FTSE 350 dividends expected to reach record levels, boosted by strong dollar and National Grid deal

 
William Turvill
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National Grid, Royal Dutch Shell, Vodafone, HSBC and BP are expected to pay the biggest dividends (Source: Getty)

Shareholders in UK-listed companies are set for a boost in the coming months, with dividends paid across the FTSE 350 expected to reach a record level.

IHS Markit has forecast sweeteners across the 350 companies will total £20.7bn in the second quarter, up 25 per cent year-on-year.

The figure will be boosted by a stronger dollar and a special £3bn dividend being paid out by National Grid as part of the sale of its gas pipes business, valued at £14bn.

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Ordinary dividends are predicted to reach £17.4bn, up nine per cent on 2016. At a constant currency rate, the total would be £16.3bn, up 1.7 per cent.

“Relative weakness of sterling against the dollar is the key driver of higher payouts to UK investors this quarter (33 per cent of the predicted payments are determined in dollars, including key payers like BP, Royal Dutch Shell and HSBC),” the IHS report said.

“Excluding that favourable exchange rate tailwind, ordinary dividends are predicted to grow by a modest 1.7 per cent to £16.3bn.”

FTSE 350 second quarter dividends (£bn)

Year Ordinary dividends Special dividends Total dividends
2012 13.91 0.36 14.27
2013 15.29 0.45 15.74
2014 14.13 1.81 15.95
2015 14.1 0.96 15.07
2016 16 0.54 16.54
2017 17.43 3.22 20.66

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Royal Dutch Shell, Vodafone, HSBC and BP had the biggest dividends after National Grid, with the five paying out £12.7bn between them.

Utilities, led by the Grid, accounted for 25 per cent of the total payout, with oil majors BP and Royal Dutch Shell making up 22 per cent of the total alone.

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