Is William Hill plc A Stronger Dividend Share Than Vodafone Group plc, BAE Systems plc, GlaxoSmithKline plc And Unilever plc After 2016 Results?

Are shares in William Hill plc (LON:WMH) (LSE:WMH.L) a more appealing dividend option than shares in Vodafone Group plc (LON:VOD) (LSE:VOD.L), BAE Systems plc (LON:BA) (LSE:BA.L), GlaxoSmithKline plc (LON:GSK) (LSE:GSK.L) and Unilever plc (LON:ULVR) (LSE:ULVR.L)?

WIlliam Hill plc
WIlliam Hill plc

Dividend share William Hill plc (LON:WMH) (LSE:WMH.L) has released 2016 results to investors. Dividends have been maintained at 12.5p per share. The company says this reflects its continued strong cash flow and its confidence in the delivery of strategic priorities and future growth. This means William Hill’s shares have a dividend yield of 4.7% at the time of writing.

The company’s net revenue in 2016 declined 1% to £1603.8 million. Adjusted operating profit was down 10% at £261.5 million, while earnings per share was also 13% lower on an adjusted basis. This was in line with guidance, while William Hill has seen positive trading in the first 7 weeks of the 2017 financial year.

It has registered positive trends in amounts wagered in all 4 divisions, including an encouraging improvement in Online, with UK Sportsbook wagering up 10% and UK Gaming net revenue 8% higher. Sporting results have been favourable for William Hill in the UK, but have been behind in Australia and the USA.

In my view, its strategy is good and it could help the business to grow its market share in the UK. I feel this could help it to increase dividends per share, although I’m cautious about how quickly this will happen given the uncertain prospects for the UK economy.

William Hill’s dividend yield is in line with those of other dividend shares such as Vodafone Group plc (LON:VOD) (LSE:VOD.L), BAE Systems plc (LON:BA) (LSE:BA.L), GlaxoSmithKline plc (LON:GSK) (LSE:GSK.L) and Unilever plc (LON:ULVR) (LSE:ULVR.L). GlaxoSmithKline has a dividend yield of 4.9%, Vodafone’s shares yield 5.7%, Unilever has a dividend yield of 3.2% and BAE’s shares yield 3.5%.

In my view, William Hill’s dividends could rise as its strategy begins to have an impact on its profitability. I think its shares therefore have some investment appeal, but I prefer the stability offered by dividend shares such as Vodafone, GlaxoSmithKline and Unilever. I’m also more optimistic about BAE than William Hill, since I think defence shares could be a good place to invest. However, in the long run I think William Hill does have some appeal as a dividend share.




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