3 FTSE dividends lifted this week

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GreggsThe FTSE 100 currently offers a trailing dividend yield of a little over 3.5%, which is quite a decent return in times like these when interest rates are low and the index has no clear direction. Indeed, buying shares now and taking the dividends, while waiting for a potential price recovery, could serve you very well.

And with the half-year reporting season well underway, many companies are actually defying the wider economic gloom and are in fact raising their dividends. Today we take a look at three that have upped their payouts this week:

Greggs
Greggs (LSE: GRG) continued its bumper dividend run on Tuesday as it lifted its interim dividend once again, up 3% this time to 6p per share. The high-street baker has raised its annual payout every year since it joined the stock market in 1984, which is a record unmatched by many.


Current City forecasts suggest a year-end dividend yield of 4%, rising to 4.3% for December 2013, and given the firm's illustrious record, few will doubt those projections. The 492p shares are currently on a forward P/E for 2012 of 12, falling to 11 for next year.

Meggitt
Engineering in the dumps? Don't you believe it! Meggitt (LSE: MGGT) raised its interim dividend by a cool 13% to 3.6p per share on Tuesday as the defence contractor announced its interim results.

Full-year forecasts suggest a modest yield of 3% based on the current price of 400p, but the payout should be very well covered by possible earnings Furthermore, increasing the dividend by such a margin at the half-way stage suggests strong management confidence.

Xstrata
Xstrata (LSE: XTA) added optimism to the mini-recovery being enjoyed by mining companies at the moment when it lifted its interim dividend by 8% on Tuesday to 14 cents per share. Indeed, Rio Tinto followed the trend today, boosting its interim payout by 40% to 46.43p per share.

Current forecasts for Xstrata put the 904p shares on a prospective dividend yield of 3%, rising to 3.5% next year. And although earnings are expected to fall by a third this year, there's a rebound expected next year, to give a lowly 2013 P/E of just 8.

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