Do BT Group plc, Vodafone Group plc and SSE PLC have stunning dividend potential?

Could BT Group plc (LON:BT.A) (BT.A.L), Vodafone Group plc (LON:VOD) (VOD.L) and SSE PLC (LON:SSE) (SSE.L) deliver strong income prospects?


Dividend shares are continually on my radar with inflation moving higher, which is why I’m focusing on the investment potential of BT Group plc (LON:BT.A) (BT.A.L), Vodafone Group plc (LON:VOD) (VOD.L) and SSE PLC (LON:SSE) (SSE.L).

BT has a 6%+ dividend yield at the moment, although its future appears to be relatively uncertain in my view. It is making major changes to its business model at a time when it is experiencing difficulties in its Italian division as well as an increasingly competitive quad play sector.

While those changes have contributed to uncertainty among investors, I believe the stock continues to offer good value for money. BT has a single digit PE and this suggests it offers good value for money. With cost cuts seemingly on the way, I think it has a bright future as a dividend stock.

Vodafone also has a dividend yield of around 6% at the moment. The company has focused on investing in its network over recent years, and this has contributed to an improved EPS growth outlook.

Over the next two years, Vodafone is forecast to deliver double digit EPS growth. This could make its dividend more sustainable and lead to above-inflation rises in shareholder payments. And with the stock being regionally diversified, I’m upbeat about the company’s long term total return potential.

SSE’s dividend yield is higher than those of BT and Vodafone. In fact, SSE’s dividend yield of over 7% is one of the highest I can find anywhere at the moment.

Part of the reason for this is the unpopularity of utility stocks. Regulatory concerns have meant that investors have reduced demand, while cyclical stocks have become more popular. However, with SSE forecast to increase its dividends by the same pace as inflation over the next few years, I think it has dividend appeal. As well as this, the stock seems to have a solid growth strategy also.

About Robert Stephens 3630 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email or use one of the other contact methods available on the 'Contact Us' page