Which is the best income play: Severn Trent plc (3.54%), Old Mutual Group plc (4.97%) or SSE plc (5.91%)?

Updated
Pound coins
Pound coins

The FTSE 100 is crammed with top dividend stocks making it easy to overlook some gushing income streams. Here are three solid yielders you can't afford to ignore.

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Severn-th heaven

Water utility Severn Trent(LSE: SVT) may not offer the juiciest yield on the FTSE 100, although 3.54% is respectable enough. But what it lacks in income it has delivered in growth: its share price is up a thirst-quenching 52% over the past five years, against just 3% growth for the FTSE 100 as a whole. That's quite a spurt for a stock that's primarily seen as a safe haven. Lucky number Severn.

Severn Trent has also justified its safe haven status: its performance chart shows a steady upward arc since the financial crisis. Full-year results, published yesterday, show the Midlands water and sewage provider making a "promising start" to its new regulatory period, with a 4% rise in underlying profit before tax to £314m, helped by cost savings and efficiencies. Disappointingly, it rebased its dividend by 5% this financial year and now only promises growth of RPI or above. With RPI currently at 1.3%, the dividends will flow, just don't expect a torrent.

Mutual admiration

Insurer Old Mutual Group(LSE: OML) has battled against tough headwinds lately. Like every life company, it's been exposed to global stock market volatility, but this has been aggravated by its focus on emerging markets, which have been particularly troubled. The share price is down 25% over the last year, slightly worse than other FTSE 100-listed insurers. Some might see this as a buying opportunity, with the valuation knocked down to just 9.18 times earnings and the yield a lively 4.97%.

Be prepared to hang on for the long term. Old Mutual recently announced plans to separate its four constituent businesses, but this is no panacea as earlier this month subsidiary OM Asset Management reported a 14.2% year-on-year drop in net income to $32m, as market volatility took its toll. Still, the overhaul will give Old Mutual a fresh face and make raising funds and capital markets easier. This should be a good stock to hold when markets recover. Until then, you have that near-5% yield.

The Scottish play

Management has positioned power giant SSE(LSE: SSE) as an electric long-term income play offering yields that typically nudge 6%. Today you get 5.82%. Share price performance has been patchy, with the stock down 7.61% in the last 12 months, although long-term buy-and-holders will be up 15% over five years. The lingering concern is that the dividend is at risk as cover gets stretched. Cover is currently 1.3, thin but not yet threadbare.

SSE recently posted a drop in full-year profits for the year to 31 March but lifted its dividend 1.1% to 89.4p per share. Low commodity prices and tougher competition from smaller utility suppliers are hurting, as more customers abandon the hated Big Six for smaller rivals. SSE shed 370,000 customers last year, although it clung onto 8.21m. Share price growth prospects may be less than sparky, but the dividend should continue to sizzle.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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