11 FTSE 100 shares that will trade ex-dividend in September

Because the FTSE earnings season winds down, shareholders can now look ahead to receiving the dividends that corporations have declared. Comfortable days.

As these payouts have been introduced, every got here with a crucial date: the ‘ex-dividend’ date. The time period actually means ‘with out dividend’. It marks the purpose (normally a Thursday) when the inventory begins buying and selling with out the worth of the following dividend included in its worth.

As such, it’s typical for a inventory’s worth to fall by roughly the quantity of the dividend on the day. So, when a inventory goes ex-dividend, the client of the inventory won’t obtain the upcoming fee. The dividend goes to the vendor of the inventory.

That is commonplace apply and nothing to fret about. Certainly, for shares with low yields, this lower could be so minimal that it’s barely noticeable.

FTSE 100 shares going ex-dividend

A complete of 11 Footsie shares go ex-dividend in September. They’re:

These are interim dividends besides these from packaging agency DS Smith and British American Tobacco.

Whereas future dividends can by no means be assured, these specific ones have been permitted and are scheduled to be paid.

Mouthwatering yield

Not like the everyday twice-yearly dividend schedule, British American Tobacco pays out each quarter, which makes it uncommon within the FTSE 100. The dividend to be dished out on 1 November will probably be 58.8p per share.

On the present share worth of two,777p, the dividend yield stands at a whopping 8.4%. Even higher, analysts anticipate the payout to climb subsequent yr, leading to a ahead yield of 9%.

The tobacco big has a multi-decade observe document of elevating the dividend for shareholders.

Excessive-yield passive revenue

Nevertheless, it needs to be stated that the yield is so excessive for a cause. Buyers are taking up a myriad of dangers, from stricter tobacco rules to declining cigarette gross sales in some developed nations.

In rising markets, the place smoking charges are nonetheless comparatively excessive, competitors is fierce and revenue margins might be decrease. In the meantime, its flagship vaping model Vuse is going through stress from illicit alternate options.

Regardless of these challenges, the corporate continues to generate important money flows. Within the six months to the tip of June, it generated about £3bn in free money stream, which was sufficient to cowl the massive dividends.

Adjusted diluted earnings per share got here in at 169p, beating analyst expectations for 166p.

British American Tobacco owns Fortunate Strike, which is rising quantity whereas sustaining its place because the quickest rising cigarette model within the US (an in any other case declining market).

To diversify away from cigarettes, the corporate continues to construct its non-smoking division. Income there grew 7.4% to £1.7bn in H1. Each Vuse and Velo (its nicotine pouch model) are worthwhile, whereas smokeless manufacturers now account for 17.9% of group income.

The inventory is ultra-cheap, buying and selling at simply 7.6 occasions forecast earnings. That’s decrease than each the FTSE 100 common and US tobacco rivals.

Subsequently, it’s good to see the corporate shopping for again shares. It would repurchase £700m value in 2024 then £900m in 2025.

If that dividend forecast proves correct, it means traders may anticipate simply over £1,000 in passive revenue annually from a £11,500 funding. Good.

I’d purchase the inventory immediately for high-yield dividends if I didn’t already personal it.