BHP Billiton dividend in danger
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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

“BHP Billiton (LSE:BHP) is currently forecast to be the FTSE 100’s highest yielding stock in 2016 with a huge yield of more than 11% according to analyst consensus.  Although today’s write downs are non-cash and hence don’t directly affect the dividend payment, it clearly shows the commodities crunch is having an effect.  With dividend cover currently at just 0.4 times earnings, the lowest of the forecast top 10 yielders in the FTSE 100 (see table), a cut to the forecast 2016 pay out looks a strong possibility” says Russ Mould, AJ Bell Investment Director.

FTSE 100 top 10 forecast dividend yields:

  Dividend yield, 2016E Dividend cover 
BHP Billiton 11.40% 0.4 x
Royal Dutch Shell 8.50% 1.0 x
Rio Tinto 8.40% 1.0 x
Aberdeen Asset Mgt 8.00% 1.2 x
Pearson 7.90% 1.2 x
BP 7.70% 0.9 x
HSBC 6.50% 1.5 x
Old Mutual 6.30% 2.1 x
SSE 6.10% 1.3 x
GlaxoSmithKline 6.00% 1.0 x

Source: Digital Look, analyst consensus estimates, AJ Bell Research. As of 14 January 2016.

These articles are for information purposes only and are not a personal recommendation or advice.

The daily market update is written by Russ Mould, AJ Bell’s Investment Director and his team. The article highlights the movement in the main index, winners and losers on the day and any macro-economic announcements.

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