The income investing potential of FTSE 100 shares SSE PLC (LON:SSE) (SSE.L), AstraZeneca plc (LON:AZN) (AZN.L), Vodafone Group plc (LON:VOD) (VOD.L) and easyJet plc (LON:EZJ) (EZJ.L) is the focus of this article. Could they deliver impressive dividend returns in the long run?
SSE’s 5- year dividend growth plan and its 7%+ dividend yield continue to be relatively attractive in my view. The company has a good track record of increasing dividends per share, and this could prove popular given the uncertain outlook for the FTSE 100.
SSE, though, may not offer the level of defensive appeal that many investors had previously expected. Its recent profit warning and uncertainty regarding its future strategy may hold back its share price performance in the short run to some degree in my opinion.
AstraZeneca may have a dividend yield that is lower than that of the FTSE 100, at around 3.7% versus 4.5% for the index. However, it is expected to increase dividends per share in the current year as a result of rising profitability.
Further profit and dividend growth could be ahead over the medium term in my view. AstraZeneca appears to have the financial resources to continue to invest in its pipeline, while its defensive characteristics may offer appeal should the FTSE 100 experience a volatile period.
Vodafone’s 7%+ dividend yield continues to be one of the highest income returns available in the FTSE 100. Investors, though, seem to be unsure as to how affordable it might be, given the company’s investment in areas such as 5G and acquisitions.
In my view, Vodafone has a bright long-term future, but may continue to be volatile in the short run. I think that its partnership agreements and valuation suggest that it could outperform the wider index in future years.
easyJet’s strategy seems to be sound in my view. It has been able to gain new passengers in recent quarters, and this could help it to remain competitive in what is an uncertain period for the wider airline sector.
Although easyJet has a dividend yield of 6.1%, it remains a potentially volatile share in my eyes. I believe it has long-term total return potential as a result of it having a PEG ratio of around 0.8, but risks facing the wider airline sector such as weak consumer confidence could weigh on its performance in the short run.