50 million through a full-year award of 13.20p a share on 16 August. That’s 7% higher than last year’s payment.

One of the first distributions of the month is by Next (LSE:NXT), which is paying a £169 million dividend of 141p a share following more strong trading in the year to 27 January. Its shares yield 2.3%.

The following day sees Burberry distribute 42.70p a share. However, shareholders were told alongside this month’s latest profit warning that dividends are on hold for the current financial year in order to preserve balance sheet strength.