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I’ve purchased just a few high-risk, high-maintenance UK shares this 12 months, and now I’d prefer to steadiness them with a brace of stable FTSE 100 dividend shares. The kind that gained’t price me an excessive amount of time or hassle. Good and simple no-brainer buys.
I’m not searching for ultra-high yields, however a stable and sustainable charge of earnings that ought to rise over time. A little bit of share price development development wouldn’t go amiss. I’m hoping to rustle up £2,000 to spend money on January. If I do, I’ll contemplate splitting it between these two.
Accounting software program specialist Sage Group (LSE: SGE) suits the invoice properly. I’d at all times seen it as a development inventory, however knowledge from AJ Bell reveals it’s an unsung dividend hero too.
Sage Group has a really clever dividend coverage
During the last decade, the board has elevated the dividend at a powerful charge 5.7% a 12 months, in keeping with AJ Bell. Let’s see what the chart says.
Chart by TradingView
Its dividend potential is simple to miss, given a trailing yield of simply 1.56%. That’s been eroded by its spectacular share price efficiency. Sage shares are up 9.97% over 12 months, and 78.57% over 5 years.
Some feared the group’s enterprise mannequin could be clobbered by the synthetic intelligence revolution, however as we be taught extra about what AI can and (crucially) can’t do, it appears extra prone to be boosted by it.
On 20 November, Sage reported an 11% rise in annualised recurring income to £2.34bn, whereas underlying working revenue surged 21% to £529m. Subscription renewal charges are an enviable 101%.
My massive concern is that the Sage share price is dear, with a price-to-earnings ratio of 34.47. That’s greater than double the FTSE 100 common of 15.8%. Progress solely has to disappoint barely for the shares to unload.
That’s a priority given the turbulent international economic system, with small to medium-size companies – Sage’s clients in different phrases – on the entrance line. So it’s not a 100% no-brainer but it surely’s jolly shut.
DCC is a dividend tremendous hero
Gross sales and advertising and marketing agency DCC (LSE: DCC) presents power, healthcare and expertise options. The trailing dividend yield is 3.6% however its historical past is much more spectacular. It’s elevated shareholder payouts at a mean 10.8% a 12 months for the previous decade.
This can be a true Dividend Aristocrat, having hiked shareholder payouts yearly for 3 a long time. But the shares have fallen 2.34% during the last 12 months. It’s cheaper than Sage, with a modest P/E of simply 11.98 occasions earnings.
DCC has been divesting recently, because it appears to simplify its operations and deal with the power sector.
It hopes to conclude the sale of DCC Healthcare subsequent 12 months, and can evaluation its choices for DCC Know-how thereafter.
The group raised £150m after divested its majority stake in liquid gasoline enterprise Hong Kong & Macau in July. All this could assist unlock embedded worth, and focus consideration on its profitable power sector.
The danger is that having introduced it, it struggles to observe by means of. Even when it does, there’s a hazard that its slender focus will depart it extra uncovered to unstable power costs.
No inventory is a complete no-brainer. However Sage and DCC are as shut as they get and I’ll make investments £1k in every once I get that £2k.