October dividend outlook: Vistry Group, BAE Systems and Centrica

With rising inflation leading to cash losing its value and market volatility increasing, investing in stocks with reliable dividend payments may create a viable stream of passive income. The upcoming weeks will see a host of businesses releasing dividends.

Over the next month, companies like Centrica [CNA.L] , BAE Systems [BA.L] and Vistry Group [VTY.L] will release dividend payments to shareholders, with the latter offering the largest payout. Despite its 2p scrip dividend, Hammerson [HMSO.L] is offering the lowest payment at 0.2p per share.

Global markets have seen trillions wiped off their value this year as inflationary pressures, the Russia-Ukraine conflict and post-Covid economic recovery efforts have combined to squeeze investor confidence.

Despite this, a large majority of companies are continuing to announce dividend plans for both the near term and the years ahead. With capital markets largely in decline over the year, the dividend viewpoint provides a hopeful alternative. Here, we look at four UK firms due to release dividends in October.

Vistry Group

The biggest of the upcoming payouts is from homebuilder Vistry Group. With its ex-dividend date coming up on 6 October, the group has declared an interim dividend of 23p, a 13% jump from its 2021 interim payment of 20p. Along with the largest payout, the stock also offers the largest yield, sitting at a massive 10% as of 3 October’s close.

Despite this, the stock has underperformed this year as its share price has plummeted 46.1% year-to-date. With a bleak economic outlook in the UK, investors have turned their backs on the business as concerns heighten around the housing market. Regardless of the worsening outlook, Vistry posted strong results for the first half of the year, ahead of its expectations, including a £35m share buyback scheme.

BAE Systems

BAE Systems announced a 10.4p dividend per share of 10.4p in its interim results. With an ex-dividend date of 20 November, the payout represents a 5% increase on the interim dividend of 9.9p paid in 2021. Last year, the company paid a final dividend of 25.1p.

In a year where many stocks have suffered, the multinational arms, security and aerospace company has bucked the trend, rising 48.3% year to date, due to heightened defence concerns following the Russia-Ukraine conflict. BAE’s products have been in higher demand as a result, leading to an 8.2% rise in underlying profits for the first half of the year. In the latest update to investors, it also highlighted the 4% growth in sales it expects in 2022. With this strong outlook and continuous demand, it looks possible the company may increase dividends in the months ahead.

Hammerson

6 October marks the ex-dividend date for real estate investment trust Hammerson [HMSO.L]. In its half-year results, the group declared an interim dividend of 0.2p per share, alongside the option of a scrip dividend alternative of 2p per share, subject to shareholder approval. The dividend is the same as the year prior for the same period.

With the Hammerson share price down 44.2% year-to-date, the trust offers a 2.1% dividend yield. Hammerson posted strong results in its half-year update, including a 154% year-on-year increase in adjusted earnings to £51m, as well as a 6% reduction in its net debt to £1.7bn. With £0.5bn in cash, the real estate investment trust is in a healthy position to return value to its shareholders.

Centrica

Centrica’s ex-dividend date is 5 October. The business announced an interim dividend of 1p back in July, which will be the first dividend paid to shareholders since 2019. According to July’s report, in the time that it hasn’t issued any dividends, the company has undertaken a transformation in an attempt to “rebuild shareholder value”. As of 3 October close, the stock offered a 1.39% dividend yield.

Despite only rising a modest 0.8% year-to-date, the Centrica share price has risen by 23.5% across the past 12 months as electricity and gas suppliers have enjoyed a prosperous period due to soaring prices. For the six months ended 30 June, the group saw its adjusted operating profit rise to £857m, an increase of 512% on the £140m registered in the same period in 2021.