Here is the London Stock Exchange Dividend Forecast for 2023 and 2024!
The London Stock Exchange Group (LSE:LSEG) share price is up an impressive 16% since the start of 2023. Unfortunately, this means that the company's current dividend forecasts lead to relatively low yields. For 2023, the FTSE 100 firm has a 1.3% return, below the index's projected average of 3.7%.
But that wouldn't deter me from investing in a company for passive income. In fact, as a long-term investor, the rate at which it has been raising dividends in recent years is very attractive to me. Here's why I think London Stock Exchange shares could be a great buy right now.
Dividend growth
Over the past 20 years, the company has increased payouts to shareholders at a compound annual growth rate of 17.4%. That included another double-digit increase last year to 107p per share. City analysts expect full-year remuneration to rise to 115.5p per share in 2023. A further increase, to 128.3 p, is expected for next year as well. As a result, the dividend yield improves to 1.5%.
As I already mentioned, returns on London Stock Exchange shares lag behind the market average by a wide margin. But unlike many FTSE 100 stocks facing a tough economic environment, I think the financial and data company is in great shape to meet current dividend forecasts. The expected dividends for 2023 and 2024 are covered by 2.9 times higher and expected earnings, respectively. Any reading above 2x gives investors a wide margin of safety.
In addition, the company has a strong balance sheet that it can use to pay out expected dividends if earnings disappoint. Its daily net debt to adjusted EBITDA target reached a reasonable 1.8 times in the first half of 2023. The company's £750m share buyback program launched last year underlines its financial strength and commitment to returning cash to shareholders.
Shares to buy?
I have some reservations about buying LSE shares. The lack of new initial public offerings (IPOs) in the UK is one of my main concerns. The EY Club reports that there were only 18 public offerings in the first half of 2023, down from a peak of 47 in the same period in 2021.
A tough macroeconomic and geopolitical environment is curbing IPO action and, more worryingly in the long term, US listings are becoming more attractive to companies due to higher valuations and trading volumes. But on balance I still think the FTSE 100 is the best stock to buy today. And it's not just because IPO action could bounce back when business confidence eventually improves.
The acquisition of Refinitiv in 2021 makes the London Stock Exchange a huge player in data and analytics. It's a fast-growing part of the business (revenues here were up 7.6% in the first half). And the FTSE could pump out profits here through further acquisitions.
Its recent decision to raise its net debt to an adjusted EBITDA target (to 1.5-2.5x) suggests that more M&A action could be coming soon. City analysts expect earnings growth to accelerate from 6% in 2023 to double-digit percentages in 2024 and 2025 This is a FTSE stock that I believe has huge investment potential.
When investment expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter, which has been running for almost a decade, has provided thousands of paying members with recommendations on the best stocks from the UK and US markets. And right now, Mark thinks there are 6 exceptional stocks that investors should consider. . Want to find out if the London Stock Exchange has made the list?
Royston Wild has no position in any of the stocks mentioned. The Motley Fool UK has no position in any of the stocks listed. The opinions expressed about the companies mentioned in this article are those of the author and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that we are better investors with a diverse range of insights.
The London Stock Exchange (LSE) remains a focal point for investors seeking reliable income through dividends. As the second half of 2023 approaches, it's natural to think about the dividend forecast for the coming years, specifically 2023 and 2024. In this article, we'll delve into the predictions and trends that may shape the London Stock Exchange's dividend payout during this period. Economic outlook and dividend growth
The health of the global and UK economy has a significant impact on the dividend environment. A robust economy generally leads to increased corporate profits, which in turn can translate into higher dividends for shareholders. As we move through 2023 and into 2024, prevailing economic conditions will be the deciding factor in determining dividend growth.
Several sectors on the London Stock Exchange have historically been associated with stable and attractive dividends. These include the financial sector, energy and pharmaceuticals. Monitoring these sectors, along with any emerging trends, can provide valuable insights into the overall dividend forecast.
Company-specific considerations
The dividend policy of individual companies plays a significant role in shaping the overall dividend environment of the London Stock Exchange. Companies with a track record of consistent dividend payouts and strong cash flows are likely to continue to be an attractive option for income-oriented investors.
Brexit and regulatory changes
Brexit has brought various uncertainties to UK financial markets. Any regulatory changes that may occur during 2023 and 2024 could impact the payment of dividends. Being informed about these developments is essential to a comprehensive understanding of the dividend forecast.
The importance of diversification
Diversifying your investment portfolio is always a prudent strategy. This also applies to dividend-oriented investments. By spreading your investments across different sectors and companies, you can mitigate risk and potentially benefit from different dividend opportunities.
While we cannot predict the future with absolute certainty, by analyzing economic indicators, industry trends, company-specific factors and keeping up with regulatory changes, we can create a reasonable forecast for London Stock Exchange dividends in 2023 and 2024. keep in mind the importance of a diversified portfolio for effective management risks.
As the financial landscape evolves, it's critical to stay adaptable and well-informed. By understanding the dynamics at play, you will be better equipped to make informed investment decisions in the face of a changing dividend forecast on the London Stock Exchange. London Stock Exchange, Dividend Forecast, 2023, 2024, Economic Outlook, Sectors, Brexit, Regulatory Changes, Diversification, Investment Decisions.
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